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Utrecht, September 2020
RabobankInvestor Presentation Sustainable Funding Framework
Sustainably Successful Together
A strategy centralised
around supporting a sustainable
society
Growing a Better World Together through our dual strategy
Growing a better world together
Banking for FoodBanking for the Netherlands
Excellent customerfocus
Rock-solidBank
Empoweredemployees
Meaningful cooperative
Customer satisfaction benefitting from focus on digitalization and launch of innovative products
Optimized domestic operating model improving commercial effectiveness
Focus on digital services to meet demands of customers with a strong performing digital platform
Rabobank front-runner in sustainable initiatives and financing
As a cooperative bank we have a strong focus on major societal transformations
Cooperative contribution to support local initiatives
Sound capital & liquidity position
Diversified loan portfolio with focus on the Netherlands
Continued focus on our core: divestment program completed
Our employees feel empowered to represent Rabobank and are inspired by our mission
Focus on people development and recruitment of strategic important target groups
Diversity is top priority and visible in senior management positions
Sustainability is in our DNA
Rabobank has been a pioneer and strives to continual improvements in its sustainability efforts
1998 1999 2003 2004 2007 2014 2015 2016 2017 2018 2019 2020
• Rabobankissues first ‘Groenbank’ green bond to retail clients
• Rabobank’s first annual sustainability report
• Rabobank starts calculating CO2
• Sustainability assessment obligatory in credit processes
• Founding member of the Equator principles (presently 95+ members)
• Founding member green bond principles (presently 300+ members)
• Client photo mandatory in credit approval process
• Rabobankpartner climate bond Initiative
• Rabobankoffices 100% climate neutral
• Rabobankgreen structurer of several first green issuances
• Rabobankinitiator of food, agri and forestry climate bond initiative standards
• Rabobank top 5 wind energy financier worldwide (Bloomberg)
• Introduction of Green mortgage
• Rabobank and EIB launch unique Impact loan fund for Dutch SMEs
• First green CP issuer ever
• Green depot for home-owners
• Rabobank, FMO and IDH launched the AGRI3 fund
• Co-author of the circular economy finance guidelines
• Green bond of the year award of environmental finance
• Oekom Prime status
• Member board of directors –global reporting initiative (GRI)
• Co-author of the social bond guidance published by ICMA
• 10% CO2 reduction per FTE compared to 2013
• € 80mn investment in AGRI3 by Rabobank and Ministry of Foreign Affairs
• H2 2020: Climate impact report Dutch portfolio
• Rabobank voted most sustainable bank in NL (Sustainable Brand Index)
• Rabobank joins Nasdaq Sustainable Bond Network
• Rabobank acted as Sustainability Coordinator for international agricultural commodity trader
• Rabobank participates in DNB anthology on Climate RiskCO2
• Sustainalytics ESG risk rating #1
• PCAF 2019 report to assess carbon footprint
• One of the first banks to sign the UN Principles for Responsible Banking
Rabobank is in the highest ESG class seen among banks
39
2nd out of 284 (segment Financials/ Commercial Banks & Capital Markets)
#2
Financial /
Commercial
Bank for
Sustainability
#1
Commercial
Bank for
Sustainability
Sustainalytics ESG Risk Rating
ISS ESG Corporate Rating
Sustainability integrated in credit approval process
Client engagement process
1. Sustainability Policy compliance
check
3. Preliminary
sustainability
category
4. Client
engagement
2. Sustainability analysis
5. Follow-up: Action
plan
Main developments
• Active client engagement aimed at improving their sustainability performance and to engage with clients on relevant climate change actions and support them with knowledge, a network and (financial) services
• Assessment of sustainability performance of potential and current business clients integrated in credit approval and monitoring processes
• Sustainability performance of clients with an exposure > EUR 1mln is measured in a Client Photo
• 27% of Wholesale clients and 11% of Local Rabobankclients received highest rating
• Target for 2020 is a client photo for 100% of our Wholesale and Dutch clients
• We are in the process of improving our rating methodology for Dutch rural and for most of our Dutch SME clients the new improved methodology is implemented
Our sustainability efforts in numbers
Sustainable products & services
• Sustainable financing amounted to EUR 49bn in H1 2020
• Sustainable products & services (2019):
• assets under management EUR 6.4bn
• sustainable funding EUR 5.3bn
• sustainable transactions for clients EUR 6.7bn
• Sustainable asset management (to become) the new standard:
• as of June 2020 the ‘Basic’ asset management service fully consists of sustainable funds
