Money-Maker or World Saviour? - DiVA-Portal

Money-Maker or World Saviour? – Compromising Logics to Manage Sustainability in Banking

Master’s Thesis 30 credits Department of Business Studies Uppsala University Spring Semester of 2019

Date of Submission: 2019-05-29

Annelie André Molly Larson Supervisor: Jaan Grünberg

Acknowledgements First and foremost, we would like to thank Nordea and all the respondents for taking the time

to participate in our study. Your contribution is truly appreciated and your insights made it

possible to fulfill the purpose of this thesis. We would also like to thank our seminar group for

giving us constructive feedback throughout the process. Your comments and suggestions have

certainly helped us along the way. Last but not least, we would like to thank our supervisor Jaan

Grünberg for challenging and supporting us during this journey. Your precious help has

contributed with valuable guidance and improved our thesis greatly. For those who will be

reading this thesis, we hope that you will find the thesis and the topic as intriguing as we do.

Uppsala 29th of May 2019

______________________ ______________________

Annelie André Molly Larson

Abstract With the increasing demands of engaging in sustainability, the financial industry’s dominating

market logic is currently being challenged. Banks are therefore experiencing demands to

manage and legitimize sustainability, identified as containing both a market- and social logic,

into a profit driven context. The aim of this study was thus to explore, at a micro level, how

multiple logics of sustainability can be managed and legitimized in an organization where the

dominant logic is being challenged. This was done by conducting a case study where the

primary data was collected through semi-structured interviews with employees from Group

Sustainable Finance (GSF) who are responsible for driving the sustainability agenda at Nordea.

The results demonstrate that sustainability has been managed through a compromising strategy

where elements of both the market- and social logic has been altered to appropriately suit the

context characterized by profit maximization. During the process, an interesting finding

evolved concerning how the micro perspective exposed the existence of conflicts within a single

logic, defined as intra-logic conflicts. The results also contributed to identify stakeholder

triggers as well as how normative-, instrumental-, and value rhetorical strategies are applied to

legitimize Nordea’s sustainability practices.Keywords: Institutional Logics, Multiple Logics, Sustainability, Compromising Strategy,

Micro Perspective, Rhetorical Strategies, Legitimacy, Banking

Table of Content

1. Introduction .................................................................................................. 1 1.1 Background .................................................................................................................. 1 1.2 Problem Statement ........................................................................................................ 2

1.3 Purpose and Research Question .................................................................................... 3

1.4 Thesis Disposition ........................................................................................................ 4

2. Theoretical Framework ................................................................................ 5 2.1 Development of Institutional Theory ............................................................................. 5

2.2 Defining Institutional Logics ........................................................................................ 6

2.3 Multiple Logics in the Institutional Environment .......................................................... 8 2.3.1 Compromising and Combining Logics ................................................................... 8

2.4 Applying Multiple Logics on Sustainability .................................................................. 9

2.5 Sustainability within the Banking Sector ..................................................................... 11

2.6 Institutionalization of Sustainability in Organizations ................................................. 12 2.6.1 Legitimizing Sustainability Practices through Communication ............................. 13

2.7 Theoretical Summary and Model of Analysis.............................................................. 14

3. Method ........................................................................................................ 17 3.1 Research Approach ..................................................................................................... 17

3.2 Research Design ......................................................................................................... 17 3.2.1 Selection of Case and Respondents ...................................................................... 18

3.3 Data Collection ........................................................................................................... 19 3.3.1 Interviews ............................................................................................................ 19

3.3.1.1 Constructing the Interview Guide .................................................................. 21 3.3.2 Secondary Data .................................................................................................... 22

3.4 Data Analysis ............................................................................................................. 23 3.4.1 Thematic Analysis ............................................................................................... 23

3.5 Ethical Considerations ................................................................................................ 25

4. Sustainable Finance at Nordea .................................................................. 26 4.1 Presenting Nordea and Group Sustainable Finance ..................................................... 26

4.2 Nordea’s Perception of Sustainability ......................................................................... 27 4.2.1 Sustainable Finance as a Business Opportunity .................................................... 28

4.3 Maximizing Profit and Saving the World .................................................................... 30 4.3.1 Altering Sustainability to the Banking Sector ....................................................... 30

4.3.2 Combining Profitability with Doing Societal Good .............................................. 32 4.3.3 Prioritizing Different Demands within Sustainable Responsibility ........................ 33

4.4 Nordea’s Journey Towards a Sustainable Future ......................................................... 33 4.4.1 Sustainability in Practice ...................................................................................... 34

4.4.1.1 Sustainable Products ..................................................................................... 36

4.5 Creating Acceptance for Nordea’s Sustainability Practices ......................................... 37 4.5.1 Formalizing Sustainability Practices ..................................................................... 38 4.5.2 Communicating Benefits of Sustainability............................................................ 39 4.5.3 Communicating Good Citizenship ........................................................................ 40

5. Analysis ....................................................................................................... 42 5.1 Perception of Sustainability ........................................................................................ 42

5.2 Managing Multiple Logics .......................................................................................... 44 5.2.1 Compromising Logics of Sustainability................................................................ 44 5.2.2 Combining Logics of Sustainability ..................................................................... 45 5.2.3 Managing Intra-Logic Conflicts ........................................................................... 46

5.3 Sustainability Practices ............................................................................................... 47 5.3.1 Institutionalization of Sustainability Practices ...................................................... 47

5.4 Legitimizing Sustainability ......................................................................................... 48 5.4.1 Normative Rhetoric .............................................................................................. 49 5.4.2 Instrumental Rhetoric ........................................................................................... 50 5.4.3 Value Rhetoric ..................................................................................................... 51

6. Conclusions ................................................................................................. 53 6.1 Limitations and Future Research ................................................................................. 54

7. References ................................................................................................... 55

Appendix ......................................................................................................... 61 Interview Guide ................................................................................................................ 61

1

1. Introduction 1.1 Background Sustainability has become a popular topic in today’s society. The fast consumption of resources

is making consumers more concerned of their own environmental impact as well as the impact

by other actors (Butler, 2018). Governments and media have also enhanced their awareness on

sustainability issues which has contributed to organizations experiencing higher demands

regarding their engagement in environmental and societal concerns (Borglund et al., 2008;

Hunoldt et al., 2018). Among organizations, the idea of sustainability has previously been

associated to organizational initiatives concerning ‘Corporate Social Responsibility’, CSR

(Carroll, 1999; Sheehy, 2015). Lately, however, the idea has developed into a more holistic

perspective involving all actors and their care for creating a sustainable future (Butler, 2018).

The increased global awareness of sustainability issues has therefore made it essential for

organizations to communicate their sustainability engagement in order to be perceived

legitimate (Furusten, 2013; Marais, 2012). By not conforming to the external pressures of

addressing sustainability issues, an organization’s reputation might become damaged which can

jeopardize its chances for future success and survival (Marais, 2012). In the banking sector, the increased demands on sustainability became particularly evident after

the financial crisis in 2008 when a strong wave of criticism was raised towards the banking

sector’s narrow focus on short-term results and lack of corporate responsibility (Borglund et

al., 2008; Jacob, 2012; Lauesen, 2013). Before the crisis, the financial industry’s engagement

in sustainability issues was in the shadow of other industries which were considered to have a

more direct environmental impact (Branco & Rodrigues, 2006; Cai et al., 2012; Thien, 2015).

The banking sector has thus previously received limited attention although banks possess an

influential role in societal and environmental concerns through investing and lending capital to

various industries and infrastructure projects (Kell, 2018; O’Sullivan & O’Dwyer, 2009). As a

result of the increased attention towards sustainability, financial leaders have begun to

recognize that success is not only measured by profits and costs, but rather by also taking

environmental, social and governmental (ESG) aspects into account (Raza, 2018).

Sustainability engagement has thus become increasingly important in the financial industry and

contributed to the establishment of ‘sustainable finance’.

2

1.2 Problem Statement When studying organizations and how they respond to external demands, institutional theory

can provide useful insights. Institutional theory implies that organizations operate in

institutional environments where they need to respond to institutionalized pressures in order to

achieve legitimacy (Butler, 2010; DiMaggio & Powell, 1983; Dowling & Pfeffer, 1975; Meyer

& Rowan, 1977; Suchman, 1995). However, since society is composed of multiple institutional

logics containing different principles for what is considered legitimate behaviour, organizations

can experience and interpret different influences to their practices (Thornton & Ocasio, 2008).

The institutional environment is thus characterized as being dynamic and complex, wherefore

organizations may be exposed to multiple institutional logics of legitimate behavior (Thornton

& Ocasio, 2008; Pache & Santos, 2013).

By applying institutional logics to sustainability, it is possible to acknowledge that there are

different reasons behind organizations’ engagement in sustainability practices. Scholars have

for example described how organizations can approach sustainability as fulfilling their societal

responsibility (Furusten, 2013; Grankvist, 2009; McElhaney, 2009; Wang, 2014). However,

there are also studies which rather emphasize that organizations engage in sustainability

practices due to a strategic approach towards corporate responsibility. Meaning that business

leaders have acknowledged that by integrating sustainability into their business strategy,

organizations perceive themselves becoming more efficient and profitable in the long-run

(McElhaney, 2009; Porter & Kramer, 2011).

The different perceptions behind organizations’ sustainability practices makes it possible to

define two conflicting logics of sustainability. A market logic which considers the involvement

in sustainability as driven by profit maximization, and a social logic which considers that

organizations ought to engage in sustainability practices in order to contribute to the greater

good. These conflicting logics of sustainability can also be related to Windell (2007) and

Bakker et al. (2016) categorization of actors engaging in sustainability; containing the money-

makers who perceive sustainability as a business opportunity and hence correspond with the

market logic, and the world saviours who perceive sustainability as doing social good and thus

conforms with the social logic. Consequently, multiple logics can make it difficult for

organizations to work with sustainability practices since different approaches contributes to a

confusion of what sustainability activities that should be applied, and how these should be

integrated (Høvring, 2017; Windell, 2007). Therefore, it becomes important for organizations

3

to successfully manage multiple and possibly contradicting logics as they function as references

for appropriate and legitimate behaviour (Pache & Santos, 2013; Smets et al., 2012; Thornton

& Ocasio, 2008). For example, Pache and Santos (2013) have suggested that by applying a

compromising- or combining strategy, organizations may overcome challenges and conflicts

that emerge in the managing of multiple logics. Furthermore, as it is essential for organizations

to be considered legitimate by the society in which it operates, scholars have also established

that professionals can use different rhetorical strategies to develop legitimacy for their

sustainability practices (Marais, 2012; Windell, 2007). Normative-, instrumental-, and value

rhetoric can therefore be applied depending on the relevant context and on what type of

legitimacy an organization wishes to develop (Marais, 2012).

Although studies regarding institutional logics have received increased attention within the

academia, the primary focus has been on the field level and thus overlooked the important micro

level origins which arise by individuals’ actions at work (Powell & Colyvas, 2008; Reay &

Hinings, 2009; Smets et al., 2012). In addition, the managing of multiple logics is poorly

understood and studies regarding how organizations respond to the complexity of multiple

logics are thus called for (Greenwood et al., 2010; Lindberg, 2014; Pache & Santos, 2010).

Furthermore, as the financial industry has a long history of focusing on profit maximization,

the context has been dominated by a market logic which has guided its organizing principles as

well as the understanding of what constitutes legitimate values and behaviour (Almandoz, 2014;

Davis, 2009; Thornton & Ocasio, 2008). Therefore, with the increasing demands of engaging

in sustainability, the financial industry is experiencing the challenge to successfully manage

and incorporate sustainability, containing both a market- and social logic, into a market driven

context. As the dominant market logic is being challenged, the banking sector thus appears as

a particular suitable context to study how multiple logics of sustainability can be managed and

legitimized at a micro level.

