Rabobank Group

Corporate Social Responsibility at Rabobank

April 20, 2007

Roberto de Cardona

Marco Finetti

2 Rabobank Group

Rabobank

� 15th largest bank in the world

� Leading Food & Agri bank

worldwide

� Co-operative (no

shareholders, not stock listed)

� Over 56.000 employees

� AAA rated commercial bank

� Best European bank in SAM /

DJSI rating (Triple P), second

worldwide after Westpac, Au.

3 Rabobank Group

CSR: people, planet, economy

� Corporate Social Responsibility:

– In addition to profit also take social and environmental aspects

into account

– CSR � PPP: People, Planet, Profit � ‘Holistic Approach’

Clients/Sup

pliers

Clients/Sup

pliers

Clients/Sup

pliers

Clients/Sup

pliers Members

Members

Members

Members

Society

Society

Society

Society

InvestorsInvestorsInvestorsInvestors

Employees

Employees

Employees

Employees

Profit

PlanetPeople

InnovationRisk Mgmt

Cost reduction

4 Rabobank Group

Most Relevant International Guidelines

� Equator Principles

� OECD guidelines for multinational companies

� UN Global Compact

� UN Human Rights Norms for Businesses: norms 1-14

� ILO Conventions

� RSPO principles and criteria

5 Rabobank Group

Why a CSR assessment?

Ethics

� Our code of conduct says:– We care for nature, living environment and animal welfare– We respect human rights and local culture– We take into account direct and indirect effects of our

activities– We want to contribute to sustainable development

(economical, social, environmental)

Reputation

� Comes in when we support a client who did not solve an

issue that conflicts with our codes or ethics

6 Rabobank Group

Key issue approach

� We assess key CSR issues in a sector

– Passive attention for rest of possible CSR issues

– If no group policy exists on an issue, we use common sense

� Unwanted practices:

– Describe activities that we do not want to support

– Violation without means ending a relationship (non compliant)

� Good practices:

– Describe good practices

– Positive role of Rabobank

– Client can be compliant, compliant in the near future or non

compliant

– Lack of interest to improve may on the long term result in ending

relationship (will not happen often in a good relationship)

7 Rabobank Group

Normative framework Rabobank

� 10 CSR guidelines based on code of conduct, mission

statement and external CSR guidelines

� Exclusion list for sensitive activities

� Specific CSR guidelines or policies (some in preparation)

� Advice Ethics Committee

� Integrity guidelines (this is the domain of the Compliance

Officer)

8 Rabobank Group

10 CSR-Guidelines

1. Corruption / bribery

2. Poor labour conditions

3. Exploitation of workers

4. Harmful child labour

5. Discrimination

6. Pollution

7. Irresponsible depletion of scarce natural resources

8. Cruelty to animals

9. Poor treatment of indigenous peoples

10. Health and safety risks for consumers

9 Rabobank Group

Local Management Defines Local Actions

� Global norms and guidelines need to be translated into local

actions and criteria, e.g. in case of “corruption/bribery”:

– How can Rabobank detect whether a client is involved in

corruption?

– What type/level of corruption/bribery can be accepted

� Translation is done together with local senior management in

order to get practical and acceptable approaches

10 Rabobank Group

List of CSR issues per sector

� Automotive industry

� Beverages sector (Europe)

� Chemical industry

� Cocoa sector (Europe)

� Construction industry

� Dairy sector (Europe)

� Farm inputs sector (Europe)

� Food retail and consumer sector (Europe)

� Fruits, vegetables and flowers (Europe)

� Grains and oilseeds sector (Europe)

� Leisure industry

� Metal products and machine building industry

� Metal sector (Europe)

� Palm oil sector

� Public sector

� Real estate industry

� Seafood sector (Europe)

� Shipbuilding industry

� Staffing industry

� Sugar sector (Europe)

� Soy sector

� Timber sector

� Waste management

� Wholesale and retail industries

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Rabobank CSR group organization