• in the second half of this year both ‘Active’ and ‘Exclusive’ asset management services will follow
Sustainability rating Wholesale clients
27%
67%
5%1%
Sustainability rating Dutch SME clients
11%
80%
9%
Energy label mortgage portfolio (Dec 2019)
24%
15%61%
D+
A
B
C
A label
Other
B label
A
B
C
Our contribution to the UN SDGs
• EUR 108bn lending in the Food & Agri sector
• Actively partnering with local cooperative banks in developing countries
• Rabobank frontrunner in financing sustainable energy generation
• EUR 4.2bn (H1 2020) of investments in project finance for sustainable energy generation
• Co-author of the circular economy finance guidelines
• Rabobank is main financier of the Dutch economy
• 300 clients assisted through our Circular Business Desk
• Several products & services to stimulate sustainable housing
• GreenHome tool for customer insights in sustainability measures to improve homes
• Launch BPD housing fund to develop 15,000 sustainable private sector rental houses
• EUR 48bn in sustainable finance in H1 2020; EUR9.8bn of this to businesses with a meaningful sustainability label
• Several sustainability-linked products and services through subsidiaries
• Actively involved in Food waste reduction initiatives
• Contribution and commitment to the Dutch Climate Agreement
• Committed to mandatory reporting on climate impact of our portfolio
• Clients’ sustainability performance integrated in credit approval process
• AGRI3 EUR 1bn fund together with partners to boost sustainable land use
• Actively involved in developing the Dutch Biodiversity Monitor for arable farming
• Deltaplan Biodiversity conservation
• WWF Rabo partnership for international projects around sustainable food production
• Member/co-chair of the Climate Smart Agriculture Working Group of the WBCSD
Growing a better world together
RabobankSustainable
Funding Framework
A Sustainable Funding Framework with ‘thematic Sub-Frameworks’
1
2
Renewable Energy
Sustainable Real Estate
Healthcare and Care Facilities
Covid-19 Crisis Support for SMEs
Four Sub-Frameworks
Several types of sustainable financial instruments to be issued under the same Framework
Financial instruments might include: bonds, loans, derivatives, commercial paper, certificates of depositetc.
Sustainable instruments can be issued in different flavours
• Each issuance will occur under one thematic Sub-Framework• No mix of Use of Proceeds categories in one instrument
Sub-Framework I
Renewable energy
Use of Proceeds:• Solar energy projects• Onshore and offshore wind energy projects
ICMA Green Bond Principles & LMA/APLMA/LSTAGreen Loan Principles category :Renewable Energy
Sustainable Development Goal (SDG) contribution:SDG 7: ‘Clean and Affordable Energy’ and SDG 13: ‘ClimateAction’
EU Environmental Objective:Climate change mitigation
Impact reporting• Estimated installed capacity in gigawatt (GW)• Indicative volume of carbon emissions avoided• Standard Equator Principles reporting• Case studies
Green Sub-Framework alignment with the EU Green Bond Standard
✓EU Environmental ObjectivesSub-Framework I on renewable energy has a direct impact on the EU Environmental Objectives ofClimate Mitigation
No significant harmAdverse risks on all loans and projects financed under the Framework (and by Rabobank in general) aremonitored via:• Sustainable Policy Framework• Client sustainability assessments
Social SafeguardsSocial safeguards on all loans and projects financed under the Framework (and by Rabobank ingeneral) are secured through human rights and labour standards that include alignment with:• Eight core conventions of the International Labour Organization (ILO) as set forth in its
Declaration on Fundamental Principles and Rights at Work• UN Declaration of Human Rights• UN Guiding Principles on Business and Human Rights
EU Taxonomy• Sub-Framework I on renewable energy aligns with the EU Taxonomy under NACE codes D.35.1.1
(Production of Electricity from Solar PV ) and D.35.1.1 (Production of Electricity from Wind Power )
✓
✓
✓
Sub-Framework II
Green Real Estate
Use of Proceeds:
Mortgage loans for real estate used for commercialpurposes in the Netherlands that received an EnergyPerformance Certificate (EPC) label A or higher
ICMA Green Bond Principles & LMA/APLMA/LSTAGreen Loan Principles category :
Green real estate
Sustainable Development Goal (SDG) contribution:
SDG 11: ‘Sustainable Cities and Communities’
EU Environmental Objective:
Climate change mitigation
Impact reporting
• CO2 emissions avoided compared to average energy labels in the Netherlands
• CO2 emissions avoided compared to theoretical original built quality of buildings
• Case studies
Sub-Framework III
Healthcare and Care Facilities
Use of Proceeds:
• Loans provided to physical and mental healthcare services (e.g. medical hospitals, psychiatric and substance abuse facilities)
• Loans provided to care centers (e.g. community care facilities for the elderly or people with disabilities)
ICMA Social Bond Principles:
