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And what this means for you in practice
Much has changed recently in the financial world in terms of sustainability, including in investing. This is because many new regulations have been introduced that require companies to be more transparent. When providing investment services, ABN AMRO also complies with a number of new rules on sustainability. On this page, we explain what these new sustainability rules mean in practice for you as an investor.
Before you start investing
Will you be investing at ABN AMRO? You may choose to take sustainability into account in your investments. When you start investing with investment advice or asset management, we determine your investor profile with you before you start investing. We will ask you a number of questions for this purpose concerning:
- your financial situation, your investment objective and your attitude to risk;
- your knowledge of and experience with investment products; and
- your sustainability preferences.
These questions determine your risk profile and your sustainability profile. Together with your knowledge and experience, this forms your investor profile. We will then work with you to see which form of advice or asset management mandate suits your investor profile. You will find detailed explanations of the entire investor profile here.
On this page, we only explain the sustainability profile and indicate what else you can expect in terms of information if you include sustainability in your investments.
What is a sustainability profile?
At ABN AMRO, we currently have four sustainability profiles:
- Non-sustainable profile: within the non-sustainable profile we only apply the exclusions that generally apply within ABN AMRO, such as excluding companies with activities in the production of controversial weapons, and applying sanctions within your investments.
- ESG Starters profile: with an ESG starters profile you support companies and governments in the first phase of sustainability. This profile excludes some investments, such as tobacco producers, and companies involved in thermal coal mining (also for energy production). Moreover, within this profile, we only select investments that comply with principles of responsible governance. At least 70% of the investment portfolio (excluding cash/money and derivatives) must meet these criteria. The remaining 30% of the portfolio will not be subject to that criteria so it might be invested in other securities.
- ESG Advanced profile: with an ESG Advanced profile, you invest in companies and governments that are ahead in sustainability. In addition to the criteria mentioned above, this profile excludes more investments, such as investments in gambling companies and cannabis production. At least 90% of the investment portfolio (excluding cash/money and derivatives) must meet these criteria. Up to 10% of investments might not meet these criteria.
- Impact profile: with an Impact profile, you invest in sustainable companies and governments that make a positive contribution to society or the environment. Investments in this profile, in addition to the above, should have a positive contribution to people, the environment and society, while not having a significant negative impact on all other environmental and social aspects. 100% of the investment portfolio (excluding cash/money and derivatives) must comply with this.
You can find more background information on the criteria that apply to the different sustainability profiles here.
To find out what your sustainability preferences are, we will ask you a few questions. These questions can be divided into 3 categories, for example, we ask if you:
- want to take into account the main adverse effects selected by ABN AMRO for sustainability factors; and/or
- want to include sustainable investments; and/or
- want to include EU Taxonomy investments.
More information on what key adverse effects are for sustainability factors, sustainable investments and taxonomy investments can be found under the heading ‘Information on definitions’. Do you not have sustainability preferences? This is of course possible and you can also indicate this in the questionnaire. We do not have to take that into account then.
Sustainability and our investment forms
A sustainability profile follows from your answers about your sustainability preferences. Our products within investment advice and asset management also each have their own sustainability profile. This way, we ensure that our offer matches your preferences.
Sustainability information
In addition to recording sustainability preferences, we will now provide you with more information about sustainability and our products. You will receive information about the sustainability of your investments from us:
- before you start investing. We call this pre-contractual information; and
- during the period you invest.
Before you start investing
You will receive information about product sustainability before you open an investment account with ABN AMRO for investment advice or asset management. You can also find sustainability information on the website of our asset management and investment advice products. This includes the product's sustainability characteristics and risks.
During the period you invest
Are you investing in asset management? If so, we will inform you annually about the sustainability of your investment portfolio. We do this through the (mandatory) annual reports. You can find more information on that at the bottom of this page. In addition, you will receive quarterly sustainability insights for your portfolio as part of your personal asset management report.
Exactly what information you receive depends on whether you invest with investment advice or with asset management. You can read more about this below under 'Sustainability information at product level'.
Information on definitions
ESG investments promote certain environmental or social features. This may include excluding investments, for example in companies involved in controversial activities. ESG investments can also take into account sustainability risks, for instance by selecting investments that perform positively on environmental, social and governance aspects. In addition, the investee company must meet our good governance standard.
A sustainable investment is one that aims to contribute to an environmental or social objective. In addition, the investee company must not harm other environmental or social objectives (“Do not significant harm principle” or “DNSH principle”). Also, the investee company must have responsible governance.
