Sustainable investing at ABN AMRO

In practice, it turns out to be impossible to rule out child labour. Much child labour takes place in the chain of suppliers, which is difficult to gauge. A good example is the textile chain. In the chain of suppliers, companies are almost never directly involved in child labour, although they are indirectly involved. It is more useful to assess how companies deal with it if it appears that child labour is taking place in their chain. Do they start discussions with the supplier? Are they open about where they get their products made? Do they carry out checks? And does that produce any insight? We take this all into account when assessing the sustainability of a company.

In order to contribute to the development goals of the UN, we would like to invest in emerging countries. These countries often need funding for economic progress, poverty reduction and investment in basic needs. At the same time, people often think of corruption, pollution and poor working conditions in companies in these countries.

Also for listed companies in emerging countries, we look at the ESG score and controversies and select only the best companies. In addition, we have selected a number of funds that invest in unlisted companies in emerging countries and therefore do not have an ESG score. However, the fund managers of these funds ensure that these are companies that have good ESG policies.

We do not believe that all arms manufacturers are sustainable and therefore exclude them from sustainable investment. This of course also includes controversial weapons, such as nuclear weapons. However, should we then also exclude the government bonds of countries that have nuclear weapons themselves, such as France? France is a signatory to the Non-Proliferation Treaty and is a member of NATO. France will therefore only use nuclear weapons in extreme cases and only reactively. At the same time, France is making considerable efforts to achieve climate goals, thereby making a positive contribution to combating climate change. That is why we do not exclude government bonds of France and other countries that have signed the Non-Proliferation Treaty.

The use of GMOs (genetically modified organisms) is subject to national and international regulations. However, not all food manufacturers are transparent about the inclusion of GMOs in foodstuffs. GMOs are also relatively new, which means that a lot of people question their long-term effects and are therefore opposed to the modification of foods. At the same time, the global population, and therefore also the demand for food, is rapidly growing, so the use of GMOs may be needed to meet this demand.

For the safety and quality of medicines and food in particular, it is important that animal testing is done and sometimes it is even required by law. Although these tests meet great resistance in society, they remain necessary for the time being. It goes without saying that this requires careful consideration in our investment choices.

Modern nuclear energy is a relatively ‘clean’ form of energy. The CO2 emissions produced are very low and modern nuclear power plants are much safer than their older counterparts, whilst also producing less nuclear waste. Nuclear energy will form an important part of the energy mix needed to meet the objectives of the Paris Agreement. However, it remains problematic in the public’s eyes, despite the minimal amount of nuclear waste generated by modern plants. Generally speaking, we will not invest in companies whose only activity is the generation of nuclear energy, but may invest in energy companies that provide nuclear energy alongside other forms of energy. Or better yet, we may invest in ‘green bonds’ issued by these companies. Green bonds are bonds for which the yield is specifically used for renewable energy projects, for instance wind turbines and solar panels. Companies in the nuclear energy sector are also considering investing in renewable energy and we aim to encourage this by investing in these bonds.