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MSc thesis defence Joël Schotanus: The Integration of the EU Taxonomy by Financial Institutions

Published on
September 22, 2022

Dear colleagues, You are hereby cordially invited to the MSc thesis presentation by Joël Schotanus on ‘The Integration of the EU Taxonomy by Financial Institutions – A Single Case Study at the ABN AMRO’.

Supervisor: Dr Robbert Biesbroek
Examinor: Prof. Dr. Katrien Termeer
Date: 22.9.2022
Time: 15.30 hours CET
Room: V0072, Leeuwenborch

Abstract
With the establishment of the EU Taxonomy the European Union Commission aims to direct capital to more sustainable investments and prevent greenwashing. The Commission tasked stakeholders from civil society, academia, businesses, and the finance sector to draw up a universal and overarching classification tool, based on the objectives of the Paris Agreement. The tool analyses to what extent economic and financial activities are in line with the Paris Agreement. Because the Taxonomy is a new and complex regulation, organizations have to construct new departments and find new employees. Furthermore, there is a lack of academic knowledge on how organizations precisely implement EU regulations from an inside perspective. Therefore, this studies aim was to learn how financial institutions in the Netherlands go about making their operating and reporting procedures Taxonomy compliant.

To answer this research question, an explorative case study has been conducted at the ABN AMRO bank. For the study the institutional Three Pillar framework of Scott (2015) is applied to understand organizational compliance behaviour using three perspectives; the regulative, normative and cultural-cognitive pillar. The data is collected by conducting interviews with employees who are responsible for the implementation of the Taxonomy in combination with (internal and external) document analysis and observations. The results of the study show that the ABN AMRO has made a tremendous effort to integrate the Taxonomy. The bank argues that the Taxonomy is in line with their own objectives because as a bank they want to take responsibility for a more sustainable (economic) environment for their stakeholders such as their customers, employees and investors. They argue that the Taxonomy is necessary because this way it is possible to have a uniform tool instead of numerous different certificates, covenants and other agreements. Therefore, the ABN AMRO wants to play their part in facilitating ‘brown’ economic activities into more ‘green’ activities. Although the bank has to follow strict rules and deadlines in some cases, the bank is primarily normatively motivated to comply.

The results naturally produced some recommendations. It would be valuable for the bank if they would use an external organization to discuss a long-term vision specifically focused on the role of the Taxonomy for the ABN AMRO the coming 5-10 years. Furthermore, it is recommended to make use of an audit firm to audit their Taxonomy alignment to make their reports hold more weight.

Lastly, this study gave insight on the implementation process of EU regulations from the inside. For further research it is suggest further focus on the implementation from the inside. One of the suggestions is to conduct a similar study but instead of a regulation which introduces a tool, a more regulative law is suggested. In this case the application of the Three Pillar framework of Scott (2015) could provide new theoretical insight.