Ethical Performance
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ABN Amro scales up SRI

January 2006

A large European bank is to triple the money it manages along socially responsible lines.The asset management division of Amsterdam-based ABN Amro plans to increase assets under SRI management from €1.5billion ($1.8bn, £1bn) to €4.5bn within the next three years, and wants to increase the amount further.

It will open ‘several new sustainable funds’ over the next two years in Germany, the UK and France, which is Europe’s fastest-growing SRI market. This will mean branching out from its main areas of SRI activity in Brazil, The Netherlands and Sweden, where the bank also plans to establish new sustainable funds. Tonika Hirdman, global head of sustainable investment, told EP: ‘We will learn from our experience in Europe to eventually bring [SRI] to other markets depending on the market situation.’

SRI assets will still account for only a small proportion of the bank’s overall €167bn under management. The expansion will bring them to just below three per cent of the total compared with the less than one per cent at present.

One consequence will be an increase in ABN Amro’s SRI research budget, although the bank will not give details. ABN Amro recently appointed Gemma Taylor-Gee, formerly of the SRI rating agency CoreRatings, to its London SRI team. Last year it brought together a sustainable development team to oversee group-wide CSR strategy and to help its investment arms incorporate sustainability factors into their research.

The bank, which has 98,000 staff in more than 60 countries and made €3.24bn net profits in 2004, says it wants to be part of the expected ‘strong growth in the sustainable investment market’ among retail and institutional investors during the next few years. A Mercer Oliver Wyman study commissioned by the bank forecast that SRI assets under management in Europe will almost double from €93bn in 2004 to €173bn by 2008.

The bank will extend the engagement approach that it uses for existing SRI investments, calling meetings with companies in which it invests ‘to influence their business philosophy and their activities’. It has used engagement widely in Brazil, the Netherlands and Sweden. Banco Fonder, its Swedish subsidiary, has talked to about 100 companies since 2000.

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