KBC is more than a financial institution. The bank-insurer wants to make a difference to the sustainable development of society. ‘That begins with transparent communication on how we approach social and sustainability themes’, Vic Van de Moortel, General Manager Corporate Sustainability at KBC Group, explains.

‘Transparency looks easy, but it isn’t’, says Vic Van de Moortel, head of KBC Group’s Sustainability department since 2015. ‘Policies on controversial sectors such as the arms industry existed in the past too, but we rarely communicated about them. Nowadays, we go so far as to publish the blacklist of companies with which we refuse to do business. It’s a matter of credibility. And we shouldn’t pretend to be better than we are, either, as that can boomerang on you.’

Van de Moortel argues that sustainability has to be integrated in the business. ‘At lots of companies – including KBC in the past – sustainability is part of the communications department, which means you’re doing little more than PR. We don’t use the term ‘corporate social responsibility’ (CSR) any more, either. That’s the Anglo-American model where you give a chunk of money to a charity and that’s it. If sustainability isn’t an integral part of your business, you’re simply keeping up appearances. And I don’t want to be a Hyacinth.’

‘I didn’t know all the terminology when I became head of the department, but we had been doing it for a long time already. Take responsible behaviour. There’s no point drawing up a book full of new guidelines: it’s all about concentric circles. Compliance is the bare minimum. And our sustainability strategy is cut and dried, too. But then you have less definable matters. How do you balance the interests of all the stakeholders? The company, society, clients, etc.? An example would be that it’s perfectly possibly to comply with Europe’s MiFID II guidelines and still sell an 85-year-old widow a highly dynamic investment fund. But that’s totally wrong.’

‘In practice, you need a central point: a department that oversees the strategy, that updates the guidelines. What’s more, it isn’t clear in every case what is and isn’t permissible, or on what terms. Around 300 individual cases end up at my department every year. The business impact of a sustainable choice can be pretty substantial. Some cases are taken all the way up to board level. But we try to monitor and track sustainability at KBC using a dashboard comprising 38 parameters. It’s an instrument that shows straight away that we are not engaged in greenwashing.’

Things that are acceptable today might not be so tomorrow. Twenty years ago, it didn’t raise too many eyebrows if someone travelled to Luxembourg to collect their dividends. Nowadays, quite rightly, that’s not on any more. The financial crisis of 2008 made it possible to take sustainability more seriously. It didn’t bring a complete break with the past, but it continues to make its mark, even ten years on.’

‘The financial crisis was an eye-opener’, Van de Moortel continues. ‘Since then, the sustainability policy has been fully integrated within our business strategy. We ensure in this way that our sustainability principles feed through into every activity and layer of our organisation. In all three of our core operations – banking, insurance and asset management – and in all the countries in which we are active. It’s the only way we can increase our positive impact on society through our day-to-day operations.’

According to Van de Moortel, KBC constantly pursues the right balance between business objectives and sustainability ambitions ‘That’s mainly a question of the environment, human rights, business values and socially sensitive themes. Some of those guiding principles are new, while some have been tightened up and revised in recent years to bring them closer into line with society’s shifting expectations.’

Van de Moortel provides a few examples. ‘Our energy policy specifies that we don’t fund any coal-related operations. We have made the conditions for arms-related activities even more stringent. And we impose tight restrictions on companies that operate in countries with controversial regimes or which might be violating human rights.’

‘We’ve developed a sustainability strategy based on three cornerstones to enable us to meet our stakeholders’ expectations, now and in the future. Increase our positive impact on society, limit any negative impact, and encourage responsible behaviour at every level of the organisation, not just in the executive suite’, Van de Moortel explains

‘Responsible behaviour, underpinned by integrity and a sound awareness of risk, forms the long-time basis of our sustainability approach. Only then can we advise and guide our clients appropriately. To enhance our positive impact on society, we offer financial solutions in a number of areas that respond to society’s concrete needs. We focus in this regard on areas in which we can make a difference: environmental awareness, financial literacy, entrepreneurship and demographic ageing.’

‘We’re ratcheting up our investment in renewable energy, for instance, while KBC Bicycle Leasing offers a solution for the mobility issue. Another example is the development of “Light as a Service” as part of the circular economy’, Van de Moortel says. ‘There are two dimensions to financial literacy. On the one hand, our communication is clear and transparent, so that clients always know what they’re signing up to. While on the other, we’re fulfilling our responsibility by raising basic knowledge of financial products. Through our “Get-a-Teacher” project, we bring KBC staff into the classroom, without – and this is very important – any commercial motivation.’

KBC is also focusing on the ageing population. ‘Elderly people find digitalisation more challenging than digital natives do. Without digital literacy, people are going to find it hard to keep functioning in our society. To address that, we’ve created a programme to guide older people. One Tuesday each month, clients can learn how to work on their smartphones by following a series of modules, so that they will eventually be able to use the KBC apps too. We are also fulfilling our social role of stimulating digitalisation. And yes, we also benefit if we can steer people from analog to digital. Whether it means selling more products, I don’t know. It certainly makes our internal processes more efficient, so there’s a commercial element in that sense.’

Van de Moortel is exceptionally proud, lastly, of the prioneering work done by Start-it@KBC – one of our country’s most important accelerators for start-ups, which KBC helped to create. ‘It’s one way in which we stimulate entrepreneurship. We’re also going to focus in the years ahead on innovation within large enterprises, while putting the emphasis on gender diversity. The start-ups taking part in the programme don’t necessarily bank or insure themselves with KBC: Start-it@KBC is an open platform. It goes without saying that as a financial business KBC can only flourish if it operates in an economic system that is itself flourishing, and start-ups are a part of that.’

At the same time, KBC is keen to minimise any negative impact its operations might have. ‘One way we do that is to actively offer a broad range of sustainable investment opportunities. And we set a good example ourselves too: our carbon emissions have to be a quarter lower by next year than they were in 2015. We only have a limited impact in that regard as a financial business, but it’s still an important symbol that we want to reduce our own footprint too.’