ESG materiality at the heart of ABN AMRO’s business strategy

Dutch bank ABN AMRO, recognized that evolving ESG risks and opportunities required greater integration into their business model and corporate strategy.
Datamaran’s technology provided the data to inform which ESG materiality issues were a strategic priority and where there was the potential for the greatest impact from both opportunities and threats.
ABN AMRO focused on these priorities and generated value through their materiality assessment. This was so successful that the organization responsible for new EU sustainability laws featured this approach and the Datamaran platform as best practice.

“With its data-driven approach, Datamaran has madethe process more comprehensive. It ensured that bothestablished and emerging issues are weighted in ourinitial analysis. From day one, Datamaran has helped usto get a better sense of what is going on, what shouldbe on our long list without the hassle.”

ESG data cuts through the noise

 As a leading Dutch bank, with the publicly stated purpose of “banking for better, for generations to come” and the overarching goal of accelerating the sustainability shift, ABN AMRO has ESG at the center of its strategy and business model.
To support its strategy ABN AMRO needed to establish a robust, dynamic, and data-driven materiality process within the complex and ever-growing matrix of ESG issues.
Tjeerd Krumpelman, Global Head of Advisory, Reporting and Engagement at ABN AMRO, and Catalina Hemmink, Sustainability Specialist at ABN AMRO, were looking for clarity on ESG issues believing that “a data-driven process not only improves the outcomes, it also improves the credibility of the process to get to those outcomes.”
With the rapidly evolving ESG landscape, keeping abreast of the ESG priorities of regulators, policymakers, investors, peer companies, broader industry issues, and legislation was a growing challenge for ABN AMRO. Manually tracking these huge matrices of information was an impossible task, so using technology was the only viable solution.
To use all available ESG information, ABN AMRO works with Datamaran to provide the foundations for its data-driven approach to ESG, materiality, and risk monitoring. Datamaran uses AI to identify and monitor external risks

Using tech to tackle ESG materiality

ABN AMRO used Datamaran’s dynamic materiality capabilities, based on patented AI, to determine a long list of topics based on external and internal analysis.

To determine the completeness of that list a comparison was made with:

  • Topics that peers are reporting
  • Regulators’ focus points
  • Policymakers σ Media trends
  • Without this automated, data-driven analyses that would be difficult and costly to deliver manually.

The list of issues was distilled into a shortlist by ranking issues according to their prominence in various sources before consulting stakeholders (customers, society, employees, and investors) through surveys; this process is typically conducted annually.

Catalina Hemmink said: “As value creation is part of our strategy, it’s very important for us to determine our material topics. Since we apply the broader Integrated Reporting Framework to determine our material topics, we’ve decided to call them value-creating topics. The first step is really to identify the most value-creating topics. We then use it as a management tool and track the progress on the topics and drive that back into the organization.”

ESG materiality as a continuous process

Datamaran’s dynamic materiality capabilities help organizations review the evolution of their material issues and identify emerging issues quarterly. This has a huge impact on ABN AMRO, using Datamaran to run ESG materiality as a continuous process changes it to a value-driving strategic decision-making tool rather than a costly reporting exercise.

ESG and corporate strategy

ABN AMRO uses Datamaran to deliver robust materiality outcomes, according to Tjeerd Krumpelman, the starting point for turning materiality into a value-creating tool is aligning materiality and ESG risks from a risk perspective and applying materiality to their business model.

Tjeerd Krumpelman said: “Looking at the specifics of our bank, you can use your value-creating topics to align it with your business model and to see where you create the most impact. It’s good to be aware that these impacts can be either positive or negative, and have a plan to minimize negative impacts as much as you can, while at the same time improving your positive impacts. That’s how we believe materiality can truly feed into value creation, value creation can lead to decision making, and that can lead to making the right decisions and creating a true impact.”

ESG topics are now regularly discussed in board rooms, and with the robust materiality process behind the value-creating concept, ABN AMRO can collate more information to inform communications to the board and enhance strategy discussions.

At the board level, ABN AMRO’s discussion around ESG topics is being led by hard data – including the results of stakeholder research – which results in a conversation around impact value creation and business models.

ESG materiality best practice

The report, Towards Sustainable Businesses: Good Practices in Business Model, Risks and Opportunities Reporting in the EU, cites ABN AMRO as an example of best practice in ESG management and reporting, as an example of best practice. It also highlights the importance of technology solutions in defining links between financial and ESG information, recognizing Datamaran’s approach as best practice.

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Datamaran is the only software in the world that provides a fully automated solution for identifying and monitoring material ESG risks and opportunities. It provides leaders with a clear understanding of the ESG risk landscape, enabling them to create data-driven strategies in-house with confidence.
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