Access to essential services (health andhealthcare)
Target Population:
Vulnerable groups and people withdisabilities
Sustainable Development Goal(SDG)
contribution:
SDG 3:‘Good Health and Well-Being’
Impact reporting
• Estimated number of people who received care services
• Distribution of real estate energy labels of facilities
• Average absenteeism under employees
• % of facilities using renewable energy, are involved in circular economy solutions, have a monitored energy management and carbon emission reduction plan, have a sustainable purchase and waste plan and a vitality plan for employees, is affiliated with initiatives and certifications e.g. ‘Green Deal Duurzame Zorg’ , the ‘Milieuthermometer Zorg’ or ISO 26000
• Case studies
Sub-Framework IV
Covid-19 Crisis Support for SMEs
Use of Proceeds:
• Loans provided to Dutch SMEs
• Existing loans to SMEs with an extended redemption period offered by Rabobank
ICMA Social Bond Principles:
• Employment generation through the potential effect of SME financing
• Access to essential services: financing and financial services
Target Population:
SME owners and employees and vulnerable groups
Sustainable Development Goal (SDG)contribution:
SDG 1: ‘No Poverty’ and ’SDG 8: ‘Decent Work andEconomic Growth’
Impact reporting
• Employee evolution
• Revenue evolution
• Distribution of real estate energy labels of SMEs
• Percentage of SMEs using renewable energy
• Percentage of SMEs that with specific external sustainability certifications
Framework core components: Management of Proceeds and Reporting
Reporting
• Every 6 months, Rabobank will report on the volumes of outstanding sustainable financial
instruments outstanding on its website
• A Sustainable Funding Report will be published annually with allocation and impact
reporting per Sub-Framework
• Reporting will occur on portfolio level
• Reporting on a transaction will occur until full allocation of the proceeds
• The Sustainable Finance Funding Report will be audited by an external auditor and be
published on Rabobank’s website
• Allocation reporting is tailored per Sub-Framework, but intends to include for all Sub-
Frameworks:
– Percentage allocated
– Percentage new finance vs. refinance
– Number of eligible projects provided with finance
– Alignment with specific Sustainable Finance Guidelines
• Impact reporting is tailored per Sub-Framework (see slides on Sub-Frameworks for details)
Management of Proceeds
• Balanced by a matching amount of loans to eligible projects on a portfolio basis
• Healthy buffer of assets over liabilities of at least 130%
• The balance of unallocated proceeds are held and/or invested at Rabobank’s own discretion,
in its liquidity portfolio
Managing the do no significant harm principles in our loans
Rabobank core values
Respect Sustainability ProfessionalismIntegrity
Sustainability Policy Framework
Basis of sustainability standards for business relationships, and for providing financial products and services:
● Core Policies on ESG topics● Theme policies on material, thematic topics
● Sector policies on specific industries and supply chains
Periodic Sustainability Assessments
Sustainability Matrix applicable to Dutch retail clients with loan >1m• Tailored for 40 different sectors• Alignment with the Sustainability Policy
Framework • Data collection on client’s sustainable
business conduct
GAIA Next assessment applicable to wholesale clients with loan >1m• Alignment with the Sustainability Policy
Framework • Data collection on client’s sustainability
opportunities and risks
Managing the Social Safeguards to be respected by our clients
Rabobank prevents and mitigates adverse impacts on human rights from
its activities and associated relationships, but also contributes positively
to human rights wherever it can
Rabobank upholds:
The United Nations Declaration of Human Rights
The United Nations Guiding Principles on Business and Human Rights
Eight core conventions of the International Labour Organization as set forth in its Declaration on
Fundamental Principles and Rights at Work
Rabobank describes own commitments and its expectations towards clients in the
Sustainability Policy Framework:
• Core policy on human rights including:
– Requirement to uphold the UN Declaration of Human Rights, and related international legislation
and the standards as described in the ILO Declaration on Fundamental Principles and Rights at
Work;
– Transparency requirements
• Core policy on labour standards including:
– Requirement to uphold internationally recognized labour standards, including those described in
the IFC Performance Standard 2 on Labour and Working Conditions and
– Transparency requirements
– Diversity expectations
Disclaimer
This presentation (the “Presentation”) is prepared by Coöperatieve Rabobank U.A. (“Rabobank”) incorporated under the laws of the Netherlands. The liability of its members is excluded. Rabobank is among others
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