How Rabobank is working with commodity traders to build transparent supply chains for a net-zero future
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Case Study | Rabobank
To take data-led, science-based climate action, Rabobank needs high-quality carbon accounting for its financed emissions. Through CarbonChain’s platform, Rabobank collects Scope 3 carbon data for its commodity trade finance portfolio, supporting its clients to address climate risk and build transparent, low-carbon supply chains.
Banks have the power to catalyze action on climate change. We’re harnessing this potential by quantifying our commodity trade finance emissions, to strengthen our climate strategy, and help our clients understand and tackle their Scope 3 carbon risk.
Frank van Oordt
Global Head Trade Commodity Finance, Energy & Metals, Rabobank
The Client: Rabobank
Rabobank is a cooperative bank. There are almost ninety local Rabobanks in the Netherlands, which each operate with a high degree of independence so they can better serve their customers and local communities. Rabobank also has sizeable international banking operations. The Trade and Commodity Finance business unit combines Rabobank’s long-term expertise in agricultural commodities, energy and metals finance.
The Challenge: UNCOVERING CARBON HOTSPOTS IN COMPLEX SUPPLY CHAINS
To meet the urgency of the climate challenge, Rabobank is committed to taking action on its financed emissions and carbon risks. Since 2020, Rabobank has been working with clients to address the high-emitting supply chains in its commodity trade finance portfolio. For example, Rabobank implemented a pilot scheme offering metal commodity traders incentives for meeting sustainability targets, and a template for clients to develop a climate action plan to decarbonize their trade flows. In order to strengthen its green finance schemes and set quantified targets with measurable progress, Rabobank needed to address a major barrier: the lack of high-quality emissions data for clients’ supply chains.
Rabobank recognized that through collaboration with traders and by using CarbonChain’s carbon accounting software, they could accelerate action towards three key goals:
- Setting emissions reduction targets, including Scope 3 (supply chains)
- Advising clients on carbon risk reduction
- Reducing the carbon footprint of Rabobank’s trade commodity finance portfolio
The Process MEASURING, TRACKING AND BENCHMARKING
Using CarbonChain’s carbon accounting platform, Rabobank is running a pilot for carbon intensity supply chain data collection. CarbonChain’s platform is linked with the Rabo Trace portal (Rabobank’s infrastructure to connect information such as carbon data to its financed trade flows). As part of this integration, Rabobank’s clients can easily extract and share raw data.
CarbonChain’s AI-powered technology then quickly and automatically calculates each trade’s overall carbon footprint and carbon intensity, across the entire supply chain, alongside granular breakdowns. This allows both financier and trader to identify key carbon hotspots and opportunities for emissions reductions, via the platform and through downloadable reports.
CarbonChain calculated the emissions of a sample of the copper and aluminum trades of one of Rabobank’s key trade finance clients, Concord Resources Limited, producing a comprehensive carbon footprint and intensity report, with actionable insights. For example:
- To help inform green sourcing strategies, CarbonChain rates suppliers, assets, and trades according to their carbon performance, enabling KPI-setting and progress tracking.
- CarbonChain reveals the alignment of vessels in a trade against the Sea Cargo Charter (the global standard for assessing the climate impact of chartering activities).
- CarbonChain benchmarks the performance of key activities and assets against industry averages, which uncovers potential emissions reduction opportunities at key stages in the supply chain.
For Rabobank, it was important for their carbon accounting to align with global carbon reporting standards such as the GHG Protocol and CDP disclosure. CarbonChain provides Rabobank and its trading clients with the accuracy, completeness and itemization required to follow these frameworks, through granular, auditable, asset-level emissions tracking.
The Results: TOWARDS LOWER-CARBON, TRANSPARENT SUPPLY CHAINS
Rabobank is committed to accelerating the transition to low-carbon commodity trading. CarbonChain helps us align with global sustainability and reporting standards and work with our clients to de-risk and decarbonize high-polluting supply chains.
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Richard Piechocki
Head Sustainability Trade & Commodity Finance (TCF) Global, Rabobank
CarbonChain provided four key benefits for Rabobank:
Data for the net-zero transition
As Rabobank onboards more traders to its pilot, the bank is uncovering carbon hotspots across the entire supply chain of financed trades. This provides insights to understand risk, manage emissions, advise on climate plans, and develop innovative green finance strategies to catalyze action among traders and suppliers.
Client support
With shared visibility and clarity on the carbon performance of trades, Rabobank and their clients can collaborate on KPIs and emissions reductions.
As more trading clients join Rabobank's pilot, the wealth of data will help them explore how to work with clients on target-setting and how to follow the recommendations of the Science Based Targets initiative (SBTi) Net-Zero Standard.
Low-cost solution
CarbonChain’s platform integrates smoothly into Rabobank's workflow and systems, and comes with low overheads due to the cloud-based software, providing automated, fast emissions calculations.
Journey to leadership
Rabobank is demonstrating transparency and commitment to decarbonization, as well as preparing for legislative, reputational and financial risks in the net-zero transition. This brings a range of potential reputational benefits and opportunities for ESG leadership recognition.
The importance of resilient and transparent supply chains is clear. CarbonChain’s platform lets us, together with our trade finance provider - Rabobank - tame the complexity of supply chain emissions, prepare for ESG regulation, and mitigate carbon risks early.
Vikram Rajvanshy
Treasurer, Concord Resources Limited