1.3 Purpose and Research Question The aim of this paper is to examine how multiple logics of sustainability can be managed in the

financial industry which historically has been recognized as being dominated by a market logic.

Moreover, since research within institutional logics has called for further studies exploring the

micro perspective, the study intends to make a theoretical contribution by exploring how an

organization can cope with multiple logics in their work. By conducting a case study, the study

4

also contributes with practical knowledge of how professionals responsible for driving an

organization’s sustainability practices can manage multiple logics and through rhetorical

strategies legitimize their sustainability practices in a context dominated by a market logic. In

view of the above considerations, the study intends to answer the following research question:

- How can multiple logics of sustainability be managed and legitimized in an

organization where the dominant logic is being challenged?

1.4 Thesis Disposition The thesis will be structured as follows. Chapter 2 will present a theoretical framework

highlighting the development of institutional theory, institutional logics, and how multiple

logics relate to sustainability. The theoretical section will also cover the establishment of

sustainability within the banking sector and rhetorical strategies which can be applied to

legitimize sustainability practices. In Chapter 3, the methodological considerations will be

further described, including the selection of case and respondents as well as how data was

collected. Chapter 4 will present the study’s empirical findings which in Chapter 5 will be

analyzed following the thesis’ model of analysis. Lastly, in Chapter 6, the main conclusions

will be presented and discussed together with limitations and suggestions for future research.

5

2. Theoretical Framework

This section begins with an introduction to institutional theory and the development of

institutional logics. Following, a discussion concerning the management of multiple logics

and the notion of sustainability in the banking sector is described. Thereafter, the

institutionalization of sustainability and legitimization of sustainability practices through

communication is presented. Finally, the chapter ends with a theoretical summary and an

illustration of the thesis’ model of analysis.

2.1 Development of Institutional Theory Institutional theory has for several decades been representing a dominant approach when

analyzing the interaction between an organization and its environment (Alvesson & Spicer,

2018; Guth, 2016). The study of institutions began with Selznick’s (1948) empirical research

on organizations and how they become affected by influences in their institutional environment.

In the seventies, Meyer and Rowan (1977) entered the institutional arena and emphasized the

role of modernization when rationalizing rules that are taken for granted by the society and

captured the process of isomorphism. The notion of isomorphism, which is organizations

tendency to become similar to each other, was further developed by DiMaggio and Powell

(1983) who placed it in a setting of organizational fields. DiMaggio and Powell’s (1983)

approach of isomorphism developed into ‘the new institutionalism’ which involved an

emphasis on legitimacy rather than efficiency. The authors thus argued that the success and

survival of an organization was dependent on the society’s perception of organizational

legitimacy. More specifically, by obtaining legitimacy, the organizational behavior is perceived

desirable and appropriate by the society (Dowling & Pfeffer, 1975; Suchman, 1995).

Consequently, although some scholars have criticized institutional theory for being vague and

include over-reach concepts (Alvesson & Spicer, 2018), the theory is considered a valuable

theoretical lens for analyzing how organizations are influenced by, and manage external

expectations from their institutional environment (Gauthier, 2013; Scott & Meyer, 1994).

During the nineties, a new approach to institutional analysis was created and it posited

institutional logics as defining the content and meaning of institutions (Friedland & Alford,

1991; Thornton & Ocasio, 1999). In contrast to previous studies, institutional logics discover

the effects that logics have on individuals and organizations, and thus disregard the notion of

isomorphism. Researchers adopting this approach consider the concept of institutional logics

6

to shape rational and mindful behaviour, while also allowing organizations to shape and change

institutional logics as well (Thornton & Ocasio, 2008). In parallel with the establishment of

institutional logics, another framework which also conceptualizes and explores institutional

dynamics has been developed. Lately, this has made the conversation of institutional theory to

become dominated by two schools of thought, namely institutional logics and institutional work

(Zilber, 2015). Institutional work, which was coined by Lawrence and Suddaby (2006), has a

bottom-up focus and emphasizes how individual action affects an institution or set of

institutions (Lawrence et al., 2011). Therefore, as this study aims to analyze what and how

multiple field level influences may impact organizational practices, institutional work is not the

most equipped framework to use due to its focus on creating, maintaining and disrupting

institutions. Institutional logics, however, remain central within institutional theory and is

applicable in this thesis as it highlights the importance of social context when shaping the

behaviour of social actors (Lindberg, 2014). Previous research has however primarily studied

institutional logics as a field level concept and relatively few studies has taken organizations as

the level of analysis (Lindberg, 2014; Pache & Santos, 2013; Smets et al., 2012; Zilber, 2015).

Important micro level dynamics have therefore been disregarded which in turn has contributed

to a lack of understanding of how logics are perceived and managed (Lindberg, 2014).

2.2 Defining Institutional Logics When Friedland and Alford (1991:248) developed the concept of institutional logics, they

defined it as “a set of material practices and symbolic constructions - which constitutes its

organizing principles and which is available to organizations and individuals to elaborate”.

Institutional logics can therefore be explained as the way social reality is constructed and is

central in shaping the interpretations that people have on their own work, as well as the actions

by others. Following this view, society is considered to be composed of multiple institutional

logics which are available to individuals and organizations as bases for their actions (Lindberg,

2014; Thornton & Ocasio, 2008). As a result, individuals within an organization will have to

consider and manage these different logics in their daily activities. Applying the approach of

institutional logics is therefore fruitful in this thesis when aiming to enhance the understanding

of what guides action, as well as how organizations can manage being influenced by several

different logics.

7

To simplify and make institutional logics more applicable in research, Thornton et al. (2012)

developed seven categories for ideal types of institutional logics. By systematically developing

categories and highlighting the characteristics behind each type, the typology contributes with

a generalizable understanding of institutional context and provides a framework to portray its

otherwise rather complex nature. The seven major types of logic differ in a number of aspects,

such as their sources of legitimacy, the basis of norms, and the control mechanism employed

(Thornton et al., 2012; Scott, 2014). Table 1 represents the typology of institutional logics and

further demonstrates the differences between them. Scott (2014) emphasizes that by

considering how organizations commit to multiple institutional logics, studies can come closer

to the understanding of the dynamics within organizations and organizational fields. However,

it is important to note that this study does not consider the existence of institutional logics as

given, but rather as constructed by researchers and an applicable approach to enrich this thesis’

understanding for how organizations can relate to the phenomenon of sustainability.

Table 1. Ideal Types of Institutional Logics

Categories Family Community Religion State Market Profession Corporation

Root Metaphor

Family as firm

Common boundary

Temple as bank

State as redistribution mechanism

Transaction Profession as relational network

Corporation as hierarchy

Sources of Legitimacy

Unconditional loyalty

Unity of will Belief in trust & reciprocity

Importance of faith & sacredness in economy & society

Democratic participation

Share price Personal expertise

Market position of firm

Sources of Authority

Patriarchal domination

Commitment to community values & ideology

Priesthood charisma

Bureaucratic domination

Shareholder activism

Professional association

Board of directors Top management

Sources of Identity

Family reputation

Emotional connection Ego-satisfaction & reputation

Association with deities

Social & economic class

Faceless Association with quality of craft Personal reputation

Bureaucratic roles

Basis of Norms

Membership in household

Group membership

Membership in congregation

Citizenship in nation

Self-interest

Membership in guild & association

Employment in firm

Basis of Attention

Status in household

Personal investment in group

Relation to supernatural

Status of interest groups

Status in market

Status in profession

Status in hierarchy

Basis of strategy

Increase family honor

Increase status & honor of members & practices

Increase religious symbolism of natural events

Increase community good

Increase efficiency profit

Increase personal reputation

Increase size diversification of firm

Informal Control Mechanisms

Family politics

Visibility of actions

Worship of calling

Backroom of politics

Industry analysts

Celebrity professionals

Organizational culture

Economic System

Family capitalism

Cooperative capitalism

Occidental capitalism

Welfare capitalism

Market capitalism

Personal capitalism

Managerial capitalism

An illustration of Thornton et al. (2012) ideal types of institutional logics.

8

2.3 Multiple Logics in the Institutional Environment Organizations operating in complex and dynamic institutional environments can come across

institutional pluralism (Pache & Santos, 2013; Reay & Hinings, 2009; Thornton et al., 2012).

Kraatz and Block (2008:243) explain institutional pluralism by making the following metaphor,

“if institutions are broadly understood as ‘the rules of the game’ that direct and circumscribe

organizational behaviour, then the organization confronting institutional pluralism plays in two

or more games at the same time”. Organizations that are managing institutional pluralism are

therefore subject for multiple demands coming from more than one logic (ibid).

Although it has been acknowledged that several institutional logics can co-exist within an

institution, the predominant view has been that there is one dominant logic that guides

organizational action (Lindberg, 2014; Scott, 2014). Lately, however, there has been an increase

of studies showing how fields are guided by multiple logics, which has contributed to a quest

for research concerning how organizations experience and practically respond to the complexity

arising from multiple institutional logics (Greenwood et al., 2010; Pache & Santos, 2013). In

current studies of multiple logics, researchers have found both competitive and cooperative

aspects of logics (Goodrick & Reay, 2011; Lounsbury, 2008; Swan et al., 2010). The

multiplicity of logics, as well as the degree to which such logics are incompatible, ultimately

influences an organization’s possibility to practically manage multiple logics (Lindberg, 2014;

Scott, 2014).

2.3.1 Compromising and Combining Logics In the beginning of institutional research, authors suggested that organizations could manage

conflicting logics through decoupling (Meyer & Rowan, 1977). Decoupling involves the

process of separating formal structure from actual organizational practices as a response to

institutional pressures and for legitimacy purposes (Boxenbaum & Jonsson, 2008; Meyer &

Rowan, 1977). However, as more studies have been conducted, the structure of decoupling has

received less attention and new approaches involving compromising or combining multiple

logics have been established to reconcile conflicting demands (Kraatz & Block, 2008; Oliver,

1991). By compromising conflicting demands, organizations can perform practices that are

influenced by multiple logics which elements have been altered in order to create a balance

between the logics (Pache & Santos, 2013). This can for example be enacted as conforming to

the minimum standard of what is expected in each logic, crafting a new behavior that brings

9

elements of the conflicting logics together, or by influencing institutional referents to alter their

demands (ibid). The compromising approach can thus ease an organization’s ability to be

perceived legitimate by different referent groups by incorporating elements of each logic.

Nevertheless, holding an approach to constantly compromise between competing logics can

also cause weaknesses as it does not allow organizations to obtain complete support from its

referent groups since some of their expectations are disregarded. The approach may also be

inapplicable when the multiple logics imply goals or practices that are not compatible with each

other, and thus results in an inability to meet the institutional referents’ expectations (Pache &

Santos, 2010).

By applying an approach of combining conflicting logics, rather than to compromise them, an

organization can try to take advantage of how multiple logics can create opportunities for a

broader range of appropriate behaviour (Greenwood et al., 2010; Reay & Hinings, 2009). This

approach thus contributes to organizations performing a combination of activities that are

drawn from each logic in an attempt to secure support from different referent groups.

Consequently, in contrast to the compromising approach where certain elements of the logics

are incorporated, this approach entails combining the different logics without modifying them

(Pache & Santos, 2013). There are however some limitations to this approach as well. Similar

to the compromising approach, the combination of several logics involves the challenge of

fulfilling competing demands while also being perceived legitimate by the audience (ibid).

Nevertheless, successful attempts of combining logics at an organizational level have the

capacity to influence the organizational field which might contribute to the creation of altered

institutionalized practices (Smets et al., 2012).

2.4 Applying Multiple Logics on Sustainability As emphasized in the introduction to this thesis, the phenomenon of sustainability can be

interpreted and managed differently. Scholars have for example described the reason behind

engaging in sustainability as contributing to social good or performing it based on business

reasons (Grankvist, 2009; McElhaney, 2009; Wang, 2014). Relating the different approaches

on sustainability to the scheme of institutional logics presented in Table 1 by Thornton et al.

