How to evaluate a bank’s corporate social responsibility
Corporate social responsibility, or CSR, is one of the jargon words that gets thrown around a lot in business theory and the business news media. It is a broad term, and open to interpretation, but some companies and institutions take it to heart more than others. If you regularly see certain companies and industries in the headlines for unethical business practices and various scandals–slave labour, strong-arming indigenous groups, pollution, fraud, insider trading–it is likely a safe bet that they don’t feel any sense of corporate social responsibility.
When it comes to choosing a bank, an increasing number of customers are looking to make savings and investment decisions based on their financial institution’s commitment and, importantly, demonstrable action in the realm of corporate social responsibility. Below are some ways you can evaluate a bank’s CSR.
Keep the fundamentals of sustainable banking in mind when evaluating CSR statements
Most large companies, including banks, publish corporate social responsibility statements, either as stand-alone documents on their websites, or as part of their annual general statements. When you are reading through a bank’s CSR commitments, closely examine their policies and initiatives with respect to social equity, their commitment to ‘do no harm’, economic justice, and how transparent they are about their holdings, investments and major deals.
Look at their major holdings
Sites like Holdings Channel are good resources to use when doing your due diligence on a bank. They list out all of the major holdings of a given company, allowing you to see where a bank has put its money. Many large banks have a substantial amount of money invested in fossil fuel, mining, military contractors, and other industries and companies that are well-known for violating many if not all the principles of CSR.
Compare your bank against the leaders
In 2019, for example, BNP Paribas was named the world’s “best bank” for corporate social responsibility by Euromoney. This title was based on the analysis of a number of factors, including a commitment to things like the United Nations’ Sustainable Development Goals and support for diversity, inclusion and social justice.
Using the best as the benchmark, look at how the banks you are evaluating stack up. Are they working towards similar goals with some of the same measures and initiatives in place? Or do they appear to be purely profit-driven, with very little interest in their impact on the world around them?
Speak to your account manager about it
If you are meeting with various bank representatives–customer service agents, investment advisors, account managers–while shopping around for banks, ask the bank’s personnel probing questions about their CSR. Usually, if a company or institution is sincerely committed to corporate social responsibility, it will be one of their core values and integrated into employee training and internal communication. They will go out of their way to stress these values and advertise these initiatives to employees.
If the employee you are dealing with can’t tell you anything about their employer’s CSR, or was unaware there even was a corporate social responsibility statement or policy, it is likely that CSR is not very high on that bank’s list of priorities.
Conclusion
Every major modern business and institution has a CSR statement and is capable of paying lip service to CSR tenets, but it takes some digging around and often pointed questions to get an idea of what they are actually doing. Assessing your bank’s CSR before doing business with them is part of being a responsible consumer and investor. Keep the above tips in mind and find out whether you and your bank are on the same page philosophically.