Adrian de Groot Ruiz / True Price

Tjeerd Krumpelman / ABN AMRO

Integrated Profit & Loss: Progress measurement 2014-2016

Reporting 3.0 conference, June 12th 2018

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ABN AMRO’s aim: long-term value creation

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Challenge

How can ABN AMRO create more value?

For ABN AMRO it is important to have a sustainable business model that creates value for all stakeholders

In daily reality, it can be challenging to make this practical and balance business and societal considerations, now and in the future

How can ABN AMRO improve its sustainable business model that creates value for all stakeholders?

ABN AMRO can improve its sustainable business model by measuring, steering and reporting on value creation for all stakeholders

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ABN AMRO & TRUE PRICE

2017

IP&LPilotformortgagesandABNAMRO

total

Progressreport

2014-2016

HumanCapital/Employee

development

2012 2015 20182017

TruePriceofdiamondsIP&LPilot

Cocoatradefinance

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A. Measure value creation for all stakeholders

B. Report on value creation for all stakeholders

C. Steer on value creation for all stakeholders

Measuring, reporting & steering make value creation actionable

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How to measure value creation for all stakeholders?

Qualitative estimate of ABN AMRO’s material impacts as found in an internal expert session

1. Identify the material impacts on all capitals 1)

Benefitsofuseofrenewableenergy

CO2andenergysavingsduetobankpolicies

CO2andenergyuseofownoperationsWateruse

Scarcematerialuse

Wasteproduction

Biodiversitylosses

Landuse

Airpollution

CO2andenergyuseinvaluechains

Indirectsocialbenefits

Reputationandtrustofsector

Facilitationofpaymentsystem

Stressduetopaymentdifficultyatclients

Privacyconcerns

Humancapitalcreationfromtraining

on-the-job-learning

Increasedlifesatisfactionofemployment

HumanrightsviolationinsupplychainHealthandsafety(ABNARMOemployees)

Healthandsafety(valuechain)

Opportunity costoflabor

Paymentstosuppliers(OPEX)

Internalizationopportunities

Taxespaid

Paymentstoemployees

Contribution tobank'sprofit

Internalizationrisks

Paymentfromclients

Changeinphysicalassetsofthebank

Qualityofserviceprovision

Valueoffinancialservicestoconsumers

Intellectualcapitalcreationduetotraining

IncreaseinbrandvalueofABNAMRO

Consumerknowledge

Moreandbetterdata

Cybersecurityconcerns

-0.5 0.5 1.5 2.5 3.5 4.5 5.5

Socialcapital

Humancapital Producedcapital Intellectualcapital

Financialcapital

Increaseincapital

Decreaseincapital

Naturalcapital

1) Six capitals as recommended by the International Integrated Reporting Council; impacts shown combine impacts to different stakeholder groups

A. MEASURE

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Facil itationofpaymentsystem

Consumersurplus

Stressduetopayment difficultyatcl ients

Privacyconcerns

Humancapitalcreationfromtraining

Humancapitalcreationduetoon-the-job-learning

Increasedl ifesatisfactionofemployment

Paymentstoemployees

Healthandsafetyincidents(ABNARMOemployees)

Benefitsofuseofrenewableenergy

CO2andenergysavingsduetobankpolicies

CO2andenergyuseofownoperationsWateruse

Wasteproduction

Scarcematerialuse

Landuse

Biodiversitylosses

Airpollution

CO2andenergyuse(downstream)

Indirectsocialbenefits

Reputationandtrustofsector

Taxespaid

Humanrightsviolationinsupplychain

Healthandsafetyincidents(valuechain)

Internalizationopportunities

(Short-term) investorvalue

Internalizationrisks

Employees Society-at-large(nature)

Investors

Increaseincapital

Decreaseincapital

Clients Society-at-large(other)

How to measure value creation for all stakeholders?

2. Match impacts to stakeholders1)

1) Impacts ‘Consumer surplus’ and ‘(Short-term) investor value aggregate impacts of the previous page into tangible benefits to stakeholder groups. Stakeholder groups in line with ABN AMRO’s segmentation, with society-at-large split into a part for natural capital and a part for all other capitals to stress the special character of natural capital.

A. MEASURE

Qualitative estimate of ABN AMRO’s material impacts

as found in an internal expert session

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IP&L allows reporting on net value creation per stakeholder…

• Increaseinnetprofit

• Increaseinbrandvalue

• Staffreduction

• Slightincreaseemployeeengagement

• Declineinownemissions

• Newgreeninitiatives

Regainingtrust

• Increasevaluemortgages• IncreaseNPS• (Decreaserevenue)• Increasingdigitalization

B. REPORTING

Publish integrated Profit & Loss (by capitals and/or stakeholders) to report on progress

Society at large (nature)

Society at large (other)

2014 2016

Clients Employees Investors

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€

Using this to steer on value creation is the next step

1. Track and set targets on progress

Impact 2016

Target 2020

C. STEERING

Clients Employees Society at large (nature)

Society at large (other)

Investors

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END

Integrated Profit & Loss: Progress measurement 2014-2016