(2012), it is possible to apply the view of sustainability as driven by either a state logic of

citizenship and welfare, or from a market logic driven by maximization of shareholder profit.

This interpretation of sustainability is also applicable to Windell (2007) and Bakker et al. (2016)

10

categorization of different actors engaging in sustainability, involving the money-makers and

the world saviours. The money-makers and world saviours have divergent perspectives of the

meaning and implications of sustainability. Actors that can be defined as money-makers are

practicing sustainability driven by its perception of enhancing business opportunities. The

practices are therefore conducted as a response to market demand as well as the opinion that

sustainability contributes to increase profitability; something which can be related to the

characteristics of the market logic. In contrast, the world saviours can be related to the social

logic and involves practicing sustainability to contribute to social good and change the world

for the better. The profitability of engaging in sustainability practices is hence not considered

the most significant reason (ibid).

Drawing on the divisions of logics emphasized by Thornton et al. (2012), as well as Windell

(2007) and Bakker et al. (2016) categorization of actors engaging in sustainability practices,

this thesis study sustainability from a market- and social logic perspective. The market logic is

similar to the one described by Thornton et al. (2012) although it is adjusted to the literature of

sustainability. Furthermore, by analyzing influences from a social logic rather than a state logic

perspective, the thesis adds on to Thornton et al. (2012) logics by incorporating a global

perspective. The reason behind the usage of a social logic is hence based on the perception that

sustainability issues are not limited to states nor country borders. Although the market- and

social logic are simplified approaches of sustainability, the logics entail elements that are

commonly discussed in regards to sustainability and will therefore constitute the foundation for

this thesis when analyzing how an organization perceives, manages and legitimizes

sustainability in the financial industry. Figure 1 represents the market- and social logic and

further demonstrates the differences between them.

Figure 1. Elements of Market- and Social Logic

11

2.5 Sustainability within the Banking Sector As the financial industry has a long history of focusing on optimizing financial return, the

context has been dominated by a market logic which has guided the understanding of what

constitutes legitimate values and behaviour (Almandoz, 2014; Davis, 2009; Thornton & Ocasio,

2008). In terms of sustainability practices, banks have previously experienced limited

stakeholder expectations concerning the involvement in sustainability issues (Borglund et al.,

2008; Kell, 2018; Sun et al., 2011). Investors were for example initially reluctant to

sustainability practices, claiming that their fiduciary duty were limited to the maximization of

shareholder profit. The banking sector’s engagement in sustainability issues have thus

previously been in the shadow of other industries which are considered to have a more direct

environmental impact (Branco & Rodrigues, 2006; Cai et al., 2012). The lack of attention

towards banks’ corporate responsibility has therefore contributed to a literature gap within

financial research (Branco & Rodrigues, 2006; Kell, 2018).

Lately, however, the demands on the financial industry have changed and banks are nowadays

expected to engage in practices for social and environmental sustainability (Borglund et al.,

2008; Kell, 2018). This became particularly evident after the financial crisis in 2008 which

raised a strong wave of criticism towards the banking sector’s narrow focus on short-term

results and lack of corporate responsibility (Borglund et al., 2008; Jacob, 2012; Lauesen, 2013).

The dominating market logic’s focus on profit maximization thus became challenged and

required banks to incorporate and engage in new practices to fulfill their stakeholders’

sustainability demands. The demands that evolved in the aftermath of the crisis strengthened

the regulations wherefore banks had to a wider extent engage in sustainability and increase

disclosures regarding their sustainability practices (Chelli et al., 2014; Lauesen, 2013).

Within the banking sector, banks also possess a wider responsibility since they are involved in

investing and lending capital to various industries and infrastructure projects which may have

an impact on societal and environmental concerns (Cai et al., 2012; Kell, 2018; O’Sullivan &

O’Dwyer, 2009). As a result of the increased responsibility, as well as the acknowledgement

that banks can be involved in controversial investment decisions, the notion of sustainable

finance has become an established concept within the industry (ibid). The European

Commission (2019) defines sustainable finance as the provision of finance to investments while

taking environmental, social, and governmental aspects into account. Even though sustainable

finance has become a common occurrence, it is still rather unclear how banks can approach the

12

concept and how sustainability activities are applied in practice (Chelli et al., 2014; O’Sullivan

& O’Dwyer, 2009). Consequently, this type of study is requested (Branco & Rodrigues, 2006;

Smets et al., 2012; Thien, 2015) and the financial industry is of particular relevance since the

incorporation of sustainability, which holds both a market- and social logic, can contribute to

insights in practices that will influence the market logic dominating field.

2.6 Institutionalization of Sustainability in Organizations Sustainability practices can neither be seen as a fixed script, nor a tool that can guarantee

organizations to obtain legitimacy (Sahlin & Wedlin, 2008; Schultz & Wehmeier, 2010).

Instead, the institutionalization of sustainability rather represents a dynamic process where the

outcome reflects the interplay between actors, actions, and expectations in the relevant context

(ibid). It is also important to be aware and consider how each actor’s own interpretations and

personal values influence and shape the institutionalization process (Schultz & Wehmeier,

2010). Consequently, to gain a better understanding for how practices become institutionalized

within organizations, it is necessary to view the interplay between actors in their current context

and how they reinforce and influence each other (Sahlin & Wedlin, 2008).

As an idea of new practices travels through an organization, it will encounter existing practices

and ideas which will influence the translation process. Schultz and Wehmeier (2010) have

described the process of how new ideas of sustainability enter corporate life, and how it begins

by being translated to the organization’s context. However, as organizations begin

communicating and performing their sustainability activities, the idea will become modified

and hence change from its original form. Nevertheless, the translation of ideas is an ongoing

process in the sense that it never becomes finalized. This is a result of what is being translated

constantly changes as it travels through different fields, settings and encounters already

embedded practices (Sahlin & Wedlin, 2008). Although the institutionalization process of

sustainability practices can be described as an unpredicted process dependent on the

individual’s own interpretations, prior research has found that it is possible to influence what

becomes legitimate sustainability practices through strategic communication (Marais, 2012;

Schultz & Wehmeier, 2010).

13

2.6.1 Legitimizing Sustainability Practices through Communication As strategic communication has been identified as an influential tool to legitimize sustainability

(Schultz & Wehmeier, 2010), it is for the purpose of this thesis relevant to look further into

how professionals can communicate their sustainability practices to make them legitimate.

Windell (2007) has explored how professionals can spur the legitimization of sustainability

practices and hence contribute to the institutionalization of sustainability. Windell’s (2007)

study of commercializing and mobilizing CSR entails three stages: labelling fluffy ideas,

packaging fluffy ideas, and mobilizing a label. In the first stage, the various labels of CSR are

reduced to one common label in order to raise awareness for businesses’ social responsibility

and to create a market demand for services addressing CSR. Stage two involves packaging

fluffy labels wherefore the concept of CSR is packaged into sellable products and services. In

the last stage, the label of CSR is mobilized by using rhetorical strategies built on economic

arguments which aim to convince the business community about the values of performing CSR.

The arguments are thus based on profit and efficiency improvements and contributes to make

CSR a comprehensible business idea.

The rhetorical stage in Windell’s (2007) study also relates to Marais’s (2012) study which

highlights three rhetorical strategies that can be applied to legitimize sustainability practices.

Marais’ (2012) three rhetorical strategies are labelled normative-, instrumental-, and value

rhetoric, and these are applied depending on what stakeholder the organization is

communicating with and what type of legitimacy the organization wishes to develop. The

normative rhetoric is used to develop corporate cognitive legitimacy and focus on creating trust

among the stakeholders by emphasizing the organization’s willingness to follow accepted

sustainability norms and standards. In order for an organization to create legitimacy based upon

trust, top management will thus need to communicate statements to the stakeholders regarding

the organization’s sustainability position and activities. The second strategy, instrumental

rhetoric, is applied to develop pragmatic legitimacy which concerns the self-interest of the

organization’s stakeholders. Instrumental rhetoric thus aims to demonstrate how the

stakeholder may benefit by the organization being engaged in sustainability practices. If the

organization satisfy stakeholders’ utility, the stakeholders will support the organization and the

practices will be considered legitimate. This rhetoric is thus similar to Windell’s (2007) third

stage which also aims to establish legitimacy by communicating how the organization’s

sustainability involvement may benefit the stakeholder. Marais (2012) last strategy, the value

rhetoric, entails approaching the stakeholders’ feelings and emotions which contributes to

14

create moral legitimacy. In this rhetorical strategy, organizations gain legitimacy for their

sustainability practices by emphasizing attributes of good citizenship as their communication

evolves around values and shared moral principles. This contributes to make the stakeholders

approve the practices and hence consider them legitimate.

For the purpose of this study, the authors have incorporated Windell’s (2007) stages, involving

the establishment and commercialization of sustainability, with Marais’ (2012) rhetorical

strategies to examine how sustainability practices can become legitimate through

communication. Although Windell’s (2007) study focuses on how consultants have managed

to establish and sell CSR services to corporations, the strategy can also be applied on actors

within an organization as they aim to legitimize and implement sustainability in a profit driven

context. Furthermore, while Marais’ (2012) study focuses on top management, the rhetorical

strategies can provide valuable insights when analyzing how professionals responsible for

driving an organization’s sustainability practices can gain legitimacy through their

communication.

2.7 Theoretical Summary and Model of Analysis The literature review has introduced institutional theory and presented the development of

institutional logics which has shed light on some of the challenges associated with multiple

logics that organizations have to successfully manage in order to legitimize their practices. By

exploring the perception of sustainability, this thesis will consider the conflict between the

market- and social logic, while also analyzing how rhetorical strategies can be applied to

legitimize sustainability practices. The empirical research in this thesis will hence be conducted

at a micro level, although the logics that are influencing the work are emerging from the macro

level. By adding a contribution to Thornton et al. (2012) division of logics, and by incorporating

the categorization of actors engaging in sustainability (Bakker et al., 2016; Windell, 2007), this

thesis will apply the market logic as characterized by profit maximization and money-makers,

and the social logic featured by social welfare and world saviours. These two logics will thus

constitute the foundation in the analysis for how a bank perceives and manages multiple logics

of sustainability.

15

Figure 2 illustrates how multiple logics, existing at a macro level, approach an organization

and demands the micro level actors to effectively manage the logics arising conflicts and

perform practices that are considered legitimate. In this thesis’ area of research, the financial

industry has traditionally been dominated by a market logic which has influenced the motives

of a bank’s operations and activities. Therefore, an analysis of how sustainability professionals

legitimize the concept of sustainability can provide fruitful insights to how sustainability

practices, containing conflicts of the market- and social logic, can be managed. Ultimately, if

the incorporated practices are considered legitimate, they can eventually also influence the field

level conception of sustainability. The figure thus illustrates the interplay between the macro

and micro level of sustainability based on literature by Bakker et al. (2016), Lindberg (2014),

Marais (2012), Pache & Santos (2013), Scott (2014), Smets et al. (2012), Thornton et al. (2012),

and Windell (2017).

Figure 2. Interplay Between Macro and Micro Level of Sustainability

Managing multiple logics

Macro level/ Field level

Micro level/ Organizational level

Market logic

Social logic

• Profit maximization

• Short-term • Business

opportunity • Money-makers

• Social welfare

• Long-term • Contribute to

the greater good • World saviours

Perception of Sustainability

Sustainability Practices

Conception of Sustainability

Legitimizing sustainability

16

Figure 3 illustrates the thesis’ model of analysis. Based on the above literature review, the

study’s model of analysis will focus on the micro level aspects of managing multiple logics and

how sustainability practices can become legitimized. The first part of the analysis model will

explore how the concept of sustainability is perceived and how sustainability professionals,

through compromising or combining multiple logics of sustainability, adapt sustainability to

suit the financial industry and its dominating market logic. The second part of the analysis will

focus on the sustainability practices and how sustainability professionals legitimize their

practices through normative-, instrumental- and value rhetorical strategies.