• Green Management

• Rabo Green Bank

• Rabo Innovation Capital

Fund

• Rabo Sustainability Fund

GreenBanking

SustainableDevelopments

FundsEthics and Issue Management

CorporateSocial Responsibility

Division

Staff

• (Strategic) Sustainable Developments

• Internal Environmental Care

• Sustainable Asset Management

• Secretariat• Communications• Control• Donation Fund CSR

• Rabobank Foundation (national)

• Project Fund for memberissues

• Herman Wijffels Fund

RabobankFoundation

(international)

SocietalFunds

12 Rabobank Group

CSR-check in Client Acceptance

Rabobank GroupPolicies

NGOs

Clients

Permanent dialogue

Tailored CSR Credit Guidelines

CreditDecision

External Norms /Guidelines

NormativeFramework

13 Rabobank Group

CSR check process

CSR qualification:

� Acceptable� Acceptable under conditions� Not acceptable

Explanation on behaviour regarding CSR issues

� Direct information

� Public information

� Signals

� One obligor principle

Types of issues:

� Sector specific� Country specific� Client specific

consideration

Credit applicationidentification CSR issues

CSR guidelines Rabobank Group Based on the code of conduct and external guidelines

� 10 guidelines for main issues� CSR issue lists� CSR policy documents

14 Rabobank Group

Investigate only when meaningful

� Standard case: high level review

– Underlying assumption: client operates in accordance with CSR

normative framework

– i.e.: assume that client is “innocent” unless the bank has other

information

� In-depth investigation needed if:

– There are signals of non-compliance

– The client is active in predefined ‘high risk sectors’

15 Rabobank Group

Non-compliance ⇒ Proactive advice

� Acceptable clients:

– Client meets all CSR requirements, OR:

– Client’s activities are not “up to standard”, but client shows

commitment to improving the situation within a reasonable

period of time

� Second category most interesting since Rabobank can

initiate/accelerate improvement by engaging with the client

� But: competition often constrains scope of ‘proactive advice’

16 Rabobank Group

Rabobank Group key figures¹2002 - 2006

2006 2005 2004 2004 2003 2002

Services (EUR mln)

Balance sheet total 556,455 506,573 483,574 475,089 403,305 374,720

Lending to the private sector 324,100 278,095 248,958 252,996 235,425 212,323

Due to customers 215,899 186,459 177,482 192,123 172,571 171,632

Assets under management 286,400 224,200 223,400 195,000 184,000 168,000

Results (EUR mln)

Total income 10,049 9,363 9,222 10,055 9,018 8,518

Operating expenses 6,887 6,242 6,177 6,732 6,243 5,839

Net profit 2,345 2,083 1,793 1,536 1,370 1,222

Market shares

Mortgage loans 26% 23% 25% 25% 26% 26%

Savings 39% 39% 39% 39% 38% 40%

SMEs (total) 38% 38% 40% 40% 39% 39%

Agricultural sector 84% 83% 84% 84% 85% 83%

Client data

Number of members (in thousands) 1,641 1,551 1,456 1,456 1,360 1,108

Client satisfaction private individuals³ 7.5 7.4 7.3 7.3 7.7 7.4

Physical presence

Local Rabobanks 188 248 288 288 328 349

Branches:

offices 1,214 1,249 1,299 1,299 1,378 1,516

points of contact 3,091 3,031 2,965 2,965 2,800 2,697

Foreign establishments 330 267 244 244 222 169

1. The first three columns headed 2006, 2005 and 2004 are based on IFRS. The other columns for the years 2001 to 2004 are based on Dutch GAAP3. Based on a telephone survey held since 2004. The figures are not directly comparable with prior years.6

