Achievements in the area of core banking processes.
Client acceptance policy
The 2009 Corporate Social Responsibility Report (available in Dutch only) stated that the external principles that Van Lanschot had signed up to (GC, PRI and ILO) would also be incorporated in the client acceptance policy. Some of the CSR issues had been included in the Know Your Customer (KYC) and Customer Due Diligence (CDD) processes by year-end 2010. This project will continue to be rolled out in 2011.
Investment policy
The implementation of the sustainable investment policy formulated in 2009 continued during 2010. At Van Lanschot, this resulted in a rapid growth in sustainably invested assets:
- Total assets under discretionary management amounted to some € 3.2 billion at year-end 2010. Of these assets, all managed equity investment funds are screened by the GES engagement manager. This concerns 29% of said € 3.2 billion.
- The total amount of assets under advice amounted to approximately € 9.6 billion in 2010. Of these assets, all (actively or otherwise) managed investment funds on which the bank advises, as well as the individual European and US equities, already undergo the GES screening. This concerns about 6% of the total assets under advice.
- If discretionary asset management and advice are combined, about 12% of the total assets falls under the engagement approach.
Also at Kempen, the sustainably invested assets rose considerably; 22% of all assets under management undergoes a GES screening (2009: 17%).
The engagement policy currently applies to 29 investment funds and to all in-house funds managed by Kempen Capital Management (KCM). In 2010, the engagement process was applied to 28 companies spread over 19 investments funds. This resulted in the exclusion of 10 companies.
We are currently looking into how the engagement policy can also be applied in the case of property funds and corporate bond funds in the portfolios. In the case of property investments, we are considering introducing a system of screening and ranking based on the sustainability of the relevant buildings, while the policy to be followed for corporate bonds should be in keeping with the equity policy. Extending the engagement policy to cover new asset classes (property and corporate bonds) and rolling out the sustainable investment policy for advisory activities will lead to strong growth in assets under engagement at Van Lanschot, which will in time account for a significant proportion of total assets under management.
Lending policy
The CSR lending policy was approved at the end of November 2010. First and foremost, under this policy the external GC and ILO principles that Van Lanschot signed up to are applied to the lending process. Since these external principles only cover the issues of human rights, employment rights, environment and tackling corruption, Van Lanschot added a number of other CSR issues to this group, partly as a result of dialogues with stakeholders. These issues were weapons, fur, gaming, pornography, animal testing and nuclear energy. The lending policy with respect to human rights is summarised here: CSR lending policy. The lending policy as a whole can be found on our website (in Dutch only).
The implementation of the CSR lending policy started in early 2011. In-house training sessions were held to inform business bankers and risk managers about the new policy. Following this, all new and existing corporate loans were reviewed on the basis of the aforementioned CSR issues, using a CSR loan filter. If a borrower does not comply fully with the requirements laid down in the CSR lending policy, Van Lanschot will attempt to bring about improvements by pursuing a strategy of engagement.