Figure 3. Model of Analysis

Social logic

Macro level/ Field level

Micro level/ Organizational level

Perception of Sustainability

Sustainability Practices

Managing multiple logics • Compromising • Combining

Legitimizing sustainability • Normative

rhetoric • Instrumental

rhetoric • Value rhetoric

Market logic

17

3. Method

This section begins with a presentation of the thesis’ research approach and design followed

by a description of how primary- and secondary data was collected. This part also entails

how the interviews were conducted and how the operationalization was made. Finally, the

chapter ends with a discussion of the data analysis and ethical considerations.

3.1 Research Approach In order to gain insights into the micro level perspective of managing multiple logics, this thesis

has been conducted as an exploratory research. An explorative design was considered

appropriate since it clarifies the phenomenon of sustainability and how multiple logics may

influence sustainability practices. Moreover, Bryman and Bell (2017) argue that an explorative

research is a suitable method to use when the area of study is poorly addressed; which is the

case for this thesis (Greenwood et al., 2010; Lindberg, 2014; Pache & Santos, 2010; Powell &

Colywas, 2008; Reay & Hinings, 2009; Smets et al., 2012). Furthermore, the thesis has applied

an abductive approach where the authors have moved back and forth between theory and

research in order to gradually understand the multiple logics of sustainability and how the

managing of these influences’ organizational practices. This approach enabled valuable

reflections between existing theory and practice, and was of particular relevance for this study

since research exploring the micro level perspective of institutional logics is limited. The study

has hence been steered by a theoretical framework while also allowing the findings to be fed

back into the stock of theory (Bryman & Bell, 2017; Saunders et al., 2016; Yin, 2014).

Moreover, in an attempt to enhance reliability, the authors have aimed to explicitly explain how

the phenomenon of sustainability is applied in the research. Consequently, this transparency

intends to make it possible for other researchers to perform a similar set of study (Saunders et

al., 2016).

3.2 Research Design As the aim of this paper is to examine how a bank can manage multiple logics of sustainability

and legitimize their sustainability practices, the research has been conducted as a qualitative

case study. A qualitative case study has proven to be appropriate since it allowed the studied

organization’s perception, as well as the respondents’ experiences, to become prominent

(Saunders et al., 2016; Yin, 2014). The research design has therefore contributed to the

18

possibility to draw inferences out of the perceptions of sustainability, the managing of multiple

logics, and how the bank’s sustainability practices are legitimized through rhetorical strategies.

Due to criticism concerning the external validity of case study results (ibid), the findings are

not interpreted to reflect the perception and managing of multiple logics across the financial

field. The performed case study rather provides a practical example and aims to contribute with

a deeper understanding for the complexity of managing multiple logics through studying it in

one relevant organization. The research design is therefore considered appropriate for this study

and its intended purpose.

3.2.1 Selection of Case and Respondents The Nordic bank Nordea constitutes the case of this study and exemplifies how multiple logics

of sustainability can be managed in a context that historically has been recognized as being

driven by a market logic. Nordea was selected due to their increased involvement in

sustainability initiatives which are reflected in the organization’s continuous development of

new sustainable products such as sustainable funds and green mortgages (Nordea, 2019a).

Furthermore, Nordea has as the only Nordic bank been ranked as one of the world’s top 100

most sustainable corporations (Corporate Knights, 2019). In addition, having access to in-depth

insights to Nordea’s sustainability work facilitated a sufficient data collection which further

contributed to make the bank an appropriate case to study. Therefore, in view of Nordea’s

engagement in sustainability, the bank is considered a proper organization for analyzing how

sustainability, consisting of multiple logics, can be managed and legitimized in a market driven

context.

In order to answer the research question, professionals responsible for setting and driving the

sustainability agenda within Nordea Group has been interviewed. At Nordea, Group

Sustainable Finance (GSF) is responsible for integrating sustainability throughout the

organization, as well as driving the sustainability agenda both internally and externally.

Professionals within this team were therefore relevant to interview in order to explore how

multiple logics of sustainability are managed, and how rhetorical strategies are being used to

legitimize sustainability practices in a market driven context. In accordance to Bryman and Bell

(2017) and Jacobsen (2002), the authors have applied a purposive sampling as the aim of the

sampling was to choose participants in a strategic way so that the sampled respondents were

relevant to the research question. This selection of respondents is also promoted by Saunders

et al. (2016) as they argue that interviewing experts is a favorable way to conduct exploratory

19

research. However, the authors are aware that the purposive sample venture that potential

respondents who possess important information in other parts of the organization might get

excluded from the study (Bryman & Bell, 2017). Nevertheless, the benefits of interviewing

people from GSF who drives Nordea’s sustainability work exceeded the drawbacks as their

responses contributed to a profound analysis and represents Nordea’s take on sustainability.

3.3 Data Collection 3.3.1 Interviews The study’s primary data consisted of ten interviews with respondents from GSF. Studies

conducted on a limited number of interviews are often criticized for their lack of external

validity as such studies are not considered to represent a wider population (Bryman & Bell,

2017). However, since this study aims to investigate the management of conflicting logics and

how Nordea legitimize their sustainability practices, the authors consider the chosen

respondents as able to contribute to a sufficient analysis for the thesis’ intended purpose.

Additionally, similar answers were identified already after five interviews wherefore ten

interviews were considered to represent a proper number of interviews in order to reach a

saturation for the studied topic. Table 2 will further elucidate the interview details.

Table 2. Description of Interviews

Respondent Position at Group Sustainable Finance (GSF) Date Duration

Respondent 1 Head of Thematic Research 2019.03.18 55:33 min Respondent 2 Sustainability Expert & Executive Advisor 2019.03.18 53:51 min

Respondent 3 Sustainability Expert & ESG Advisor 2019.03.19 50:40 min Respondent 4 Business Area Lead, Personal Banking 2019.03.21 49:00 min

Respondent 5 Business Area Lead, Commercial and Business Banking 2019.03.21 47:48 min Respondent 6 Business Area Lead, Wholesale Banking 2019.03.22 41:36 min

Respondent 7 Deputy Head of GSF, Business Development 2019.03.22 53:56 min Respondent 8 Sustainability Reporting Expert 2019.03.26 52:27 min

Respondent 9 Communication Manager 2019.03.26 49:50 min Respondent 10 Business Area Lead, Asset & Wealth Management 2019.04.04 43:43 min

The interviews were conducted by applying a semi-structured approach which according to

Jugesten and Mik-Meyer (2011) is appropriate when performing an exploratory research. The

interviews were thus following an interview guide which were established prior to the

20

interviews and operationalized upon the theoretical framework. The guide was used during all

occasions to entail a similar structure and it is presented in Appendix A. The semi-structured

interviews thus facilitated the possibility to ask open questions concerning sustainability and

how GSF manages and drives the concept within Nordea. Furthermore, in accordance to

Saunders et al. (2016), the semi-structured approach made it possible for the authors to deviate

from a set structure of questions and instead make room for new insights which emerged during

the interviews.

Nine of the interviews were made at the respondents’ workplace in Stockholm, and one

interview was conducted through a video-chat due to the respondent being positioned in

Finland. All the interviews were conducted in Swedish in order to make the respondents feel

more comfortable while speaking their native language. The intention was thus to create a calm

atmosphere which hopefully would result in more detailed answers (Bryman & Bell, 2017).

During all ten interviews, both authors were present although it was mainly one who was

leading the interview in order to secure an active conversation involving follow-up questions.

The other author was in charge of making sure that the discussion had covered the questions in

the interview-guide while also taking some notes and contributing with follow-up questions if

something had to be further elaborated. All respondents gave their consent to become recorded

during the interview which enabled both authors to give their full attention to the discussion.

The recordings also made it possible to transcribe the interviews word-by-word which

facilitated the possibility to go over the material and make sure that all data was taken into

consideration; which increases the reliability of the study (Bryman & Bell, 2017; Saunders et

al., 2016).

Since recordings have been used during all interviews, the authors have considered the

possibility that the respondents have chosen to express themselves more carefully. However,

considering that the thesis does not wish to explore individual opinions concerning

sustainability, but rather represents the organization’s take on sustainability, the interviews have

not been of a sensitive character wherefore the recordings should not have had any major impact

on the responses. Furthermore, since one of the interviews was performed through a video-chat,

the authors were aware of the risk that some of the personal interaction may have become

damaged. However, the contribution made by this respondent was considered important to

include in the study in order to receive data covering all of Nordea’s four business areas.

21

3.3.1.1 Constructing the Interview Guide The interview guide was, in addition to the opening questions, divided into four main parts;

Perception of Sustainability, Managing Conflicting Logics of Sustainability, Sustainability

Practices and Legitimizing Sustainability Practices. The questions thus follow the thesis’ model

of analysis and the interview guide can be found in Appendix A.

The first part of the interview guide concerned the perception of sustainability and aimed to

explore how the respondents apply Nordea’s perception of sustainability to the financial

industry. The first question was therefore asked in order to understand the respondent’s opinion

of incorporating sustainability in the banking sector which emphasized the logic related to

sustainability. Moreover, the respondent was given the opportunity to describe Nordea’s

purpose of engaging in sustainability which associated to the market- and social logic (Thornton

et al., 2012) as well as Bakker et al. (2016) and Windell’s (2007) definition of actors engaging

in sustainability: the money-makers and the world saviours. The questions therefore enabled

the authors to draw inferences out of the responses to get a deeper understanding of Nordea’s

perception of sustainability and connect it to the literature concerning market- and social logic.

The second part of the interview guide involved the managing of conflicting logics, wherefore

the authors wished to explore the respondents’ opinions concerning different elements in the

market- and social logic together with challenges of implementing sustainability. Therefore,

this part included questions concerning how GSF manages conflicting logics which is

connected to literature that emphasize how organizations can incorporate different strategies in

an attempt to reconcile conflicting demands (Kraatz & Block, 2008; Oliver, 1991). This is

primarily related to Pache and Santos (2013) and Reay and Hinings’ (2009) discussion of

compromising and combining conflicting logics. Consequently, these questions made it

possible to identify the difficulties that GSF is experiencing when incorporating their

sustainability practices, as well as how the challenges of multiple logics are being managed.

The third part involved questions regarding Nordea’s sustainability practices and this section

of the interview aimed to gain a further understanding of what is included in Nordea’s

sustainability work. To receive a deeper understanding of how the sustainability practices are

implemented in the organization, this section also included a specific question regarding how

the sustainability practices are integrated in the bank. This question facilitated the possibility to

explore how the practices could be connected to the co-existence of multiple logics discussed

22

by Lindberg (2014) and Thornton et al. (2012). The questions therefore explored Nordea’s

sustainability practices and contributed to the possibility to understand how GSF integrates

sustainability throughout the organization.

The last part of the interview guide covered the legitimizing of sustainability practices and

strived to explore how the practices become legitimized and how the respondents choose to

communicate in order to develop legitimacy. The questions thus explored how Nordea’s

sustainability practices are communicated and if the used rhetoric depends on which

stakeholder Nordea approaches. This part relates to Marais’ (2012) three different rhetorical

strategies which can be applied in order to legitimize sustainability practices. The questions

also relate to the third stage in Windell’s (2007) study which concerns how rhetorical strategies,

founded on appealing arguments for the relevant stakeholders, are applied by actors to

legitimize sustainability. This part has therefore contributed to insights of how Nordea’s

sustainability practices are being rhetorically communicated to gain legitimacy and acceptance

by their stakeholders.

