Report with ABN AMRO: Guiding a bank’s energy portfolio to Paris

As part of its broader work with the banking sector, 2DII partnered with the leading Dutch bank ABN AMRO to apply the PACTA scenario analysis methodology to its loan and investment portfolio.

The goal of this collaboration was two-fold:

  1. Measuring the exposure of ABN AMRO’s corporate loan book to different high and low carbon technologies across several climate relevant sectors
  2. Assessing the alignment of the production plans of ABN AMRO’s clients with a scenario in line with the Paris Agreement

One of the main conclusions from the analysis was that ABN AMRO is well on track, but not fully aligned yet with the Paris Agreement.

On the one hand, ABN AMRO is well underway with its energy clients: already 60% of the loans in its energy portfolio is allocated to renewable (solar and wind) power generation capacity. On the other hand, this is not yet enough for ABN AMRO and its clients to be aligned in the future with the Paris Agreement. The future expansion of cleaner production capacity among clients is the issue that matters most, not where ABN AMRO is today. Continued investment in ever cleaner technologies and active engagement with energy clients are required towards 2030.

A next-generation climate strategy

“Banks armed with a climate strategy don’t always have an easy time communicating their plans to the outside world,” says Jakob Thomae, Managing Director at 2DII.

“Curbing carbon emissions in their own client base is a relatively simple thing for banks to do. What’s key is being able to show that such measures actually do have a positive effect on our planet,” Jakob continues. “ABN AMRO has the resources, experience and expertise to develop a next-generation climate strategy. Most importantly, though, the bank should continue to focus on the demonstrable impact resulting from its influence as a lender, rather than exclusively reducing carbon emissions in its portfolio by way of excluding clients. That distinction isn’t always easy to explain, nor is it always in line with market expectations.”