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October 21, 2022

ABN AMRO Bank’s aim is to make the biggest possible impact and, by doing so, create a more sustainable society. Head of Sustainability Richard Kooloos talks about the development of sustainable companies, about the increasingly strict regulations for impact recording and about the need to be able to collaborate with a partner such as StartGreen.

How do you shape sustainability at ABN AMRO?
'I have been focusing on sustainability in various roles for more than 15 years. At the present moment I am responsible for the sustainability policy of ABN AMRO Bank. Sustainability is about our own business operations, but above all about the preconditions that we impose on our clients' business operations in our lending. For example, about their transition to a 1.5-degree world and circular business operations.

Our policy is also aimed at making the greatest possible impact with our clients' investments. We look at how we can use that money and our influence for an economy that uses less CO2 emissions, which address the problem of declining biodiversity, reduce negative social impact and increase positive social impact. In essence, we have the same mission and ambition as StartGreen, we just have a different set of instruments.

How did the collaboration with StartGreen Capital come about?
The collaboration between the bank and StartGreen dates back to the founding of StartGreen. The founders saw a great need for financing for sustainability development. They brought in the knowledge and passion to finance those early phase companies and thus give them an extra boost. As a bank, you cannot give that impulse because the risk profile of start-up impact companies does not match bank credit. They are simply too young and therefore too risky.

We have therefore started to play a role remotely and as a bank have invested in the venture capital funds of StartGreen that can give start-ups a boost. In addition, we have provided a supervisory director to be able to make investment decisions. These StartGreen funds are now in the run-down phase, so they only have a single investment in the portfolio – mainly to take a company to the next phase. When StartGreen is looking for investors, we are always open to it. Together we try to grow the market. By sharing knowledge or by referring to each other.

StartGreen is now one of the big names in the sustainability world. They are driven entrepreneurs with a lot of experience in this field who have proven to be able to give starting entrepreneurs a pendulum. They do this with financial resources, but also with an enormous network at all levels. From: “I know a good CFO” to: “I can put you in touch with this government agency and this potential buyer”. Sometimes a brilliantly sustainable idea comes with an enormously robust business case not getting off the ground because of the lack of the right team or business acumen. That's why helping out is so important.

This long-term collaboration has also developed inwardly: we think making an impact with investments is so important that we not only have this facilitated by third parties, but have also taken up the gauntlet ourselves. That is why we set up our own Sustainable Impact Fund a few years ago. This does not stand in the way of the collaboration with StartGreen at all. In fact, the bank sometimes works with one of StartGreen's funds and our fund occasionally knocks on StartGreen's door when it is looking for investment partners.

What makes StartGreen a suitable partner?
The requirements for business operations and supervision have become much stricter in the last ten years. That sometimes makes it complicated for us: as a large lender we are becoming increasingly strict in processes and procedures, while as a starting company you need flexibility and capacity. You want to be able to facilitate that, but the different speeds make it difficult to connect it properly. The challenge is: How do we keep to the rules, but do we do it anyway? That is why it is great that we have an implementer like StartGreen who can offer that flexibility. The enterprising StartGreen has to be in between to be able to put that fire and that agility – if it can't go left, then maybe right – into practice.

Precisely because the demands on everything we do have increased enormously, we only want and can only work with parties that operate at a high professional level. StartGreen therefore has to meet our high supervision and quality requirements on the one hand, but with our confidence in their high-quality working method, they receive a valuable stamp: 'Approved by a large bank'. What I have experienced from the venture capital fund is that the companies in which StartGreen invests can in turn say: 'StartGreen and this big bank believe in me,' which radiated positively to potential investors or buyers.

Why does the bank participate in Oneplanetcrowd projects?
Some impact companies or energy projects require a tiered financing solution. In that ecosystem of parties that contribute in different ways to the success of such a company, you also need parties such as Oneplanetcrowd. We sometimes deliver one of those layers in the form of debt. We can do that if the crowdfunding platform is robust and has strict governance. We don't want investors to suffer and we get sucked into the negative publicity when a company fails. In my view, professionalism, robustness and solidity are therefore essential to be able to create more stacked financing solutions.

Incidentally, I think the function of crowdfunding is only to raise money for a small part. Another important part is building a community and thereby validating support. Crowdfunding gives a certain legitimacy and weight to an idea. Money is therefore the means, but not the end. The following also applies here: you must understand your profession well and understand the sustainability side well. I therefore think it is a good development that the ESCP, the new European rules for crowdfunding service providers, will separate the wheat from the chaff: smaller, vague parties will not receive a permit from the AFM and will disappear from the scene. This ensures better consumer protection.

How do you see the development of sustainability?
About 10 years ago, sustainability was still a strategic choice. In addition, I sometimes saw that it got stuck with recycling coffee cups and double-sided printing. Now sustainability is no longer distinctive at all, it is a condition. Moreover, this sustainability is increasingly data-driven. From a qualitative choice it has thus become a quantitative condition: from tell me to prove me. You have to be able to report and measure a lot. As a result, sustainability is penetrating more and more into the core of business operations. This means, among other things, that things such as nitrogen & CO2-emissions and flood risks now count much more heavily in investment decisions.

The old way of working no longer works. If you cannot provide the data, you will no longer participate. Or to put it Cruijffian: it only counts if you can count it. Each party does this in its own way. We have decided to do this together with a specialized party: the Impact Institute. I know that StartGreen has appointed a dedicated Sustainability Lead for this, who monitors the correct and complete measurement and recording of impact in World Favor. In this way we all find our own way out of the forest.

The EU Taxonomy will affect everything. Initially that will be a compliance nightmare, which may well take the impetus out of sustainability. Operators who get through the compliance valley of death and bring back that impetus will win the battle. If you manage to produce a good ESG report, while at the same time using that information to help entrepreneurs along the way, that’s when you can distinguish yourself. I am happy to see that StartGreen has that ability and knowledge. I am confident that StartGreen will come out of this even better.'

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