3.3.2 Secondary Data Apart from the interviews, secondary data consisting of documents produced by Nordea have

been utilized to enrich the understanding of how multiple logics of sustainability are managed

in the organizational context. In order to gather data regarding Nordea’s sustainability practices

and how these relate to the market- and social logic, the study included information available

on the organization’s website, reports such as “Sustainability Report 2018” as well as brochures

communicating Nordea’s engagement within sustainability, e.g. “Sustainable Finance at

Nordea”. In addition, the secondary data consisted of Nordea’s Sustainable Finance YouTube

videos and LinkedIn posts as these also constitute an essential part of Nordea’s communication

regarding their sustainability practices.

By combining different sources of data, the authors have been able to compare the results

obtained in the interviews with the findings from the secondary data (Bryman & Bell, 2017).

This facilitated the possibility to identify common approaches towards sustainability and how

the managing of multiple logics is conducted at Nordea. Complementing the interviews with

secondary data also made it possible to analyze the rhetorical strategies applied to legitimize

Nordea’s sustainability practices, while also exposing potential inconsistencies between how

the concept of sustainability is managed by the respondents and presented in the secondary data.

23

Consequently, by using several sources of data when conducting the research, the authors have

applied triangulation which increases the study’s reliability (Patel & Davidson, 2011; Saunders

et al., 2016).

3.4 Data Analysis As the research aims to study the managing of multiple logics at a micro level, the unit of

analysis is on an organizational level. The coding process involved reviewing all collected data

and labelling data that seem to be of theoretical significance or that appear prominent within

the social worlds of those being studied (Saunders et al., 2016). The collected data was thus

reviewed and the authors searched for concepts, phrases and keywords that were considered

relevant in relation to the thesis’ purpose and model of analysis. Nevertheless, the authors have

acknowledged that their own interpretations can have influenced the data analysis as they are

the only ones deciding what is considered to be of interest in the collected data which can affect

the study’s validity (Braun & Clarke, 2006; Bryman & Bell, 2017). The authors have however

tried to avoid being biased by analyzing the data independently and then combining their

findings which contributes to improve the analysis of the data since it involves diverse

perspectives (Patel & Davidson, 2011).

3.4.1 Thematic Analysis By using a thematic analysis, the coded data was initially sorted into various themes connected

to the thesis’ model of analysis. This involved the perception of sustainability, managing

multiple logics of sustainability, sustainability practices and rhetoric used to legitimize the

sustainability practices. These were later extended with subcategories which were identified as

relevant for the thesis model of analysis, see Table 3. However, the analysis process has not

been linear but rather an ongoing process where data has been reviewed and connected to the

relevant themes that have emerged. In thematic analysis, it is important to make sure that the

identified themes do not overlap each other (Braun & Clarke, 2006), which is challenging when

studying institutional logics that are rather vague in its nature. Nonetheless, the authors strived

to create as distinctive themes as possible in order to clarify and separate each theme from each

other.

24

After the process of identifying themes, they were connected to the relevant theory and the

research purpose. This approach resulted in a detailed analysis of some aspects of the data, but

also an exclusion of the remaining data. Therefore, the authors have acknowledged and been

aware of the thematic analysis’ risk of fragmenting data which can cause a loss in the context

of what has been said; something which is considered a limitation in this type of analysis

(Bryman & Bell, 2017). However, in order to minimize this limitation, the authors have

performed a cautious thematic analysis, which as previously described involved reviewing the

data apart and then together. Moreover, as the thematic analysis aimed to study different

concepts of logics, it was important that the authors strived to identify the underlying

assumptions connected to the literature.

Table 3. Coding Scheme

Main Theme Subcategory Codes Representative Quotations

Perception of Sustainability

Market Logic

• Profit maximization • Business opportunity • Competitive • Self-interest

“Sustainability is business” “Sustainability is about surviving and preparing ourselves for what the future holds”

Social Logic

• Responsibility • Social welfare • Contribute to the

greater good • Long-term • Circular economy

“By being a central part of the society, Nordea has a big responsibility to transfer capital to more sustainable solutions” “It is part of Nordea’s duty to drive the shift towards a sustainable future”

Managing Multiple Logics

Compromising

• Altering elements of logics

• Adapting sustainability to finance

• Social concern without performing charity

“Sustainability has nowadays become correctly adapted to the financial sector” “If it is done correctly, sustainable investments will give better returns while also contributing to something good - it is a win-win”

Combining

• Not altering elements of logics

• Two-sided purpose • Business-driven &

good corporate citizen

“The primarily purpose is to make money, but this cannot be made at any cost” “Two-sided purpose, making money while contributing to a sustainable development”

Intra-Logic Conflicts

• Conflicts within one logic

• Prioritizing demands • Satisfy stakeholders

“Since sustainability involves environmental and societal concerns that usually are integrated, we have to find a way to manage these different demands” “We cannot shut down the oil industry one day to another because then we would not take our social responsibility as that would make people unemployed”

25

Sustainability Practices

Sustainability Agenda

• Strategic direction • Leadership position • GSF’s responsibility • Integrate sustainability • Institutionalization of

sustainability

”GSF sets and drives the sustainability agenda throughout Nordea by setting targets and developing position statements” ”Sustainability has to become a part of Nordea’s DNA”

Activities & Products

• Initiatives • Ambassador forum • E-learning • Star-fund • Green bond • Green mortgage

“We have developed an E-learning to educate all employees at Nordea. It is necessary to raise awareness and involve the employees within the organization” “It is important to offer something concrete to our customers, show them how profitability and sustainability is compatible”

Legitimizing Sustainability

Normative Rhetoric

• Create trust • Standards, ratings,

guidelines, policies • Legislations • Global taxonomy • Corporate legitimacy

“All established standards, guidelines and policies etc. contribute to decrease misunderstandings and make the customer feel ensured that the sustainable fund actually lives up to its expectations”

Instrumental Rhetoric

• Communicate benefits • Engage stakeholders • Attract stakeholder’

interests • Pragmatic legitimacy

“In order for us to do this journey together with our stakeholders, we have to persuade them that sustainability is beneficial. That is the key to succeed in this development”

Value Rhetoric

• Approach morality • Good citizenship • Everyone can make a

difference • Moral legitimacy

“It is about informing and inspiring our customers that their money can make a difference and that Nordea will with its financial position lead the change and contribute to a better world”

3.5 Ethical Considerations During the collection of data, the authors have considered the ethical principles of doing

research presented by the Swedish Research Council. The principles consist of the information

requirement, the consent requirement, the confidentiality requirement and the usage

requirement (Vetenskapsrådet, 2002). The authors have thus emphasized that the respondents’

participation in the study is voluntary, and that they can end the interview at any time.

Furthermore, the respondents have been promised anonymity as much as it is possible

considering that the bank and the positions are stated. However, since it is difficult to give

complete information about the study without risking to affect its findings (Bryman & Bell,

2017), the authors have strived to find an appropriate balance when giving information

regarding the study to the respondents. Prior to all interviews, the respondents were informed

that the recorded and transcribed material would be treated confidentially by the authors. This

was accomplished since the material has solely been managed by the authors themselves and it

has only been used for the purpose of this thesis.

26

4. Sustainable Finance at Nordea

This section presents the empirical findings beginning with an introduction of the selected

case. Following, Nordea’s perception of sustainability and the underlying motives for

integrating sustainability is presented. Thereafter, the sustainability involvement is

emphasized, involving Nordea’s sustainability practices and products. Finally, the chapter

ends with a description of how sustainability is communicated to become legitimized.

4.1 Presenting Nordea and Group Sustainable Finance Nordea Bank Abp is the leading bank in the Nordic region with about 30 000 employees

(Nordea, 2019b). Nordea is a full-service bank divided into four business areas: Personal

Banking, Commercial and Business Banking, Wholesale Banking, and Asset and Wealth

Management. Through their different business areas, Nordea offers a broad range of expertise

and products to meet the specific needs of private-, corporate- and institutional customers. More

particularly, Nordea’s Personal Banking has the largest customer base in the Nordic region with

about 9 million household customers. The second business area, Commercial and Business

Banking, serves, advices and partners with corporate customers by covering their business

needs through e.g. payments, cash management and financial solutions. The third business area,

Nordea Wholesale Banking, provides financial solutions to the biggest corporate- and

institutional customers. Lastly, Asset and Wealth Management offers investment, savings and

pensions solutions to individuals and institutional investors (ibid).

Group Sustainable Finance (GSF) is responsible for setting the sustainability agenda for Nordea

Group and is a Nordic team that consists of 25 people. The team works towards all business

areas where they collaborate with each business area to drive and integrate sustainability

throughout Nordea’s organization. Ultimately, GSF sets the strategic sustainability direction

and targets while also supporting business areas and group functions in the implementation

process (Nordea, 2019c).

“We [GSF] are a group function that are responsible for Nordea’s sustainability

involvement by setting the sustainability agenda and driving the sustainability

work”

27

Consequently, GSF has an influential role in forming how Nordea should approach

sustainability issues as well as what sustainability practices the bank should develop and

prioritize.

4.2 Nordea’s Perception of Sustainability When exploring the perception of sustainability, the respondents highlight that sustainability is

a broad concept which can be related to more or less everything. They describe sustainability

with words such as “fluffy”, “broad”, “vague” and “complex”.

“It is difficult to shortly describe what sustainability is and I believe that people are

still having different approaches towards sustainability, even within the financial

industry”

Considering how the financial industry can be related to sustainability, the respondents describe

that the vagueness of sustainability has contributed to the development of a common European

Union (EU) taxonomy of sustainable finance. This involves how environmental, social and

governmental (ESG) factors can be integrated in the financial analysis and is described as a tool

to sort out the confusion of sustainability within the financial industry. Despite the conceptual

uncertainty of sustainability, the respondents argue that there is an obvious connection between

sustainability and finance. Particularly, banks are considered to both have an impact on and be

affected by sustainability issues through their investments. This association was however not

obvious ten years ago and sustainability has lately been moving from being something that was

handled on the side, to become integrated into the core business.

“Previously, people said that ‘we work with this and then we also do sustainability’.

Now it has become obvious that sustainability issues affect the financial result and

sustainability aspects have become more integrated”

Consequently, sustainability which originally was perceived as a rather vague concept has

started to become an established topic within the financial industry as the association between

the banking sector and sustainability issues are being increasingly recognized. Performing

sustainability practices has therefore become an important part of Nordea’s business.

28

4.2.1 Sustainable Finance as a Business Opportunity A common view, held by all ten respondents, is the belief that sustainability and profitability

goes hand in hand. Some refer to Nordea Markets research which has found that sustainable

investments give equal or higher returns than investments in companies that are not actively

working with sustainability (Nordea, 2018a). Moreover, the respondents argue that

sustainability should not be considered a trade-off in profitability as that would make it a

question of charity.

“Sustainability in our business should not be an act of philanthropy. That

comparison should not even exist”

Furthermore, several of the respondents consider sustainability a business opportunity and

explain that it is the green part of the economy that is experiencing the fastest growth. Therefore,

the importance of incorporating sustainability is emphasized in order to keep up with the

development and remain competitive. Other respondents discuss how sustainability also can be

customer-driven and how sustainability involvement is one of the most important factors when

customers choose what bank they wish to do business with. The respondents thus consider that

engaging in sustainability contributes to several valuable benefits for the organization.

“Sustainability is business. There are some people who view sustainability as

something about saving the world but I see it as a requirement in order to survive

as a company”

In regards to how sustainability will help Nordea prepare for the future, the respondents explain

how an engagement in sustainability initiatives also give Nordea the opportunity to stay updated

and influence upcoming trends and policies. Furthermore, a sustainable and well-functioning

society is fundamental for Nordea’s own business to thrive since they, just as everyone else, is

part of the society. Therefore, it is emphasized that sustainability is important for Nordea to

engage in as an organization, but also that Nordea is dependent on a sustainable society to be

able to operate.