17 Rabobank Group

Rabobank Group key CSR figures¹2002 – 2006

1. The first three columns headed 2006, 2005 and 2004 are based on IFRS. The other columns for the years 2001 to 2004 are based on Dutch GAAP2. These data were taken from the 2006 Annual Sustainability Report on the Internet. In some cases, these figures relate to number of group entities only. Moreover, owing to changes in definitions, the

data may differ from those published in previous years. For a proper understanding of developments and results, reference is made to the 2006 Annual Sustainability Report

2006 2005 2004 2004 2003 2002

Personnel data²

Employees:

numbers 56,209 50,988 56,324 56,324 57,055 58,096

FTEs 50,573 45,580 50,216 50,216 50,849 51,867

Females employed 55.6% 56.3% 55.6% 55.6% 55.5% 56.2%

Females in senior positions (> grade 7) 19.9% 19.0% 17.8% 17.8% 16.7% 15.6%

Absenteeism 3.6% 3.7% 3.8% 3.8% 4.1% 4.7%

Employee satisfaction 87.0% 81.0% 85.0% 85.0% 86.0% 84.3%

WIA influx 0.18% - - - - -

Training investments (EUR mln) 76.9 68.7 69 76.7 79.9 78.8

Training investments (EUR/FTE) 1,518 1,509 1,374 1,527 1,571 1,521

Products and services specifically geared to sustainability (EUR mln)

Rabo Green Bonds (cumulative) 3,130 2,644 1,984 1,984 1,786 1,141

Robeco CDO Green Bonds 30 30 30 30 nvt nvt

Green financing (cumulative) 2,409 2,184 1,814 1,814 1,425 1,100

Green lease (EIA/VAMIL/MIA) number of new

contracts92 36 25 25 10 15

Rabo Innovative Capital Fund (assets invested) 10 4.3 3.4 3.4 1.5 1.5

Robeco Sustainable Equity Fund 105 88 81 81 98 107

Robeco Sustainable Private Equity Fund-of funds 191 122 5.3 5.3 nvt nvt

Non-commercial sustainable activities²

Rabobank Foundation, loans/donations (EUR

mln)15.9 10.1 7.4 7.4 5 5.1

Project Fund, donations (EUR mln) 1.3 1.2 1.6 1.6 2.8 1.8

Operations²

Electricity usage (kWh per FTE) 4,580 4,276 3,352 3,352 3,744 3,139

Share of green electricity 86% 96% 25% 25% 25% 31%

Gas usage (in m³ per m² of gross floor surface) 8.1 8.7 8.1 8.1 10.6 11.4

Paper (kg per FTE) 47.9 50.6 46.5 46.5 48 53

18 Rabobank Group

Investors take CSR into account

SiRi Company Rating Summary (Rabobank Group, January 2006)

19 Rabobank Group

CSR: objectives for 2006 and beyond

� Policy:– Executive Board: include at least one CSR target in the

performance appraisal of the 200 executives (excluding the

executive members employed at local Rabobank) in 2007; more

attention to CSR subsidiaries

– Local Rabobanks: include CSR in their banking policy

– De Lage Landen: start an awareness program and set up a code

of conduct

– Audit Rabobank Group: audit the accounting system and internal

controls for CSR monitoring 2006 within the scope of the audit on

the Annual Sustainability Report 2007

– Control Rabobank Group: integrate CSR monitoring in the

standard planning & control cycle on a quarterly basis and CSR

report in management information to Executive Board

– Legal & Tax Affairs: internal reporting about the extent to which

integral regulations are geared to governance codes

20 Rabobank Group

CSR: 2006 accomplishments and 2007 and beyond objectives� Rabobank:

– Energy supply at 97% from certificated green windmills in the

Netherlands (86% worldwide)

– Climate mortgage

– Credit Card with climate contribution with WWF

– Issue of EUR 800 mln green bonds

– Implementation of credit monitoring (in process)

– Issue list of 30 industry sectors

� Robeco:– Clean Tech Fund

– Sustainable asset management (SAM) acquisition

� De Lage Landen:– Formulate and implement a CSR acceptance policy for vendors