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| Since arriving on the scene, the idea of sustainability has been attacked by sceptics and critics who seek to expose its weak spots and contradictions. In the following pages you’ll see how ABN AMRO REAL’s senior management respond to some of these accusations. The questions put to them were taken from local and international media sources, and randomly distributed amongst the executives taking part. |
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Fabio Barbosa
Fabio C. Barbosa is Chairman and CEO of ABN
AMRO REAL, and believes it is possible to succeed
by doing the right things the right way. |
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1) Will interdependence among countries over the environment, the supply of petroleum and its by-products and the international financial system improve or worsen conditions for dialogue between governments? Will the evidence of this interdependence lead to peace or more conflicts?
Fabio Barbosa – Since this involves predicting the future, it’s difficult to give a clear answer to this question. However, the world definitively changed after the September 11, 2001 attack in New York. Problems like poverty and the dictatorial regimes in Afghanistan and Iraq, that had seemed remote from civilised nations, suddenly became a hot topic for governments and large corporations, as well as middle class homes in rich countries.
Even if in many cases it was only through television, people understood that problems in far off countries could affect all of us. So interdependence is here to stay. There are huge benefits and major challenges. The treaty that opened the way for the integration of nations in the European Union has just celebrated its 50th anniversary. Strong economic results, the reinvention of Europe in terms of ongoing technology and innovations and the buying power of the Euro in relation to the US dollar are excellent examples of the benefits of this interdependence. Shorter distances, due primarily to the possibilities of air travel and the internet, allow things like distance surgery to save lives and terrorist networks like Al-Qaeda to get their message across. With interdependence mankind has a unique chance to join forces and strive to promote an era of peace and development. The possibilities have been shown, and there are many ways to improve the human condition, but one thing is certain: we cannot stand by with our arms folded. It is up to each us to do our share and play our role in this new environment.
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| 2) Journalist Clive Crook, formerly of The Economist, in his January 2005 article “The Good Company”, claims that corporate social responsibility is “nail polish on the claws of capitalism”. Most companies treat sustainability superficially, like using cosmetics: putting them on every morning, showing them off during the day and then removing them at night. How do you view this issue? |
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| Fabio Barbosa – Due to considerable demands from society, companies are being forced to find a business model that looks at the way profit is being made, and not just whether profit has increased or decreased. Environmental disasters, use of slave labour and economic abuse are variables that consumers no longer accept. Out of conviction or convenience, CEOs are now speaking out more on the issue, although certainly a great many companies are just doing this superficially. However, it’s more than just a marketing ploy or smoke and mirrors. I believe it’s happening because we are at the beginning of a journey. This is something very new. We have no reference points about how to do it and where to begin. Unfortunately, the learning curve becomes more pronounced and the pressure tends to increase, although this makes me see the glass as being half full. Every day there is more and more news about companies managing to increase their profitability and productivity, thanks to corporate responsibility or, as we prefer to call it, sustainability. Sustainability is becoming a focal point for corporate leaders, customers are asking for it and society is rewarding the companies that adapt it. Of course there is still plenty to be done, but we’ve been shown the way, and more and more companies are willing to head in the same direction by learning and changing. |
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3) Staying with the questions that Clive Crook raised: does sustainability divert attention from the company’s deeper fundamental ethical issues, in particular those related to banks, like money laundering?
Fabio Barbosa – In my opinion this journalist has been looking at sustainability through a different lens from the one we are using. I respect his point of view but our experience proves exactly the opposite. Sustainability has been a marvellous tool to address these fundamental ethical issues. To the extent we continue inserting sustainability into our different business areas we have noticed that our focus on a different business model has raised other questions, such as treating customers with respect, transparency in our operations, an open dialogue about the Bank’s profitability and the importance of charging fair fees. The example given, money laundering, is also one of our concerns, much more so today than ever before. We check the origin of the money, and any suspect transactions are identified and closely monitored. If a bank is lax with respect to money laundering, it’s an incentive to criminal elements, and this will unsettle the business of the entire country in the medium term. This type of environment scares investors off, hobbles the economy of the country and affects our bank’s business. From the point of view of a law abiding company, supporting or turning a blind eye to criminality makes no sense. I’d like to mention another example of this fundamental ethics question. When we began thinking about what a sustainable business model would be like and how it would operate, here is an issue we had to confront: does the Bank share responsibility if it lends money to companies that use it to practice deforestation? We came to the conclusion that the way in which the funds we lend are used is also our responsibility. So we began conducting socio-environmental risk analyses of companies before giving them any loans. In a few cases we terminated our relationship with companies, while in others we were rewarded by gaining new business. Sustainability doesn’t divert attention away from fundamental ethical issues. Much the opposite: it attracts. |
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Mankind has a unique chance to join forces and strive to promote an era of peace and development. |
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