“If there would be no society, we would not be able to do business. It is as simple

as that”

29

Moreover, the respondents emphasize how an integration of sustainability aspects in the

financial analysis is a way to reduce financial-, operational- and regulatory risks. For example,

one respondent describes how a corporation’s lack of managing changed environmental

conditions or not having a sustainable production, is associated with risks of not being able to

operate. Ultimately, these risks would be costly for Nordea as an investor wherefore the

respondent consider this to be an obvious incentive for Nordea to engage in sustainability.

Additionally, a failure of meeting increased sustainability demands is associated with high

reputational risk. For example, one respondent refers to the current scandals of money

laundering which lately has been exposed and frequently discussed in the Swedish media. The

respondent emphasizes Nordea’s responsibility and how they must keep track of financial

transactions since clients and customers do not accept that their bank is involved in these kinds

of scandals.

“Just take a look in media and you can see how a failure of managing money

laundering compliance can cause reputational damage and a stock to drop 14 % in

just one day. It is no longer possible to ignore the impact sustainability issues have

on financial results”

Accordingly, the advantages of engaging in sustainability, as well as the risks of not managing

sustainability issues, contributes to make sustainability a crucial business aspect.

4.2.2 Sustainable Finance and the Society In addition to the business side of sustainability, the respondents also stress the responsibility

all organizations have towards the society. They discuss how Nordea, by being a central part of

the society, has a big responsibility to transfer capital towards more sustainable solutions.

Particularly, they emphasize how financial actors possess a capacity to influence clients through

their investments and lending. Consequently, it is argued that a part of Nordea’s duty is to drive

the shift towards a sustainable future.

“Since the banking industry is the engine or the hub in the society, we possess a

major opportunity to influence our customers and should therefore ensure to

prioritize green investments and finance for a sustainable future”

30

The respondents further describe how the inclusion of ESG aspects into the company analysis

also has become a part of their fiduciary duty. They explain that Nordea’s license to operate is

dependent upon taking a wider responsibility and that Nordea as an investor and asset manager,

needs to make sure that they can stand behind their actions in relation to society. Moreover,

some of the respondents consider that Nordea’s role in society has become increasingly

important as sustainability issues has become more exposed, discussed and critical in its

character.

“As part of the social contract, and to keep one’s license to operate, organizations

have to contribute to society. Sustainability is important and will only become more

important due to the societal developments that we are currently facing”

This is also exemplified by describing different global sustainability challenges; for example,

global warming, biodiversity threats and social welfare issues. Some also stress that economic

growth can no longer be about consumption that occurs at the expense of the planet’s limited

resources.

“We cannot use all our resources today because then there will be no resources left

for the future. We need to promote a circular economy that will remain in the

long-run”

Therefore, the respondents argue that Nordea has to promote a circular economy which will

enable resources to remain for the future and that sustainable finance is a crucial part of solving

the world’s sustainability issues.

4.3 Maximizing Profit and Saving the World 4.3.1 Altering Sustainability to the Banking Sector The respondents describe how sustainability previously was misunderstood within the financial

industry and primary involved an exclusion of investments in controversial sectors such as

weapon, alcohol, tobacco and pornography. This led to the establishment of ethical funds which

excluded certain industries and thus made the financial risk in these funds to increase while also

resulting in a lower rate of return in comparison to index. The respondents claim that the

previous approach was flawed and that sustainability nowadays has become correctly adapted

31

to the financial industry as investors, instead of excluding the worst industries or companies,

rather invest in the best companies based on an ESG analysis. Therefore, the respondents

continue to argue that there is no conflict between sustainability and profitability.

“Previously, investors looked at ethical investments without including the risks of

ESG. This contributed to create a myth that sustainability conflicts with profitability

- which is not true.” “If sustainability is done correctly, sustainable investments will give a higher rate

of return while also contributing to something good. That is what makes this so

great, it is a win-win”

Furthermore, they describe how Nordea’s engagement in sustainability involves how the bank,

together with its stakeholders, can contribute to a sustainable growth through financial services

including investing, lending, and advisory.

“We have to work with sustainability based on how we as a bank can make the most

impact and therefore we do not consider charity as being the right move to do”

Moreover, the respondents explain how they face different demands in their sustainability work

and some describe how Nordea’s materiality analysis is a helpful tool to manage these various

demands. The materiality analysis is an approach where Nordea, through stakeholder dialogues,

identifies critical ESG issues and focus areas which may either have a potential impact on the

company’s business performance or in other ways be of relevance for Nordea and its

stakeholders. Based on the results from the materiality analysis, GSF can identify and present

sustainability practices that align with stakeholders’ expectations as well as Nordea’s core

business.

“Contributing to society is very important but we cannot only benefit and consider

the societal perspective as that would not align with our shareholders’ perspective.

We need to create a balance between these two and adapt it to our context and

business model”

32

Consequently, the respondents claim that Nordea’s sustainability work has to be correctly

adapted to the financial context and be balanced to not only benefit the society nor the

shareholders.

4.3.2 Combining Profitability with Doing Societal Good The respondents emphasize that all companies in a market economy have to make money in

order to survive, and that banks have a primary objective to provide sufficient returns to their

shareholders. However, they also argue that profits cannot be made at any cost and there are

still some practices that always will be considered unacceptable. Some describe how customers

do not accept a bank to act against societal norms and that it is important to be responsive

towards the society. Therefore, the respondents argue that banks need to take these different

demands into consideration and make sure to both be a business-driven bank and a good

corporate citizen.

“All companies in a market economy should primarily make money, but it cannot

be made at any cost. So, the purpose can be seen as two-sided: making money while

contributing to a sustainable development”

In addition, all respondents emphasize over and over again that profitability and sustainability

do not stand in conflict to each other. This is exemplified by explaining how more sustainable

supply chains are necessary from an environmental and social point of view, but it is also in the

best interest for Nordea as an investor since sustainable supply chains are related to lower

operational- and financial risks. Another respondent describes it as follows:

“ESG analysis is conducted to manage financial risks, but it is also performed in

order to take our responsibility and contribute to a better society” Ultimately, Nordea considers themselves as being committed to both profit maximization and

doing societal good.

33

4.3.3 Prioritizing Different Demands within Sustainable Responsibility A challenge that is continuously brought up is the complexity of sustainability issues and how

these makes it difficult to perform adequate solutions or practices. The respondents stress that

sustainability issues are not only a question that should entail a discussion of profitability and

doing societal good, but also how banks can manage to prioritize between different aspects of

sustainability issues. As an example of having to prioritize between different demands, the

following dilemma is described:

“Some say that we should just stop investing in coal mills due to environmental

concerns. But what happens to all the people who will become unemployed if we

choose to exclude this industry from one day to another? Right now, there is no

transition plan within this industry and completely ignoring coal mills would have

severe social consequences. We are therefore facing a trade-off between our

environmental and social responsibility and it is impossible to please everyone”

According to the respondents, challenges of different demands associated with being a good

corporate citizen is constantly facing Nordea and contributes to make the sustainability

involvement complex and challenging as they have to manage several perspectives all at ones.

4.4 Nordea’s Journey Towards a Sustainable Future The respondents emphasize that Nordea is currently on a sustainability journey and that the

bank still has a long way to go in regards to establishing their sustainability processes and

deliver more sustainable products. The bank has also committed to take an active part in the

financial industry’s ability to shape a sustainable future, but the respondents highlight that the

transition requires a collaboration with Nordea’s partners and customers.

“Nordea is right now on a sustainability journey. We are setting targets and goals

with the aim to become the leading bank within sustainability, not only in the Nordic

countries but also in Europe”

In the Sustainability Report from 2018, CEO Casper von Koskull states that Nordea will

achieve its aim of taking a leadership position in sustainable finance by their capacity of being

a large bank and in the choices they make (Nordea, 2019c). Moreover, Koskull (ibid:5) argues

34

that leading the way and engaging in sustainability will positively influence Nordea to adapt

their business to align with the transition towards a sustainable future.

“Showing the way and being a forerunner in advocating sustainable finance put

pressure on us to have our own house in order”

Several respondents also discuss how Nordea’s challenging sustainability ambitions demands

a lot out of GSF’s sustainability work and that the development of sustainability practices is a

crucial part of Nordea’s sustainability journey.

4.4.1 Sustainability in Practice Lately, sustainability engagement has received increased attention across Nordea. This can be

explained by sustainability being a prioritized topic in general, but also because Nordea’s top

management gave GSF the mandate to integrate sustainability throughout the organization.

Nowadays, GSF holds a central position and is located with the Chief of Staff which is brought

up as an important factor for GSF to succeed in their work of integrating sustainability at

Nordea.

“Having an explicit support by top management makes it much easier to integrate

and work with sustainability in the organization. It gives you leverage and people

understand that these are serious issues”

To integrate sustainability at Nordea, the respondents describe how GSF can be seen as a

supporting unit with a primary aim to drive the sustainability agenda within each business area.

Some explain how GSF strives to integrate sustainability into Nordea’s products and processes,

financing and advising, as well as in the internal operations. In practice, the work can involve

leading or being involved in different internal projects to collectively develop new

sustainability products and processes, but it can also involve supporting teams across the

organization to align with new sustainability policies.

“Our [GSF] work is towards Nordea’s different business areas and it involves

setting targets and engaging in the development of constructing sustainable

products and processes”

35

“We work to integrate sustainability in everything that we do, it has to become a

part of Nordea’s DNA. In the past we kept sustainability at the side while continuing

with business as usual but now it is becoming central, prioritized and integrated in

Nordea’s core business”

In order to increase the overall awareness and knowledge concerning sustainability, GSF has

developed an E-learning for all employees in Nordea Group. The respondents also explain how

GSF has created a Sustainability Ambassador Forum which consists of 50 employees from all

levels and parts of the organization and which gathers once a month to discuss relevant

sustainability engagements. Besides sharing information regarding current sustainability

initiatives, the forum is an effective platform to engage employees and for receiving interesting

insights concerning Nordea’s sustainability work. The ambassador meetings are also an attempt

to diffuse sustainability practices and enables the ambassadors to take the sustainability

discussions back to their teams and units across the organization.

When discussing the integration of sustainability practices in the organization, the respondents

also emphasize that it has and will continue to take time since Nordea is a big organization. It

is thus difficult to get all employees aboard which one respondent describes as follows:

“If people do not know what sustainability is or that it is an issue, how can you

expect them to act upon it? We must work towards raising awareness and

knowledge about sustainability in the first place”

Accordingly, the respondents claim that Nordea’s sustainability work has not been rejected by

any of its stakeholders; rather it is the lack of knowledge and understanding of its relevance that

is missing and thus demands the persistent work. Figure 4 represents a summary of the

respondents associated sustainability tasks.

36

Figure 4. Summary of the Respondent’s Associated Tasks

4.4.1.1 Sustainable Products In order to make the sustainability work more available and offer something concrete towards

Nordea’s customers, the bank is continuously developing new sustainable products. On the

investment side, Nordea is for example currently providing their customers with Star-funds

which apply a positive selection and invests in companies with well-managed ESG profiles

Title at Group Sustainable Finance (GSF) Associated Sustainability Tasks

Deputy Head at GSF, Business Development Leading GSF team members, responsible for setting goals and target for GSF, representing GSF internally and externally.

Sustainability Expert & Executive Advisor

Advisor with a focus on financing related sustainability issues. Developing sustainability statements, sector guidelines, advising executives and boards on sustainability.

Sustainability Expert & ESG Advisor

Advising customers in environmental, social and governmental (ESG) aspects, product development of sustainable portfolios, supporting Nordea’s advisors in sustainability advising, presenting sustainability for external stakeholders.

Business Area Lead, Personal Banking (PB)

Supporting and driving sustainability projects within PB, such as developing Green Mortgages and E-learnings for the business area. Benchmarking and setting sustainability targets within PB.

