ABN AMRO Bank N : – 2022 Climate Strategy & Targets

ABN AMRO Bank N.V.

2022 Climate Strategy & Targets

ABN AMRO 2022 Climate strategy & Targets						II
Contents						CEO Foreword
					Introduction
						Our bank-wide
						climate strategy
						Our approach to targets
CEO Foreword	1	Our bank-wide climate strategy	18	Deep dives	43	Deep dives
Executive Summary	4	Our approach	19	Note on Mission 2030	44	Appendix
Overview sectors and targets	5	Our climate strategy at a glance	21	Residential Mortgages	46
		Aligning our portfolio and operations		Commercial Real Estate	50
		with a net zero trajectory	22	Energy	54
Introduction	8	Engaging with clients to support them in their		Shipping	59
Our climate commitment	9	low-carbon transition	25	Client Assets	63
Decarbonising our loan book and client assets portfolio	11	Improving and scaling our offering of solutions
Climate alignment dashboard	15	across capital, expertise and partnerships	28
Dilemmas and dependencies	16	Enhance our climate governance and		Appendix	67
Next steps	17	risk management practices	34	Appendix A Data overview	68
				Appendix B Climate risk heat map exercise	70
		Our approach to targets	38
		Key elements of our approach	39
		Our methodology to set carbon reduction targets	40
		Key decisions made to set carbon reduction targets
		for our financed emissions	41
		Complexities to target setting	42

ABN AMRO 2022 Climate Strategy & Targets

CEO Foreword

Our climate strategy is a plan of action and presents our principles, priorities and key levers

1

CEO Foreword

Executive Summary

Overview sectors and targets

Introduction

Our bank-wide climate strategy

Our approach to targets

Deep dives

Appendix

ABN AMRO 2022 Climate Strategy & Targets

2

In line with our purpose, we strive to achieve a responsible and just transition that is socially inclusive and with respect for human rights

CEO Foreword

Executive Summary

Overview sectors and targets

Introduction

Our bank-wide climate strategy

Climate change is one of the biggest challenges of our time and ABN AMRO is committed to making a difference. Not only by doing what we are good at - providing lending and investment services - but also by leading by example. In this report, we present our climate strategy as we take the next step in our climate journey. Our climate strategy is a plan of action and presents our principles, priorities and key levers, giving insight into how we will steer the climate journey ahead.

In line with our purpose, 'Banking for better, for generations to come', we aim to make a positive impact, working together with our clients to tackle the challenges of our times. Sustainability has been core to our strategy since 2018 and is part of the regular dialogue we have with our clients. We already encourage our mortgage clients to improve the energy efficiency of their homes by financing energy-saving solutions, we offer discounts and support to commercial clients who want to make their business premises more sustainable, and we support our corporate clients by financing their sustainable business models. Our commitment is also demonstrated by how our clients' ESG and impact assets have grown from around EUR 5 billion in 2014 to more than EUR 40 billion at the end of 2021, supported by investments in new products, reporting tools and staff education.

To facilitate and accelerate climate action, we have an inclusive and expertise-based approach. For us, engaging with clients to support their transition is fundamental to truly making a difference. Our sustainability efforts aim to support our clients in decarbonising their business models or assets and footprint in order to structurally reduce carbon emission in the real economy, accelerate circular business practices and create positive social impact. In line with our purpose, we strive to achieve a responsible and just transition that is socially inclusive and with respect for human rights. The transition to net zero is a long-term and collaborative process, during which we expect to encounter several dependencies and dilemmas. The impact for certain areas of society could be profound and we face dilemmas that could impact our ability to prioritise climate in our decision making. By balancing all stakeholder interests, taking into account climate, societal and client considerations, we seek to maximise both our positive societal and climate impact. To ensure we deliver on our ambitions, a strong governance

structure has been established and will be further strengthened, including clear accountabilities, roles and responsibilities.

Our climate strategy, as detailed in this report, is a plan of action designed to achieve our goal of bringing our portfolios into line with limiting global warming to a 1.5°C scenario and supporting the transition to a net zero economy by 2050. We have joined the Net Zero Banking Alliance (NZBA), providing us with a framework for our climate action. We are committed to aligning our portfolios and operations with a net zero trajectory and will seek to improve and scale our offering in terms of expertise, capital and partnerships, our key tools as a bank.

We have set intermediate targets for 2030 for five sectors: oil and gas, power generation, shipping, commercial real estate and residential mortgages, which constitutes the largest asset class in our books. Our strategic choice to focus on the Netherlands and Northwest Europe has already significantly reduced our loan portfolio in the carbon-intensive energy, shipping and commodities portfolios, and the remaining portfolios are much smaller. We have developed a roadmap for how we will expand target setting for other sectors. In addition, we have set ambitions for the investments we make on behalf of clients. In line with our aim of leading by example, we have set a net zero target for our own operations, taking responsibility for our own footprint. We are looking to meet our targets by applying a decarbonisation lens across all our core processes, including how we allocate capital

Our approach to targets

Deep dives

Appendix

ABN AMRO 2022 Climate Strategy & Targets

3

We are committed to supporting the transition to

a net zero economy by 2050 and our climate strategy is an important step in accelerating our journey

CEO Foreword

Executive Summary

Overview sectors and targets

Introduction

Our bank-wide climate strategy

and develop new products and services. Assessing and monitoring our clients, while supporting them in the journey towards more sustainable business models or assets, will also contribute to mitigating climate transition risk. We will update our targets and fine-tune our plans on a regular basis as regulations, technologies and methodologies progress in the coming years.

Global decarbonisation will require enormous investments in innovative climate technologies and infrastructure, such as hydrogen, renewable electricity, carbon capture technology and energy efficiency. Across our portfolio, there will be a need for high levels of financing and we remain an active player in financing decarbonisation on the strength of our leading product capabilities. The energy transition also requires significant early-stage capital.

A total of up to EUR 1 billion in early-stage capital will be committed to accelerate the transition to a decarbonised energy economy.

We know we cannot do this alone and will continue to team up with other stakeholders and other banks, sharing expertise and fostering cross-sector collaboration between our clients and other partners. Our commitment to sustainability in these past years has significantly enhanced our expertise, but to deliver on our climate strategy we need to step up our knowledge and capabilities. We will further broaden our wide range

of in-house learning solutions, supported by partners.

We are committed to supporting the transition to a net zero economy by 2050 and our climate strategy is an important step in accelerating our journey. We look forward to working with you on this major challenge for us all.

Robert Swaak

CEO of ABN AMRO Bank N.V.

Our approach to targets

Deep dives

Appendix