Rabobank

Coöperatieve Rabobank U.A.
Quick Facts
Type	Cooperative
sector	Financial services
Headquarters (Benelux Organization)	Utrecht, Netherlands
Year of Origin	1895
Emissions (All Scopes)	Estimated 26 Megatons of CO2 (2020)
NCI assessment	Low
Total Revenue	12.169 Billion EUR (2021)
Stock Exchange	Bijv. Tokio, Amsterdam
Key People	Wiebe Draijer (Chairman of the Board) Bas Brouwers (CFO)
Number of Employee	XXX
Subsidiaries

Coöperatieve Rabobank U.A, stylized as Rabobank, is a Dutch multinational banking and financial service company leading in food and agriculture financing. It also is a big investor in mortgages and real estate in the Netherlands. It started as as a cooperation of small credit banks for farmers. After the Coöperatieve Centrale Raiffeisen-Bank and the Coöperatieve Centrale Boerenleenbank merged in 1972 it became the Coöperatieve Centrale Raiffeissen-Boerenleenbank B.A., or Rabobank. In 2016 local branches of the Rabobank and Rabobank Nederland fused under the name Coöperatieve Rabobank U.A.. It has 520 locations in the Netherlands and about 8.8 million customers in the Netherlands plus 0.7 million worldwide. The bank is active in 39 countries and has various subsidiaries.

Company Structure

Rabobank is a cooperative bank, which means they don’t have shareholders but members. Currently it consists of six governing bodies. The General Members Council consists of member representatives (the chairs of the local Supervisory Boards) and is considered as the highest governing body. It approves decisions made by the Board of Directors and Commissioners.

Board of Directors

Board of Directors

Name	Function	Remuneration x1000 EUR
Wiebe Draijer (chair	CEO, Chairman of the Managing Board	1218
Bas Brouwers	CFO, Member of the Managing Board	1099
Els de Groot	Member of the Managing Board	953
Kirsten Konst	Member of the Managing Board	995
Bart Leurs	Member of the Managing Board	954
Mariëlle Lichtenberg	Member of the Managing Board	939
Berry Marttin	Member of the Managing Board	1119
Janine Vos	Member of the Managing Board	868

Supervisory Board

Commissioners

Name	Function	Remuneration x1000 EUR
Marjan Trompetter	Chair	162
Jan Nooitgedagt	Vice Chair	113
Gert-Jan van den Akker	Member Supervisory Board	64
Petri Hofsté	Member Supervisory Board	110
Pascal Visée	Member Supervisory Board	96
Annet Aris	Member Supervisory Board	90
Mark Pensaert	Member Supervisory Board	96
Arian Kamp	Member Supervisory Board	110
Johan van Hall	Member Supervisory Board	6

Accountant

The external accountant of Rabobank is PricewaterhouseCoopers Accountants N.V. (PwC). The independent auditor report of PwC that is attached to the Annual Report of 2021, mentions climate change and climate-related risks as part of another key audit matter, namely on impairment allowances on loans and advances to customers. They write: "These risks [resulting from climate change] impact the financial statements mostly as one of the potential drivers of credit risk exposures of the Group."

Main Activities

Rabobank is a financial cooperative bank and focuses on services such as payment services, savings, insurance and loans. The bank is active in various sectors such as retail banking, wholesale banking, rural banking, vendor finance, leasing and property development. The bank's biggest portfolio's are Dutch private mortgages (188.8 billion euros in 2021) and private lending to the food and agriculture sector (40.3 billion euros in the Netherlands and 65.2 worldwide in 2021). By 2021 Rabobank had 8.9 million Dutch and 0.7 international customers..

Government

Rabobank does not have a royal status in the Netherlands and has not received NOW support from the Dutch government.

Paris Agreement until Today

Since the Paris agreement Rabobank has endorsed various national and international climate ambitions and signed various sector-wide agreements where in which emission reduction targets have been set.

In 2019 Rabobank signed the Climate Commitment of the financial sector. The 54 signatories committed to make a substantial contribution to the implementation of the Paris Agreement and the Dutch Climate Agreement. Concretely: they will measure the CO2 content of their relevant loans and investments and report on this from 2020 onwards and they will publish action plans by 2022 at the latest, including reduction targets for 2030 for all their relevant loans and investments. This commitment is without obligation. There are no requirements set for the action plans to be published in 2022. Only 19% of signatories had an action plan in line with the Paris Climate Agreement by 20202. In addition, the commitment does not specify the relevant financing and/or investments on which the institutions must report. In 2020, only 9 out of 54 financial institutions report on all relevant asset classes. The pace of implementation of this commitment is slow. Financial institutions such as ABN AMRO, Aegon, ING and Rabobank already committed themselves to the Spitsbergen ambition in 2018, in which they promised to combat climate change. In 2020, almost half of the institutions did not yet have a climate plan.