The European Commission has prepared a manual with various criteria to measure whether an economic activity is environmentally sustainable so that everyone has the same understanding and the same definition. This manual is called: EU Taxonomy. If an activity meets the criteria of the EU Taxonomy, this can be characterised as “ecologically sustainable”. The EU Taxonomy explains per sector which economic activities are ecologically sustainable and which are not. Investments that meet these criteria are called "taxonomy investments". ABN AMRO does not currently (reference date 2024) offer taxonomy investments.
Key adverse social effects are ABN AMRO's selected key adverse effects of investment decisions relating to sustainability factors that deal with environmental and social issues such as climate change, working conditions, respect for human rights and combating corruption and bribery.
For an investment to be called sustainable, it must not seriously compromise another environmental or social objective (DNSH principle). For example, consider the situation where a company builds a wind turbine in a protected nature reserve. That the company wants to produce clean energy is sustainable. But the fact that it is damaging the nature reserve with this is not desirable. If this damage is significant, the activity does not comply with the DNSH principle and thus the investment cannot be called sustainable.
For more information and explanations on the basic concepts around sustainability, please refer to this document: Your investment profile in focus.
Sustainability information at product level
The European Sustainable Finance Disclosure Regulation (SFDR) is mainly about transparency: investment providers must provide information on the extent to which they incorporate sustainability into their investment products. Therefore, you will receive a number of information documents from us. These documents give you an insight into the sustainability aspects of our products. Below, we briefly explain what you can expect from each document.
Document Pre-contractual disclosure (asset management)
If you choose asset management, you will receive the mandatory Pre-Contractual Disclosure document from us. This document has a mandatory format, so all providers use the same document. In it, you can read more details about the sustainability features of the mandate.
The Pre-Contract Disclosure gives you insight into the mandate's sustainability ambitions and how we measure the achievement of these ambitions. You will also find in this document an overview of how we deal with key adverse sustainability impacts, responsible governance practices and international standards.
You can also find the pre-contract disclosures on the mandate product page. To do so, see the links at the bottom of this page.
Document Sustainability Information (asset management)
The “Sustainability Information” document can be found on the website of our asset management mandates. In it, we give you more information on how we try to realise the ambitions from the product's sustainability ambitions.
The Sustainability Information document elaborates on how we measure the mandate's sustainability ambitions. We also elaborate on what data we use for this purpose, what types of engagement we apply and how we determine which investments are suitable for the mandate.
You can find the Sustainability Information document on the mandate page. To do so, see the links at the bottom of this page.
Transparency Integration Sustainability Risks document (investment advice and asset management)
If you choose investment advice or asset management, you will receive the Transparency Integration Sustainability Risks document from us. Sustainability risks are environmental, social or governance (“ESG”) events or conditions that may affect the value of the investment.
In this document, we explain more about sustainability risks and how they affect the product. We also explain how we factor sustainability risks into our investment policy and how we try to manage these risks.
You can find the Transparency Integration Sustainability Risk document on the mandate page. To do so, see the links at the bottom of this page.
Annual reporting (asset management)
If you opt for asset management, you will receive an annual report from us showing you how sustainably investments have been made over the past period. This annual report gives you an insight into the realisation of the mandate's sustainability ambitions over the past calendar year. The first periodic report will cover the calendar year 2023.
Company-level sustainability information
In addition to the sustainability information ABN AMRO provides on its products, ABN AMRO also provides more information on sustainability at company level. Based on SFDR, ABN AMRO provides company-level transparency on:
- Integrating sustainability risks into staff remuneration policies.
- Explanation main adverse effects sustainability.
Integrating sustainability risks into staff remuneration policies
Our remuneration policy sets out how we incorporate sustainability risks and how we ensure that remuneration does not lead to investment decisions that are inconsistent with our strategy as regards to integrating sustainability into our investment policy.
We have identified which employee groups may contribute to the level of sustainability risk within investment advice and asset management. For these groups of employees, we have set targets on managing sustainability risks.
We set these targets at the beginning of the year. At the end of each year, we look at the extent to which these targets have been met. Partly on this basis, we set the remuneration of employees.
Explanation main adverse effects sustainability
Finally, we also indicate at company level the extent to which we take into account the main adverse effects related to sustainability. These are the main adverse consequences of our investment decisions, impacting:
- ecological and social themes;
- working conditions;
- human rights; and
- combating corruption and bribery.
In the statement, we also explain how we factor the main adverse effects into our investment policy. And each year on 30 June, you will find in this statement an annual report for the previous year on the actual negative impacts on sustainability factors. This way, you can ultimately see the main adverse effects on the sustainability factors of our investment policy up to 5 years in the past. The first annual report was published on 30 June 2023.
Click on the following link to view our Statement of Main Adverse Effects.