Business Area Lead, Commercial and Business Banking (CBB)

Supporting and driving sustainability projects within CBB, such as developing Green Bonds and E-learnings for the business area. Benchmarking and setting sustainability targets within CBB.

Business Area Lead, Asset & Wealth Management (AWM)

Supporting and driving sustainability projects within AWM, such as developing Star-funds and E-learnings for the business area. Benchmarking and setting sustainability targets within AWM.

Business Area Lead, Wholesale Banking (WB)

Supporting and driving sustainability projects within WB, such as developing sustainable offerings towards large corporate and institutional customers. Hosting Nordic Sustainable Finance Conference, benchmarking and setting sustainability targets within WB.

Head of Thematic Research

Representing Nordea in international Sustainability Initiatives, such as Corporate Human Rights Benchmark and UN Principles for Responsible Banking. Initiating thematic research within specific sectors.

Communication Manager

Responsible for Nordea’s Sustainability Ambassador Forum, planning and coordinating communication about Sustainable Finance internally and externally through articles, movies and the Sustainable Finance Newsletter.

Sustainability Reporting Expert

Responsible for conducting Nordea’s Sustainability Report and materiality analysis as well as conducting all external reporting within sustainability such as Task Force on Climate-related Financial Disclosures (TCFD).

37

(Nordea, 2019d). Moreover, the respondents refer to Nordea’s Global Climate and Environment

Fund which focuses on companies that provide climate solutions with an intention to change

the world for the better.

The respondents further describe that as sustainable investments have become rather established

within the banking sector, sustainable lending has fallen behind. As a response, Nordea has

actively engaged in this development and were quite recently able to offer green bonds and

green loans to their corporate customers in Sweden. In 2018, Nordea also managed to launch

green mortgages with reduced interest rates to private customers who live in climate-smart

homes and fulfill criteria of being eco-labeled or certified by the Sweden Green Building

Council (Nordea, 2019c).

4.5 Creating Acceptance for Nordea’s Sustainability Practices The respondents talk about the importance of communicating sustainable finance properly to

make people understand and incorporate sustainability into their own practices. It is thus

necessary to consider who the receiver of the message is and adapt the communication

depending on the relevant stakeholder. To reach out to various stakeholders, Nordea uses

different forums and channels to facilitate the communication. Platforms where the

sustainability involvements are shared includes Nordea’s website, their YouTube-Channel,

LinkedIn page, distributed newsletters, and on Nordea’s intranet. Nordea’s Sustainable Finance

YouTube videos are for example highlighting the damaging consequences of climate change

and the urgent need for action. One video illustrates how Australia’s coral reefs are being

destroyed at an alarming pace and how Australia only is one example for how extreme weather,

caused by climate change, will impact the rest of the world in the near future (Nordea, 2018b).

After showing how the great barrier reef is destroyed due to climate change, Sasja Beslik, head

of GSF, says in the video:

“As human beings and investors we have to do as much as we can. We have to

invest in solutions and companies that are not contributing to this. We have to find

a way to channel capital into solutions and not investing capital into something that

is destroying this planet and this reef”

38

Nordea’s LinkedIn posts are however more business oriented and focus on how sustainability

has become increasingly important in the financial industry and that ignoring sustainability

issues can cause financial risk. Several of the LinkedIn posts also points out successful

partnerships with innovative and fast-growing companies that have accomplished sustainable

business models. Particularly, these companies are portrayed as being tomorrow’s winners,

both from an environmental and profit point of view.

Besides communicating through digital platforms, GSF performs internal and external

presentations, as well as participates in panel discussions concerning sustainable finance. This

is partly performed to anchor Nordea’s sustainability practices in the organization, but also to

reach out with the bank’s sustainability engagement to a wider public. In the presentations, a

big part concerns raising awareness regarding the link between sustainability and finance. Some

respondents also talk about the importance to identify different stakeholder triggers and adapt

the communication to align with these. They exemplify how some customers might choose

sustainable products due to ideological reasons, while others are more interested in the potential

return rate.

“Information about sustainable finance has to be communicated in such a way that

it attracts the target customer. Savings are naturally not of high interest and people

have different reasons for why they chose to engage in sustainability”

Consequently, it is important to adapt the sustainability message depending on the

communication channel and the relevant stakeholders’ interests in order to create acceptance

for the sustainability practices.

4.5.1 Formalizing Sustainability Practices Several respondents stress that Nordea’s sustainability activities have to be communicated in a

way that feels “consistent” and “trustworthy” and that this is particularly important since

sustainability easily becomes vague or complicated. The respondents describe that ratings are

used in the ESG analysis since it increases customers’ ability to compare funds. In general,

established ESG ratings, sustainability guidelines and criteria facilitate the communication

between Nordea and its stakeholders.

39

“All established standards, ratings, guidelines and policies etc. contribute to

decrease misunderstandings and make the customer feel ensured that the

sustainable fund actually fulfills its promises”

Furthermore, it is emphasized that increasing regulations and established norms contribute to

create an acceptance for sustainability practices. By referring to legislations in the

communication regarding Nordea’s sustainability involvement, the respondents describe that

sustainability practices gets taken seriously and becomes a rather unquestioned practice. Some

respondents also discuss how making sustainability practices more formal is an appropriate way

to avoid greenwashing, which is considered a big threat towards developing legitimacy for

sustainability practices.

“Since it is difficult to manage sustainability issues by just engaging in them on the

market, further legislations are needed as that makes the practices legitimate and

the sustainability work becomes a non-issue”

The respondents also discuss how sustainability is starting to become a question of compliance

and how they are convinced that sustainability legislations only will increase in the future. Some

respondents argue that increased legislations will make it easier to motivate sustainability

practices, but adds that it exists a concern that sustainability, as a concept, will become too

strictly defined and not sufficiently adapted to the financial industry. Therefore, while standards

and regulations are considered to be beneficial, they are also bringing challenges for Nordea’s

sustainability work.

4.5.2 Communicating Benefits of Sustainability The communication of sustainability often involves how Nordea’s stakeholders may benefit by

the bank’s sustainability involvement. In the brochure, “Sustainable Finance at Nordea”, it is

communicated how private customers can earn money on sustainability and it is stated how the

rate of return for sustainable investments is either equal or higher than non-sustainable

investments (Nordea, 2018c). Nordea highlight how their Star-funds “has been delivering

superior returns in several categories while at the same time helping make companies more

sustainable” (Nordea, 2019c:5). The monetary benefits are something all respondents’

underline, but they also argue how corporate customers have other benefits to gain by engaging

in sustainability. For example, they discuss how corporations nowadays must invest in

40

sustainability to attract new talents as well as customers. Moreover, by having green financing,

corporate customers can receive a sustainability certificate which can improve the corporate

customer’s own storytelling.

“When communicating with corporate customers, we explain that sustainability is

a way to attract capital and employees, and that it creates long-term value. In the

future, people will not want to make business with a company that is not engaged

in sustainability issues”

As the respondents agree that persuasion is essential, they also believe that communication

involving the benefits have to improve. A remaining challenge for Nordea is to overcome

people’s perception that sustainability entails a trade-off with profitability.

“In order for us to do this journey together with our stakeholders, we have to

persuade them that sustainability is beneficial. That is the key to succeed in this

development”

Ultimately, communication entailing the benefits of sustainability is a crucial part of Nordea’s

work in establishing and legitimizing sustainability within the financial industry.

4.5.3 Communicating Good Citizenship In addition to the benefits of engaging in sustainability, it is during the interviews, in the

“Sustainable Finance at Nordea” brochure, as well as in the “Sustainability Report 2018”, stated

that it is important to take a larger responsibility. Some particularly talk about anxiety for the

climate and how media frequently show how Earth is being damaged. In relation to the

discussions concerning climate anxiety, several respondents refer to Nordea’s Sustainable

Finance YouTube channel which are demonstrating the effects of climate change. The

respondents argue that these examples illustrate how change is needed and that people should

take their responsibility by start placing their money in sustainable funds.

“It is about informing and inspiring our customers that their money can make a

difference and that Nordea will with its financial position lead the change and

contribute to a better world”

41

“Moving your savings to sustainable funds can be as much as 27 times more

efficient to your carbon footprint than eating less meat, using public transportation,

reduce your water usage, and fly less, combined. So if you want to make a real

difference, you should invest in sustainable funds”

Furthermore, one respondent describes that GSF has, in their internal communication with their

advisors, underlined the advisors’ possibility to positively influence the customers’ savings to

more sustainable options and hence contribute to a better world. By communicating this, the

aim is to make the advisors feel pride in their profession and as being a part of the organization’s

transition towards a sustainable future.

“We need to make all our employees feel connected to our sustainability work. If

we succeed in our internal communication and get all employees aboard, it will

become easier to legitimize our practices for our external stakeholders”

Consequently, the respondents consider the moral aspects of sustainability as being useful to

communicate and therefore apply such arguments in their dialogue with Nordea’s customers as

well as with the employees.

42

5. Analysis

This section entails a discussion where the empirical findings will be analyzed in regards to

previous literature. By following the thesis’ model of analysis, a discussion of how

sustainability is perceived and how multiple logics of sustainability are managed will be

presented. Thereafter, the institutionalization of sustainability is discussed and finally, the

chapter ends with an analysis of how Nordea legitimizes their sustainability practices

through rhetorical strategies.

The empirical findings demonstrate how the foundations of institutional theory developed by

Selznick (1948), Meyer & Rowan (1977), and Scott & Meyer (1994) still provide valuable

insights to how organizations are affected by its institutional environment and how

sustainability expectations have to be appropriately managed. In accordance to the theoretical

framework, applying DiMaggio and Powell’s (1983) new institutionalism also contributes to

demonstrate how the bank is dependent upon being perceived legitimate by the society in order

to succeed with its business and how this ultimately influences the organization’s sustainability

practices. Consequently, expectations from the institutional environment affects how Nordea

performs and communicate their sustainability practices. The increased focus of sustainability

in the financial industry may therefore be a result of changes in the institutional environment,

and where new demands have contributed to make sustainability necessary to accomplish in

order to stay legitimate. Furthermore, in accordance to Friedland and Alford (1991) as well as

Thornton and Ocasio (2008), the research illustrates how GSF’s work is influenced by both a

market- and social logic of sustainability. The following discussion will further analyze how

the multiple logics of sustainability, at a micro level, are managed and legitimized in practice.

5.1 Perception of Sustainability Although all respondents describe sustainability with a common set of words, the conceptual

vagueness of sustainability is brought up as a challenge as it yet does not exist a common

perception of sustainability within the financial industry. These responses correspond with

literature explaining how sustainability can be approached in different ways and how the

intentions behind organizations engagement in sustainability can vary (Grankvist, 2009;

McElhaney, 2009; Wang, 2014). Furthermore, the findings demonstrate that the respondents

consider the link between sustainability and finance as obvious, although they admit it has not

always been the case. Therefore, it could be interpreted that sustainability has become translated

43

to the organization’s business context in a manner that has made sustainability more naturally

adapted to the banking sector. The financial industry’s dominating market logic has hence

influenced how sustainability, which entails both a market- and social logic, has become

perceived and incorporated.

When the respondents describe the perception of sustainability in the banking sector, it becomes

salient how they consider sustainability as profitable and beneficial from a business perspective.

As a result, Nordea’s perception of sustainability can be linked to the market logic which is

characterized by profit maximization, business opportunity and self-interest (Bakker et al.,

2016; Thornton et al., 2012; Windell, 2007). Additionally, the empirical data clearly states that

the respondents consider sustainability as business and not an act of philanthropy, which further

underlines the market logic approach towards sustainability. The interviews also demonstrate

how sustainability is considered an increasingly important factor for surviving and staying

competitive; something which too can explain Nordea’s increased focus on sustainability from

a market logic point of view. Moreover, by referring to financial-, operational-, regulatory- and

reputational risks that relates to sustainability issues, the respondents reinforce elements of the

market logic which confirms Lindberg (2014) and Scott’s (2014) findings entailing that there

is one dominant logic which guides organizational action.