Rabobank has also endorsed the report Klimaatverantwoorde Zuivelsector (Climateresponsible Dairy Sector) from the Sustainable Dairy Chain (Duurzame Zuivelketen or DZK) in which the Dutch Dairy sector lays out its climate commitments.

Financial results since 2015

Rabobank does not pay out dividents since it is a cooperative bank without shareholders. Instead, Rabobank pays out Rabobank Certificates to members who hold them. Rabobank certificates are investment products and are transferable via Euronext Amsterdam.

Financial situation

Year	Revenue	Profit	Rabobank Certificates
2015	13.014 Billion EUR	2.214 Billion EUR	XXX EUR
2016	12.805 Billion EUR	2.024 Billion EUR	XXX EUR
2017	12.001 Billion EUR	2.674 Billion EUR	XXX EUR
2018	12.020 Billion EUR	3.004 Billion EUR	XXX EUR
2019	11.915 Billion EUR	2.203 Billion EUR	XXX EUR
2020	10.782 Billion EUR	1.096 Billion EUR	0 EUR *
2021	12.169 Billion EUR	3.692 Billion EUR	509 Million EUR

• Following the recommendation of the European Central Bank (ECB) in december 2020 to banks not to not pay out any dividends untill at least September 30, 2021, Rabobank has chosen not to pay out Rabobank Certificates for this year.

Current Emissions

Only since 2021 has Rabobank started to extensively report on their scope 3 emissions. In their 2021 impact report the bank reported on 85% of their scope 3 emissions from 2020, which added up to 46.4 megatonnes of CO2-eq. Of this total, 3.4Mt CO2 comes from their international leasing portfolio which covers leasing contracts to tractors both in the Netherlands and internationally. Only 23% of their leasing portfolio is covered in this figure. 7.7Mt comes from corporate wholesale clients and 18.6 from rural clients, covering 75% of their wholesale and rural portfolio. 2.1Mt comes from loans to private individuals, covering 99% of their private loans portfolio. Furthermore in their portfolio of Dutch business clients, which is covered for 95%, 11.2Mt comes from food and agriculture, 3.1Mt from trade, industry and services and 0.3Mt from commercial real estate. This figure excludes Dutch wholesale clients as they are included in the calculation for their international wholesale portfolio.

Rabobank calculates their scope 3 emissions according to the PCAF method and, with the exception of leasing (which only incorporates scope 1), only incorporates the scope 1 and 2 emissions of their clients.

Total emissions in 2021 ( in megatonnes CO2-eq.)

Scope 1	Scope 2	Scope 3	Total
0.019	0.036	46.4 (85% of financed emissions covered)	46.47 (incomplete)

Climate Policy and Plans

In their 2020 rapport on climate change Rabobank claims to commit to the goals of the Paris agreement and that it will adjust their policies to help keep global warming under 2 degrees Celsius. It has so far not set any goals for the emissions in their complete value chain.

By 2023 Rabobank aims to reduce the emissions of their own operations by 20% per FTE compared to 2018, which is 40% in absolute terms. It claims to have been climate neutral with regard to their own operations since 2007, partially by compensation emissions though purchasing Gold Standard certified CO2 credits. Their own operations only account for a small portion of their total emissions.

An important portfolio for the Rabobank is food and agribusiness. Rabobank supports the goal set by the Dutch Climate Agreement of cutting emissions with 6Mton by 2030. It has not set any specific emission targets for their own food and agribusiness portfolio. At the moment the bank is involved in setting up Banking for Impact on Climate in Agriculture (B4ICA). This group of banks, scientists and relevant experts is set up to develop a strategy to address data gaps with regard to assessing climate impact in agribusiness. Specifically it will help estimate the carbon footprint of individual farmers and agriculture subsectors and set targets for various climate scenarios.

With regard to their SME (small and medium-sized enterprises) portofolio Rabobank has not set any specific emission reduction targets.

Rabobank reports that soon all of their investment products will consist of sustainable funds and aims their funds to have 50% lower CO2 intensity compared with worldwide indices worldwide. In the energy portofolio of Rabobank the biggest share of their investments is in Renewables, with around 80%, and it aims to drive that up to about 90% in 2024. The bank has not committed itself to fully divest from carbon intensive energy.

