9. Meaningful cooperative
At the heart of society
At Rabobank we are close to our customers. From our cooperative origins and strong local roots, we take our role as a socially responsible bank seriously: by actively participating in many local initiatives, by supporting both business and private customers and by promoting sustainability.
As the largest lender to the SME sector, market leader in the food and agribusiness sector and a leading bank for private individuals and entrepreneurs, we play an important role in Dutch society. Through our social support, we give the cooperative a clear identity and distinguish ourselves from other banks. Rabobank is connected to the future of the Netherlands via our members and customers: if our customers are doing well, we are doing well.
We promote self-sufficiency worldwide through the Rabobank Foundation. We ensure that more people in the developing world can access financial services through Rabo Development. And, we encourage customers to take steps toward a more sustainable future.
We shape these ambitions by supporting our private and business customers in terms of sustainability. We do this with knowledge, networks and financial solutions. Furthermore, we accelerate the sustainability process in the food and agribusiness sector, and the food supply chain, and we strengthen local communities. Finally, we continue to make our own business processes more sustainable and to lower our ecological footprint. Our company footprint reflects how much organically productive soil and water surfaces we use each year to maintain our consumption level and to process our waste production.
Within the Netherlands, we are the largest financiers of SMEs. We lend money to numerous entrepreneurs with good business plans. If a customary way isn't feasible, we usually come up with alternatives.
This can be a construction whereby customers raise money via crowdfunding and the bank lends the remaining part. We also match innovative entrepreneurs with private moneylenders, for example former entrepreneurs who want to invest in young people with a fresh view or a surprising idea. This happened in 2015, for example, during our seven 'Meet & Grow' events. In short, Rabobank looks beyond the old-fashioned methods of financing: more than ever, we are acting as financial linking pin.
Read more about Meet & Grow
We like to promote sustainable pioneers. At the end of 2015, together with the European Investment Bank (EIB), we introduced the Rabo Impact Loan: a business loan with an interest rate discount especially for sustainable companies. Companies that meet selected sustainability quality marks are eligible for an interest rate discount on new financing. Depending on the duration, this can be as much as 1.2%.
More information can be found in the annual report
Rabobank helps customers in the Netherlands to continue to bank responsibly and independently for as long as possible. From junior to senior, and from inexperienced to self-sufficient.
With our Banking Together programme, we support special target groups with extra services: youth, the elderly and people with difficulties. Rabo Money Express, for example, delivers cash to the elderly who are no longer able to use an ATM. The bank organises many workshops to teach the elderly and disabled people about internet banking or mobile banking services. Every year, many Rabobank colleagues explain to young school children how a bank works in 'Bank in the Classroom'. Rabobank’s young people's website called B.O.E.G. teaches youngsters how to deal with money.
For years, Rabobank has been a bank at the centre of society. We strengthen local communities by supporting various local economic and social initiatives, from support of local organisations to research into growth opportunities for the regional economy.
Every year, we set a part of our net profit aside as an investment source for these types of projects. Our members have the final say on where this money is spent. Through this cooperative dividend, we have a continuous, positive impact on the Netherlands. In this way, we returned EUR 62.2 million to society in 2015.
For example, when the Rabobank branch office in Waspik faced closure in 2015, the local Rabobank decided not to sell the building. The bank wanted to use the space for local, social initiatives. Residents and entrepreneurs from inside and outside the village contributed ideas. In a special vote, the winner was chosen: a mini shopping centre. This is an accessible and affordable location for new companies even if they can barely afford, or cannot afford at all, the rent for their own shop space.
Read more about Waspik: Small chances for large start-ups
In 2016, we will continue with these types of activities in order to improve the entrepreneurial spirit in the Netherlands, to promote optimal life course, and to strengthen the living environment.
Business is struggling and the government is taking a step back, so Dutch society is faced with social, economic and ecological issues. Solutions can often be found through collaboration and sharing. Active citizens and entrepreneurs regularly work together and the cooperative as a legal form is ideal for such initiatives. The cooperative organisational model is gaining ground. In 2015, the Netherlands counted approximately 4,700 cooperatives with a collective income of EUR 125 billion.
Cooperatives are especially popular in the energy, healthcare, childcare, credit, regional development and mutual insurance sectors. The self-employed and small companies also tend to join together in cooperatives. New cooperatives strive not only for economic advantages for their members, but also for sustainability and job creation, for example.
We happily share our knowledge and networks with local and regional cooperative initiatives. For example, we offer sector knowledge about the SME and public sectors, we give advice about starting a cooperative and tips for allocating roles. We put business networks in touch with each other. And, of course, cooperatives can also come to us for payment transactions or insurance.
Rabobank promotes a more dynamic society. Hockey, equestrianism and cycling are the most important sports that we support in the Netherlands: from amateurs to the world's top athletes. At the end of 2015, we announced that we would amend our sponsorship policy. From 2017, the focus will be more on local sponsoring to get even closer to our customers. This shift means that we will not be renewing our contracts with the Netherlands national equestrian associations and cycling teams.
We are the main sponsor of the Dutch branch of the Special Olympics, the world's largest sports organisation for people with mental disabilities. We stimulate businesses to invest in disabled sports by collaborating with the Fund for Disabled Sports (Fonds Gehandicaptensport). We support the Youth Sports Fund (Jeugdsportfonds), which ensures that children who are not able to join a sports club due to financial reasons can join anyway.
Art and culture are the barometer of society. That is why Rabobank wants to make a structural contribution in this area. We do this sharing the Rabo Art Collection with the public in collaboration with cultural partners. Furthermore, we promote talent by collaborating, for example, with the National Academy of Fine Arts in Amsterdam. Through our culture sponsorship policy, we also focus on classical music via a partnership with the Netherlands Bach Society.
Local Rabobanks' involvement with many organisations within their field of operation supports an important cornerstone of society and emphasises Rabobank's social involvement. Our participation in these clubs, in turn, leads to a prominent role in society.
In 2015, almost EUR 42 million went to social sponsoring.
Investing in people who work hard to be independent in the Netherlands and around the world is the idea behind Rabo Foundation. For more than forty years, our social fund has been dedicated to offering disadvantaged people a better future by making them self-sufficient.
In the Netherlands, the foundation focus is on participation of vulnerable groups in society. We work together with social welfare organisations and social enterprises. For example, to promote labour participation of people who are distanced from the labour market, and to make sports more accessible to people with disabilities. In the Netherlands, 740,000 people benefit directly from Rabo Foundation's support.
In developing countries in Africa, Asia and Latin America, Rabo Foundation helps small farmers build an independent existence. Approximately 400,000 farmers and poor rural residents benefit from the support of Rabo Foundation. We grant loans for working capital and investments in cooperatives. This provides the cooperative with means to grant loans to its members against fair conditions in line with the prevailing market.
At the end of 2015, Rabobank's social funds supported more than 290 projects with over 300 project partners abroad, consisting mainly of product cooperatives and savings and credit cooperatives in 24 countries. In the Netherlands, the Foundation supports 53 projects. At the end of 2015, Rabo Foundation had more than EUR 29 million in outstanding loans and guarantees.
Read more about Rabo Foundation
With the slogan 'Reaching the Unbanked', Rabo Development wants to increase access to financial services in developing countries and emerging markets. Paying, saving and borrowing can increase development opportunities.
Rabo Development invests in financial institutions in Africa and Latin America in rural areas and focused on the agricultural sector. Rabo Development holds a minority share in these partners’ banks, provides capital and shares knowledge through management and technical assistance. The partner banks of Rabo Development serve more than six million customers.
Read more about Rabo Development
Rabobank strives for a sustainable society. We adapt our own business processes and services to this goal. Simultaneously, we encourage our customers to contribute. Our focus and ambitions until 2020 are set out in the memorandum 'Sustainably Successful Together'.
Read more about Sustainably Successful Together in the annual report
We want to accelerate sustainability in food and agribusiness worldwide. Feeding the entire world population is becoming more challenging. In our opinion, sustainability plays a key role in solving this problem. We also want to strengthen the vitality of communities. In this regard, we are focused on sustainability, economic vitality and quality healthcare and housing in the Netherlands.
We have a variety of options for private customers wishing to bank sustainably. We promote sustainable investment, in which financial yield is just as important as social impact. We also inform customers about the possibilities and financial impact of making their homes more sustainable, and we offer products to enable this. Twenty local Rabobanks organised Smart Renovation meetings in 2015. Here, customers come into contact with experts in the fields of energy savings and sustainable energy conservation, as well as contractors and Rabobank consultants. In this way, we want customers with sustainability requirements to find suitable products with us.
All companies face the challenges and issues of lowering production costs, using fewer raw materials, reaching consumers with sustainable products. That is why we help our business clients to make their businesses more sustainable, step-by-step. Every year, we create a 'client photo' where we record how sustainable the business is. In 2015, we took a total of 54,000 client photos to share knowledge and opportunities on sustainability.
We also gain better insight into the small number of partners that don’t comply with our sustainability policy: this is less than 0.3% of our total client base. Through regular discussions about their status, we continue to help our clients focus on sustainability. In the Circular Economy Challenge programme in 2015, we supported nine businesses in developing a business case in the field of circular entrepreneurship.
We formulate our vision on opportunities for making the agricultural value chains of soybeans, palm oil, cane sugar, forestry, cattle, dairy, fish, coffee, cocoa and biomaterials more sustainable. We share these ideas in Round Tables to accelerate sustainability in the chains, and we work together with our clients to convert these dialogues into sustainable business processes.
Our own business processes and activities are also becoming more sustainable. We lowered our ecological footprint by 3.1% per FTE compared to 2014. We are increasingly integrating sustainability in training for our employees so that they can give our clients sound advice on this topic. Finally, we are measuring the perception of colleagues and clients about Rabobank’s sustainability contribution.
Read more about sustainability in the annual report 2015
In December 2015, after an intensive internal dialogue, Rabobank decided to substantially change its cooperative structure. From 1 January 2016, Rabobank is one cooperative, with one banking licence and one balance sheet. In the new structure, members have a stronger voice. Local members’ councils will focus even more on the bank’s local services and our role in society.
Read more about this topic in chapter Organisational structure
Intensive, efficient agriculture and food production contribute to improving the food supply and achieving climate goals. However, in various countries, broad public support for this production method is lacking. How does Rabobank deal with this tension?
In 2050, the demand for food worldwide will be 60% higher than it is now. This is because the world population will grow from seven to more than nine billion people, who on average will also be more prosperous.
There are increasingly fewer natural resources available, such as (extra) agricultural land and fresh water, to produce this food. Moreover, it is important that the production is less damaging to the environment, for example in terms of emissions of greenhouse gases that are responsible for climate change. Therefore, production will have to be 'more with less': more food with less use of natural resources, less waste and less environmental impact.
Highly productive and efficient forms of agriculture and livestock farming are a good way to respond to these challenges. More production per acre, per animal, per litre of water and per kilo of fertiliser is good for the food supply. It also leads to fewer emissions of greenhouse gases per kilo of animal product.
Modern techniques help farmers and horticulturists to realise this efficiency benefit. There are global positioning systems (GPS) and plant and soil sensors that significantly increase the efficiency of water and crop protection products in irrigation systems. Drones follow the activity of cattle and crops. Robots and sensor technology observe the behaviour and the milk yield of cows. Many of these technologies lead to better efficiency and environmental benefits, are attractive for businesses that are managed professionally, and are of a certain scale.
However, sustainability is a broad term. For example, it also relates to animal welfare and a production method that is as natural as possible. Such animal-friendly and organic production systems are, however, often less intensive, have a lower productivity, need more land and cause higher emissions of greenhouse gases per kilo of product.
Animal-friendly and organic agriculture often plays a pioneering role in finding alternative solutions in the area of animal welfare and in the use of antibiotics and crop protection products. This makes organic agriculture a strong driver for improvements in traditional, intensive agriculture. Think, for example, of applying organic crop protection through the use of insects in the regular horticultural industry. Or, the 50% reduction in antibiotics use in Dutch livestock farming in the past years. There are opportunities that combine the best of two worlds.
Apart from facts and scientific explanation, there is also social perception, which is often based more on feelings. At the same time, sectors and entrepreneurs around the world need public support as a licence to operate.
In the Netherlands and other countries in Northwest Europe, some consumers value the 'organic', 'natural' and 'animal-friendly' character of food production. Outside Northwest Europe, this is less apparent and the emphasis is more on efficiency. This includes enabling entrepreneurs to lower production costs, to invest in sustainable new technology and to build up financial buffers. Expansion of scale is a possible means, although not a goal in itself.
Rabobank takes responsibility for financing food and agribusiness in all its aspects, including organic and non-organic businesses. In terms of financing, we evaluate whether the company will still have validity and public support in 10 years' time. Businesses that score above average on sustainability have better future prospects.
Sustainability aspects, such as environmental impact, animal welfare and social aspects, play an important role in our contact with clients. To that end, we take a 'sustainability photo' of all wholesale clients to encourage and support them on the road to sustainable development. Trendsetters can even become eligible for more beneficial financing conditions. For all financing worldwide, Rabobank aims for minimum requirements in terms of animal welfare, social aspects and environmental impact based on scientific insights. Every region has additional requirements based on legislation and regulations, specific market conditions and social preferences.
We also talk with clients about the public support for their activities, and encourage them to engage in active dialogue with society. This forms part of our risk weighting. Rabobank also takes responsibility in the areas of social awareness and education about such dilemmas. This happens in presentations, reports and active engagement at Round-Table discussions with a broad spectrum of stakeholders.