Citizen act memo_dd_va

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MEMO – SUSTAINABLE DEVELOPMENT AND CSR

CITIZEN ACT – season 2011-2012

Developed and written by CCMP (Centrale de Cas et de Médias Pédagogiques) and Olivier DELBARD, Professor of social sciences at ESCP Europe

SOCIETE GENERALECITIZEN ACT

CCMP AND OLIVIER DELBARD, PROFESSOR OF SOCIAL SCIENCES AT ESCP EUROPE

TABLE OF CONTENT

INTRODUCTION

I.SUSTAINABILITY, CSR AND THE BANKING INDUSTRY

II.SUSTAINABILITY AND CSR AT SOCIÉTÉ GÉNÉRALE


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INTRODUCTION

The concept of sustainable development which appeared with the 1987 Brundtland Report “Our Common Future” commissioned by the United Nations has been gradually endorsed by the business community over the last decade. The transposition of sustainability issues into the corporate sphere is called CSR, i.e. corporate social responsibility (“social” covering both the environment and society, see E.U. definition of CSR).

The firm’s commitment to CSR rests on two key aspects: integrating social and environmental concerns into the activity and operations on the one hand, and setting up a multi-stakeholder Policy on the other.

The integration of social and environmental concerns is to be carried out with a view to maintaining an adequate balance with the economic objectives that are central to the company’s mission and purpose. The aim is thus to reach an optimum among the three main dimensions of sustainable development.


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This objective implies a “triple bottom line” approach, i.e. optimising the social and environmental performance along with the traditional economic and financial balance sheet. The aim is thus for the firm to be accountable to its stakeholders, not only regarding its financial standing, but also its social and environmental results.

This entails setting up a dedicated internal organisation as well as a social and environmental reporting system, which means adequate measurement and performance indicators that are fully integrated into the company’s daily routine.

This triple bottom line approach would not make sense without a renewed approach to relations with both internal and external stakeholders. Indeed, companies will learn how to integrate these environmental and social concerns - which traditionally are “externalities” - by favouring discussion, dialogue and a partnership logic. New categories of stakeholders then play an important part: for instance, suppliers and subcontractors (supply chain integration), or NGOs (Non-Governmental Organizations) as well as local populations (key role of civil society in these issues).


INTRODUCTION

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Furthermore, the concept of CSR implies that companies take on new responsibilities, extending beyond their legal scope. While largely based on compliance with legislation and professional rules, any sustainability policy may be defined by all the actions and initiatives taken on a voluntary basis beyond legal obligations.

Companies must adopt proactive policies, by devising their own sustainability strategies. Some key success factors may then be identified:

- A good understanding of the issues at stake,

- The impulse and back up of top management,

- A clear (internal and external) communication policy,

- And more generally speaking the ability for the company to look into the future, to rethink its business model, in the face of increasingly pressing social and environmental challenges.


INTRODUCTION

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Each sector of activity obviously has its own peculiarities that need to be taken into account in any CSR approach. The banking industry has experienced rather difficult times lately, due to the financial crisis. Under pressure from a rather negative public opinion, it needs to respond urgently and demonstrate its ability to act responsibly towards society and the environment. Even though its direct impacts on the environment are mostly indirect, the industry could play a major role in responding to ecological issues and the risks related, as a key financial intermediary in the economy.

From the point of view of society, banks are social actors by definition, dealing with the population as a whole, in highly diverse territories and cultures if one considers major international banks. Banks are first-rank employers, who bear responsibility to their employees.

I. SUSTAINABILITY, CSR AND THE BANKING INDUSTRY


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Lastly, needless to say how important ethics, transparency and compliance are in the banking business. Whereas transparency is a more general issue, one needs to clearly distinguish between ethics and compliance.

Ethics refers not only to the values put forth by the company, but also to the necessary convergence between these collective values and the personal ethics of each individual in the choice and decision making process. Compliance covers all the rules and principles guiding and regulating corporate practices. Thus, banks follow a compliance code which is reminiscent of regulation, with its procedures and practices in relation with the governing values of the profession.

All the issues mentioned above are connected to so-called ESG (environmental, social and governance) risks. ESG risks are in no way distinct from other types of risks. They contribute to those risks traditionally identified and monitored by banking establishments, which may be linked to legal and technical questions, or of course to image and reputation.



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Some priorities obviously come first in terms of sustainability and CSR for banks:

- Acting as a responsible player in the whole range of activities,

- Developing a socially and environmentally innovative product offer,

- Implementing a sustainable and responsible Human resources policy,

- Endorsing one’s share of responsibility locally, by partnering with local actors,

- Communicating one’s actions in a consistent and transparent way,

- Keeping in touch with the evolution of society while maintaining a stable and sustainable growth,

- Reducing one’s environmental footprint.



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For Société Générale, social responsibility rests on five core principles, namely permanent quality control, robust governance, risk management, comprehensive compliance and a culture of innovation.

The bank also believes in the compatibility between value creation and the integration of social and environmental concerns. The aim is to align the latter with general strategy as best as possible, by taking into account the cultural, geographical and economic specificities of each area. The approach is thus both reactive (managing risks) and proactive (creating business opportunities).

In 2010 Société Générale set up a strategic plan, Ambition SG 2015, whose purpose is to reinforce the attractiveness of the company by integrating sustainability-related issues among other priorities.

First, the «”employee” dimension puts the emphasis on values, personal fulfilment, calling for the emergence of a common culture that would be more “balanced” and less ” result-driven”. The group aims at becoming an employer of choice among all of its stakeholders.

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Regarding the “image and communication” dimension, Société Générale wishes to show its commitment to “citizenship” (Foundation, sponsoring), by redesigning its internal (through more interactivity) and external (through enhanced coherence and visibility) communication.

On a more concrete level, Société Générale is committed to a human resources and training policy based on diversity and social responsibility. Concerning commercial practices, the bank’s offer is growing, be it in terms of sustainability loans, solidarity-based savings products, SRI (socially responsible investment) investment funds, green financing or project-financing risk management rules (Equator Principles).

The bank is also involved in the local communities, in France as well as in many other areas (Africa for instance). It contributes to finding solutions to eradicate poverty, by developing microfinance activities for instance. To conclude, its overall wish is that a culture of cooperation and search for collective interest prevails within the organisation, which is definitely one of the fundamental dimensions of sustainable development.

II. SUSTAINABILITY AND CSR AT SOCIÉTÉ GÉNÉRALE


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Citizen act memo_dd_va

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social concerns

integration of social

csr citizen act season

social actors

csr approach

definition of csr

concept of csr

environmental concerns