In 2021 Rabobank published a 'road to Paris' in their 2021 impact report. An important target they set here is a 55% reduction of their emissions by 2030 in the EU and the Netherlands. . This commitment, however, does not cover their entire operations worldwide.

Concerning their ambitions in the dairy sector Rabobank refers to the Dutch Climate Agreement from 2019 and the ambitions of Klimaatverantwoorde Zuivelsector (a 2018 report stating the climate ambitions of the Dutch diary sector). Following these ambitions, the Dutch dairy sector commits to a 0.8Mt CO2-eq methane reduction by 2030 . Rabobank also refers to the Sustainable Dairy Chain (Duurzame Zuivelketen or DZK) ambition of a 0.2Mt CO2-eq reduction for soil and crops and a 0.6Mt CO2-eq reduction in energy.

With regard to their mortgage portfolio Rabobank states it probably will not satisfy their ambition to have an average energylabel B by 2024 and A by 2030 and that new targets will be set in the future. Additionally Rabobank raised their 2022 target percentage of customers financing sustainability measures in their mortage application to 30%.

Rabobank aims to expand their sustainable energy portfolio with 20-30% the coming two years. As Rabobank sees gas as an important transition fuel it will increase their share of natural gas to about 25% of their TCF energy portfolio.

Due Diligence

Due Diligence

Keep the broader context in mind. Is the company integer when it comes to deforestation, palm oil, biodiversity, human rights etc etc? Be critical in the sources used here.

Scandals and controversies

Rabobank's office in Utrecht, the Netherlands

In 2014 Rabobank provided loans to Bumitama Agri Group (BAP) who knowingly destroyed forests home to endangered orang utans. For its operations BAP also partially used prohibited peatlands and its plantations did not have proper permits.

In 2015 it was reported that Rabobank was involved in, and profiting from, a corrupt landrobbing scheme in Romania. Corrupt officials in rural Romania were able to sell illegally confiscated land to the Rabobank (Rabo Farm) by falsifying documents in which farmers seemed to approve to sell their land. Rabobank stated it did not know about these illegal practices and referred to their own due-dilligence policy.

In 2017 Rabobank, as well as ING, financed the import of granite from quarries that use child labor. In a response Rabobank states that its clients comply with international labour legislation and if not they will discuss this with their clients, possibly leading them to stop their cooperation.

In 2018 Rabobank NA (a Californian subsidiary of Rabobank Groep) was charged for money laundering practices and had to forfeit $368,701,259 as a result of allowing illicit funds to be processed through the bank without adequate Bank Secrecy Act (BSA) or AML review.

In 2021 Global Witness reported Rabobank, since 2016, might have earned 72.6 million through deals with clients that are linked to deforestation practices. The biggest corporation Rabobank invested in is Sinar Mas Group, who owns Asian Pulp and Paper (APP), a company accused of “destroying Indonesian rainforest and contributing to disastrous peatland fires.” According to Global Witness Rabobank has provided Sinar Mas with 376 million dollar in loans and credit since 2016. From these deals they could have earned about 43.8 million dollars in deforestation-adjusted earnings from these deals”. Another important client in this case is the Salim Group, a conglomerate of companies owned by Anthoni Salim, the fourth richest man in Indonesia

Rabobank, as the biggest investor in the Dutch agricultural industry, is also the largest investor in nitrogen emitting agricultural activities in the Netherlands. In 2019 the Dutch Raad van State ruled that the PAS programme (a programme rolled out by the government to distribute the amount of nitrogen that could be emitted by companies and farmers) was insufficient to use when allocating permissions to emit nitrogen. As a direct result a large number of projects (mainly in construction) that had obtained permission to emit nitrogen via the PAS programma had to be halted. A so called ‘nitrogencrisis’ broke out and ever since the government is searching for ways to drastically reduce the emission of nitrogen in various sectors. Rabobank, as a leading investor in agriculture, naturally plays an important role here.

Conclusion

Rabobank has set no specific ambitions to bring the carbon emissions in their complete value chain down and eventually to zero. The bank primarily refers to Dutch and international reports in which various sectors set sector wide targets for CO2-eq reductions. But Rabobank has yet to translate this in hard emission reduction targets for themselves on both the short term, specifically 2030, and on the long term, namely 2050. Rabobank does not yet report on all the emissions in their value chain, missing 15% of their 2020 scope 3 emissions, and only reports extensively on their scope 3 emissions since 2021. This makes it difficult to assess their reduction in emissions compared to previous years.