Ploumen: voluntary agreement on sustainable banking within two years

Foreign trade and development cooperation minister Lilianne Ploumen wants to see a voluntary agreement on corporate social responsibility within two years in the Dutch banking sector. She expressed this wish on being presented today with the fifth and latest edition of the Fair Bank Guide.

The voluntary agreement should cover issues like transparency and sustainable investment. The minister considers this important because banks set the tone for other economic sectors. Ms Ploumen commented ‘Whether you’re a clothing company or an entrepreneur in the food industry, you depend on banks for investment and loans. When banks practise corporate social responsibility, it automatically impacts on other sectors. That’s why it’s so important to press ahead with this voluntary agreement.’

For several months, Ms Ploumen has been consulting with Dutch financial institutions about an agreement. ‘Banks are keen to make their investments and lending more sustainable and transparent. We noticed this, for instance, when we organised a dialogue with banks and other stakeholders about land rights in developing countries. But it’s actually quite complicated for them to put corporate social responsibility into practice. The government has a great deal of knowledge and experience that banks could benefit from.’

Ms Ploumen also regards the Fair Bank Guide as a useful tool for banks looking to embrace corporate social responsibility. She said ‘The Fair Bank Guide has put this subject on the map, not only with the banks but also with consumers. And the practical guidelines it provides on sustainable financial policy are extremely useful for banks.’

Corporate social responsibility is one of the priorities of Ms Ploumen’s aid and trade agenda. She recently commissioned an independent Sector Risk Analysis to find out which of 86 Dutch economic sectors have a heightened risk of socially irresponsible practices in their production chains. The researchers considered the likely risk of a range of unacceptable activities, including child labour, land grabbing and poor working conditions. The study revealed 13 sectors in which the risks are greatest: foodstuffs, oil/gas, metal, textiles and garments, wood and paper, chemicals, agriculture and horticulture, electronics, building, energy, financial, wholesale and retail. Based on the Sector Risk Analysis, the minister will engage in a dialogue with these 13 sectors and other stakeholders in order to set up voluntary agreements on corporate social responsibility.

The Fair Bank Guide is an initiative by Oxfam Novib, Amnesty International, the trade union federation FNV, Friends of the Earth Netherlands, PAX and the Society for the Protection of Animals. The Fair Banking website allows consumers to compare the investment policies of Dutch banks in such areas as human rights, the environment and arms trading. According to the organisation, the Fair Bank Guide has in the last five years led to a total of 165 measurable improvements in the investment policy of various Dutch banks. In the near future, the initiative will be extended to a number of other countries, including Indonesia, Brazil, Japan, Sweden, France and Belgium.