Mike Scott reports on how the Dutch bank is applying the UN Guiding Principles Reporting Framework to the company's impact on rights holders
Dutch bank ABN AMRO published its second Human Rights Report in February 2019. This followed its inaugural report in 2016, when ABN AMRO became the first financial institution to apply the UN Guiding Principles Reporting Framework.
The 2019 report was both easier and harder to produce than the first, says Herma van der Laarse, a sustainability reporting specialist at the bank who worked on both reports. “That first report, because we were the first bank doing it, we received a lot of applause for doing it and for our honest tone of voice. But what was easier second time around was that we had a better understanding of what the UNGP framework was about.
“When writing the first report, we were not sure how to interpret the framework. We initially wanted to comply with the entire framework, but we learnt that this was impossible [and] also not necessary. We use the framework as a benchmark, to collect the right information, to ask the right questions, to identify certain examples or approaches as relevant. The framework helps us to identify gaps, areas for improvements and challenges, which is very helpful in steering our human rights efforts and our level of transparency.”
The impact of a particular activity on the company could be very small, but it could make a big difference to rights holders
The other big issue the bank faced was getting to grips with the idea of “salience”. The reporting framework asks companies to identify their salient issues, “which was – compared to the concept of materiality – a whole new idea of how to look at human rights to determine which rights are at risk of the most severe negative impact through the bank’s activities or relationships,” Van der Laarse says.
With materiality, a company works out which environmental, social and governance issues have the biggest impact on its operations. But while materiality focuses on the impact on the business, salience focuses on the company’s impact on human rights holders. “The impact of a particular activity on the company could be very small, but it could make a big difference to rights holders,” she adds.
ABN AMRO identified four key areas – privacy, discrimination, labour rights and land-related human rights. The importance of each of these salient issues varies depending on its role. Privacy relates mainly to clients (and employees, though to a lesser extent), while discrimination affects both its employees and actual and potential clients. Labour rights is a factor for employees but also workers in client supply chains and companies in which the bank invests on behalf of clients. Land-related rights affect local communities and indigenous peoples in relation to corporate clients or companies in which the bank invests on behalf of private clients.
ABN AMRO’s first report was, to a large extent, based on qualitative information such as anecdotes and stories, but in its most recent document, the bank attempted to provide more quantitative information, such as the number of engagements related to human rights and the number of people in debt-avoidance programmes. “However, we also had lots of discussions about how useful data is. You need to think about what are the right key performance indicators (KPIs) before reporting on an issue,” Van der Laarse says.
“Many people think human rights is a difficult topic and are a bit frightened by it. Our human rights reports have really helped to explain to colleagues that it is not a frightening concept, but the reality of our business every day. They help to explain that everyone has a role to play.”
This article is part of the in-depth Human Rights briefing. See also: