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Adrian de Groot Ruiz / True Price
Tjeerd Krumpelman / ABN AMRO
Integrated Profit & Loss: Progress measurement 2014-2016
Reporting 3.0 conference, June 12th 2018
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ABN AMRO’s aim: long-term value creation
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Challenge
How can ABN AMRO create more value?
For ABN AMRO it is important to have a sustainable business model that creates value for all stakeholders
In daily reality, it can be challenging to make this practical and balance business and societal considerations, now and in the future
How can ABN AMRO improve its sustainable business model that creates value for all stakeholders?
ABN AMRO can improve its sustainable business model by measuring, steering and reporting on value creation for all stakeholders
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ABN AMRO & TRUE PRICE
2017
IP&LPilotformortgagesandABNAMRO
total
Progressreport
2014-2016
HumanCapital/Employee
development
2012 2015 20182017
TruePriceofdiamondsIP&LPilot
Cocoatradefinance
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A. Measure value creation for all stakeholders
B. Report on value creation for all stakeholders
C. Steer on value creation for all stakeholders
Measuring, reporting & steering make value creation actionable
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How to measure value creation for all stakeholders?
Qualitative estimate of ABN AMRO’s material impacts as found in an internal expert session
1. Identify the material impacts on all capitals 1)
Benefitsofuseofrenewableenergy
CO2andenergysavingsduetobankpolicies
CO2andenergyuseofownoperationsWateruse
Scarcematerialuse
Wasteproduction
Biodiversitylosses
Landuse
Airpollution
CO2andenergyuseinvaluechains
Indirectsocialbenefits
Reputationandtrustofsector
Facilitationofpaymentsystem
Stressduetopaymentdifficultyatclients
Privacyconcerns
Humancapitalcreationfromtraining
on-the-job-learning
Increasedlifesatisfactionofemployment
HumanrightsviolationinsupplychainHealthandsafety(ABNARMOemployees)
Healthandsafety(valuechain)
Opportunity costoflabor
Paymentstosuppliers(OPEX)
Internalizationopportunities
Taxespaid
Paymentstoemployees
Contribution tobank'sprofit
Internalizationrisks
Paymentfromclients
Changeinphysicalassetsofthebank
Qualityofserviceprovision
Valueoffinancialservicestoconsumers
Intellectualcapitalcreationduetotraining
IncreaseinbrandvalueofABNAMRO
Consumerknowledge
Moreandbetterdata
Cybersecurityconcerns
-0.5 0.5 1.5 2.5 3.5 4.5 5.5
Socialcapital
Humancapital Producedcapital Intellectualcapital
Financialcapital
Increaseincapital
Decreaseincapital
Naturalcapital
1) Six capitals as recommended by the International Integrated Reporting Council; impacts shown combine impacts to different stakeholder groups
A. MEASURE
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Facil itationofpaymentsystem
Consumersurplus
Stressduetopayment difficultyatcl ients
Privacyconcerns
Humancapitalcreationfromtraining
Humancapitalcreationduetoon-the-job-learning
Increasedl ifesatisfactionofemployment
Paymentstoemployees
Healthandsafetyincidents(ABNARMOemployees)
Benefitsofuseofrenewableenergy
CO2andenergysavingsduetobankpolicies
CO2andenergyuseofownoperationsWateruse
Wasteproduction
Scarcematerialuse
Landuse
Biodiversitylosses
Airpollution
CO2andenergyuse(downstream)
Indirectsocialbenefits
Reputationandtrustofsector
Taxespaid
Humanrightsviolationinsupplychain
Healthandsafetyincidents(valuechain)
Internalizationopportunities
(Short-term) investorvalue
Internalizationrisks
Employees Society-at-large(nature)
Investors
Increaseincapital
Decreaseincapital
Clients Society-at-large(other)
How to measure value creation for all stakeholders?
2. Match impacts to stakeholders1)
1) Impacts ‘Consumer surplus’ and ‘(Short-term) investor value aggregate impacts of the previous page into tangible benefits to stakeholder groups. Stakeholder groups in line with ABN AMRO’s segmentation, with society-at-large split into a part for natural capital and a part for all other capitals to stress the special character of natural capital.
A. MEASURE
Qualitative estimate of ABN AMRO’s material impacts
as found in an internal expert session
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IP&L allows reporting on net value creation per stakeholder…
• Increaseinnetprofit
• Increaseinbrandvalue
• Staffreduction
• Slightincreaseemployeeengagement
• Declineinownemissions
• Newgreeninitiatives
Regainingtrust
• Increasevaluemortgages• IncreaseNPS• (Decreaserevenue)• Increasingdigitalization
B. REPORTING
Publish integrated Profit & Loss (by capitals and/or stakeholders) to report on progress
Society at large (nature)
Society at large (other)
2014 2016
Clients Employees Investors
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€
Using this to steer on value creation is the next step
1. Track and set targets on progress
Impact 2016
Target 2020
C. STEERING
Clients Employees Society at large (nature)
Society at large (other)
Investors
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END
Integrated Profit & Loss: Progress measurement 2014-2016
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