Simon Hill is CEO and founder at idea management firm, Wazoku
CSR and SDGs are major priorities for many banks. Wazoku’s Simon Hill looks at how best to approach achieving these goals.
Corporate Social Responsibility (CSR) has been a significant focus for banks and other Financial Services (FS) providers for several years now. The last time that CSR investment was assessed in 2015, the consulting firm EPG revealed that UK & US Global Fortune 500 companies spend $15.2bn a year on CSR activities.
Banks were amongst the biggest spenders in that figure. Since the global credit crisis of 2008 / 2009, they have faced increased regulation to ensure they conduct business in the right way, and also far greater public scrutiny, so the industry has sought to demonstrate that it cares about the wider world and not just profits and the bottom line.
This has been exacerbated by the United Nations (UN) and its 2030 Agenda for Sustainable Development, a ‘global blueprint for dignity, peace and prosperity for people and the planet, now and in the future’. As part of this, the UN announced 17 different but interconnected Sustainable Development Goals (SDGs), adopted by 193 UN member states and all designed to drive change in their respective areas.
It is the responsibility of both the private and public sector in the 193-member states to make each SDG happen, and banks are under pressure to play their part in this. How can banks deliver on UN SDGs while also maintaining their CSR objectives?
The importance of UN SDGs
Introduced in 2015, the UN SDGs are seen as the blueprint to achieve a better and more sustainable future for all and are becoming a major focus in FS as banks look to address challenges relating to poverty, inequality, environmental degradation and much more. Every single initiative counts and every new idea to help solve these issues is valuable. For example, the UN has suggested that if everyone switched to energy efficient lightbulbs, the world would save USD $120 billion, while in 2018, Copenhagen Fintech embarked on a program with non-profit organisation CARE to seek start-ups with ideas in providing loans and cash for the unbanked in Asia and Africa.
At the same time, it has grown ever more important for banks to demonstrate good CSR. Doing good in and of itself is no bad thing of course, but banks do have other motivations. With millennials such a large and important customer group in FS, recent research by Cone Communications revealed that more than 9 in 10 millennials would switch brands to one associated with a cause and also that 87% of millennials would be more loyal to a company that helps them contribute to social and environmental issues.
Demonstrating strong and tangible CSR is therefore important in banking for a whole range of reasons. Tying CSR in with UN SDGs is surely the ultimate goal – but how best to approach it? A simple way to build sustainable initiatives in a bank is to start from CSR and use it as an opportunity to think more globally about societal issues.
A need for innovative thinking and sustainable innovation
For any bank serous about UN SDGs, it should review what has been done before with CSR and look for opportunities to align that with SDGs. More broadly, to really deliver on such important and significant goals, it requires a more inclusive approach involving a range of communities and stakeholders, and the capture, evaluation and implementation of ideas from within a bank. Furthermore, such activity should begin to be woven into the core of what that bank does and is aiming to achieve.
CEOs in FS often talk about ‘innovation’ and the need to be ‘more innovative’ but don’t have a true idea of what that entails and what they really want. To be innovative is vital for both CSR and UN SDGs, but it requires a different culture, different mindset, new objectives and a long-term plan for achievement and measuring success.
Innovation in relation to SDGs cannot be a side-project or something that exists in silo from the rest of the business, otherwise it is doomed to fail in terms of delivering any meaningful change.This is a good starting approach:
A broader ecosystem of stakeholders – anyone can think of an idea that would help improve CSR and address a specific SDG and there should be no limits to creative thinking.Banks should involve employees, partners, customers and other groups as they seek to generate ideas to achieve SDGs. At the same time, SDGs should be tied into innovation programs across these groups.
A culture that encourages innovation – ideas must be discussed, developed and filtered so senior banking staff can focus on the innovations that will really have an impact on SDGs. This means developing a culture of innovation, a long-term approach of collaboration and encouraging diversity of opinion. Those involved must feel trusted and have the time and energy required to innovate, while ideas must be assessed in a way that reflects whatever SDGs the business is championing.
Leadership and environment – the next element to deliver on SDGs is the right environment, which involves strong and committed leadership. Senior figures within the bank must set the tone and make it clear they are willing to take risks and learn from failure. More transparency and collaboration from the off, in terms of what is trying to be achieved with SDGs is vital.The setting of goals is also important. When the overarching objectives are as grand and important as SDGs, incremental goals along the way keep people focused and motivated whilst progress can be tracked.
By aligning CSR with SDGs, a bank can contribute to something that really matters, positioning itself as a sustainable business that cares about the wider world in the process.This all requires a smarter approach to sustainable innovation, going beyond socially responsible one-off initiatives and challenging those in the bank’s ecosystem to think about CSR and SDGs in their everyday lives, fully embedded into the bank’s overall goals.