Although the market logic is found dominant and represents Nordea’s take on sustainability,

the respondents also stress that Nordea, by being a central part of the society, has a

responsibility to transfer capital towards more sustainable solutions. Their discussion of the

importance of contributing to society can therefore be connected to elements of the social logic

which relates to the theoretical discussion by Bakker et al. (2016), Thornton et al. (2012) and

Windell (2007). However, although the respondents emphasized certain elements of the social

logic during the interviews, they mainly described Nordea’s societal responsibility as being a

part of their license to operate and how Nordea’s stakeholders expect the bank to take a larger

responsibility. Consequently, elements of the social logic can be interpreted to challenge the

market logic since the respondents’ stress that Nordea has to take responsibility and promote a

shift towards a sustainable future to fulfill their stakeholders’ expectations and keep their

license to operate which ultimately relates to Nordea surviving as a business. Therefore, it could

be claimed that while Nordea perceives and engages in sustainability from both a market- and

social logic perspective, the dominating approach to sustainability is through a market logic.

44

5.2 Managing Multiple Logics As the financial industry focuses on optimizing financial return and profit maximization, a

market logic perspective has previously been dominating the field without being challenged.

However, as more ESG issues have become prominent and exposed, the study demonstrates

how Nordea receives increasing pressures from their stakeholders to engage in sustainability.

Nordea is therefore acting in an institutional context characterized by what Kraatz and Block

(2008) and Reay and Hinings (2009) define as institutional pluralism. Thus, aspects such as

caring for social welfare and contribute to the greater good can no longer be ignored, wherefore

GSF is nowadays performing practices holding elements from both a market- and social logic.

This corresponds with Kraatz and Block (2008) as well as Oliver’s (1991) study which

emphasize that organizations can incorporate different strategies to reconcile conflicting

demands. The following discussion will therefore highlight how Nordea manages multiple

logics in their sustainability work.

5.2.1 Compromising Logics of Sustainability In the empirical findings it became apparent that the bank’s initial approach towards

sustainability was not adapted to the banking context as it mainly involved an exclusion of

controversial sectors, which led to a decrease of financial risk at the expense of a lower rate of

return. Consequently, the exclusion of certain sectors stood in contrast to the market logic which

involves the objective to maximize profit. This supports Schultz and Wehmeier’s (2010)

discussion of the complexity of incorporating sustainability into a new context, in this case the

financial industry. However, as time has gone by, the respondents believe that sustainability

has become more appropriately adapted to the financial industry and its main objectives. For

example, the implementation of ESG analysis, which are related to positive financial returns,

demonstrates how Nordea’s sustainability engagement has been altered and incorporated

elements from both the market- and social logic. This also relates to Pache and Santos’ (2013)

discussion of a compromising strategy to fit multiple logics into a business context. The fact

that the respondents claim that sustainability should be defined in a way that enables the bank

to perform their core business, indicates how the bank wishes to further engage in sustainability

but that it cannot stand in conflict with Nordea’s business model. Consequently, it seems like

GSF has compromised elements of the market- and social logic to resolve the conflict and

instead make the sustainability practices to work in harmony with the bank’s business purpose.

The notion of sustainability is therefore interpreted to have become appropriately translated to

45

Nordea’s business and thus more naturally adapted to the banking sector. It could therefore be

argued that the compromising strategy has resolved the conflicts between the market- and social

logic of sustainability and made it possible for Nordea to optimize profit while contributing to

the transition towards a sustainable future. Accordingly, by adapting sustainability to suit the

business context, Nordea has managed the challenging demands emerging from the social logic

and hence enabled the market logic to continue to dominate the industry.

Although GSF has accomplished to alter and unite elements of the market- and social logic, the

respondents stress that fulfilling different stakeholders’ demands are still challenging.

Consequently, since GSF is managing multiple logics of sustainability, they have to perform

continuous trade-offs since their stakeholders may have different requests where one entails an

even larger focus on optimizing return while another demands a better care for the society. This

highlights the challenge discussed by Pache and Santos (2013) regarding simultaneously

pleasing different referent groups and the difficulty in obtaining complete support for the

sustainability work when using a compromising strategy. An inability to fully please different

stakeholders can hence be linked to legitimacy issues regarding the sustainability practices

since some elements of a certain logic is included while others are not.

5.2.2 Combining Logics of Sustainability While the market logic is considered to dominate Nordea’s take on sustainability, the

respondents describe that Nordea’s purpose is two-sided; it entails to make money but also to

take societal responsibility. As a result, it is possible to argue that the bank, although they are

dominated by a market logic, considers themselves of being committed to both the market- and

social logic of sustainability, and that it in accordance to Pache and Santos (2013) is possible

to some extent identify a combination of the two logics in Nordea’s business strategy.

According to Pache and Santos (2013), the combining strategy involves incorporating multiple

logics without modifications. However, since some elements of the social logic is not included

in Nordea’s sustainability work, for example being a world saviour or performing charity, the

logics can be considered to actually have been altered in order to relieve conflicts between

them. Therefore, a combining strategy does not appear as being of particular relevance and the

compromising strategy is rather identified as the strategic approach to manage multiple logics

of sustainability at Nordea. It is hence not a combining strategy of the market- and social logic,

but rather an initial compromising strategy of the logics which have enabled Nordea to consider

themselves having a two-sided purpose.

46

5.2.3 Managing Intra-Logic Conflicts The theoretical framework indicates that conflicts between different logics are quite common

and that organizations have to properly manage these in their strategies. However, an interesting

finding showed how there not only exists conflicts between multiple logics, but also within a

single logic which in this study has been defined as intra-logic conflicts. In the interviews, it

became apparent that the complexity of sustainability issues makes it difficult for GSF to

prioritize between conflicting demands within the social logic. An example that was brought

up, was the demands to stop investing in coal mills which would satisfy Nordea’s environmental

responsibility that exists within the social logic. However, doing that would also involve

making thousands of people unemployed which stands against the social responsibility that also

exists within the social logic. Ultimately, there are conflicting demands within the social logic

which GSF has to appropriately prioritize in their sustainability practices to fulfill their

responsibility and contribute to the greater good.

A possible explanation for the intra-logic conflicts within the social logic could be the existence

of variations in the perception of what ‘contribute to the greater good’ actually entails. In

addition, the social logic involves several aspects and elements which attracts a broad set of

audience who might possess different opinions regarding which sustainability issues that should

be prioritized. Therefore, the respondents underline the challenge of creating a balance in

Nordea’s sustainability practices to not risk being accused of performing greenwashing or lose

legitimacy as a result of not being able to please all referent groups. Consequently, although

Lindberg (2014), Greenwood et al. (2010), Reay and Hinings (2009), Thornton et al. (2012),

and Pache and Santos (2010) do not stress intra-logic conflicts any further, it appears as a

prominent challenge in regards to managing multiple logics of sustainability at a micro level.

Why intra-logic conflicts have received limited attention within the academia can be explained

by previous studies’ level of analysis. Prior research within institutional logics has mainly been

conducted at a macro level and thus disregarded the micro level perspectives wherefore this

particular case has the ability to illustrate variations and tensions within a single logic.

Furthermore, the fact that this study is conducted in a context where the dominant market logic

has become challenged by an opposing and subordinating logic may also have contributed to

highlight intra-logic conflicts within the social logic. Studies performed in a context where the

conflicting logics seem to be more equally influential may therefore have neglected intra-logic

conflicts and instead focused on the conflicts between the different logics. In addition, the

47

novelty of the social logic in the business context can also have had an impact on this finding

since it easier arises divergent demands and expectations within a logic if it has not become

fully established and institutionalized.

5.3 Sustainability Practices Nordea’s holistic approach towards sustainability, involving the strategic sustainability agenda

for Nordea Group and the integration of sustainability into each business area, supports the

business perspective of sustainability and hence the market logic. As the materiality analysis is

based on stakeholder expectations as well as Nordea’s core business, this illustrates how the

sustainability engagement is influenced by external pressures and how sustainability practices

seem to be an important part in managing the institutional environment. Consequently, this

demonstrates the contemporary relevance of Selznick (1948) and Scott and Meyer’s (1994)

description of how external expectations are reflected in organizations. Moreover, since

sustainability has lately received increased attention, sustainability practices have in accordance

to Borglund et al. (2008), Jacob (2012) and Lauesen (2013) become an increasingly important

and essential aspect for organizations to manage.

Nordea’s sustainable products, such as their Star-funds, green corporate loans and green

mortgages, are all examples of how GSF has integrated sustainability into their financial

services and thus to become a part of their business model. However, the sustainable products

are not only desirable from a market logic perspective, but also through a social logic since they

are considered to have a positive impact on society as well. Ultimately, the products are

considered beneficial from an economic point of view and for contributing to social good. This

clearly demonstrates how a social logic influences the sustainability practices although the

practices are primary adapted to fulfill demands from the market logic perspective.

5.3.1 Institutionalization of Sustainability Practices In regards to Nordea’s sustainability practices, an empirical finding was how important it is to

have top management support and an explicit mandate to work with sustainability to facilitate

the institutionalization process. For example, the respondents described how support from the

CEO and Board of Directors made employees more open and accepting to Nordea’s

sustainability involvement as well as to engage in the integration of the sustainability practices.

This further indicates that top management plays an important part when legitimizing

48

sustainability throughout the organization. In addition, the Sustainability Ambassador Forum

is described as an effective way to integrate sustainability which imply that employee

involvement also is a beneficial strategy for the institutionalization of sustainability practices.

Besides using the ambassadors to diffuse sustainability practices within the organization, they

can also be argued to contribute to legitimize sustainability involvement by demonstrating their

acceptance of the practices among colleagues within their business areas. Consequently, the

ambassadors can be perceived as carriers of GSF’s sustainability agenda.

Nordea’s integration and establishment of sustainability practices also relates to Sahlin and

Wedlin (2008) and Schultz and Wehmeier (2010) explanation of how the process of

institutionalization involves a translation process where sustainability becomes adapted to the

relevant context and eventually reinforced. Making sustainability more concrete and applicable

to the financial context through sustainable products and policies can therefore be considered

to have contributed to institutionalize Nordea’s sustainability practices. However, it should be

noted that the integration of sustainability is an ongoing process and that the institutionalization

process is still in a rather early stage. An indication of this is Nordea’s quite novel offering of

sustainable products on the lending side of business. This further illustrates how sustainable

finance is still rather young in its nature and how the transition demands both time and effort.

Consequently, in accordance to Sahlin and Wedlin’s (2008) study, Nordea’s institutionalization

of sustainability is a dynamic process where the outcome reflects the interplay between actors,

practices, interpretations, and expectations.

5.4 Legitimizing Sustainability As the empirical findings underline the importance of communication when legitimizing

sustainability, Nordea applies a wide set of communication channels to raise awareness and a

perceived need for their sustainability practices. For example, the Sustainability Ambassador

Forum is identified as an important communication channel to internally legitimize their

sustainability practices. Gaining insights from the ambassadors regarding the sustainability

involvement also seems to benefit GSF concerning how they can adapt their communication to

make the sustainability practices considered legitimate throughout the organization.

Consequently, it could be argued that the forum function as a strategic platform for legitimizing

sustainability within the bank.

49

Raising awareness and labeling sustainability supports the first stage of Windell’s (2007) three

step process of establishing and commercializing CSR. In this particular case, it could be

claimed that sustainable finance has become the common label of sustainability within the

banking sector and as the terminology alludes on market driven aspects, it becomes easier to

communicate the link between sustainability and finance. By developing sustainability

products, such as Star-funds and green bonds, it is also possible to argue that sustainability has,

in accordance to Windell’s (2007) second stage, been packaged into sellable products and

services which facilitates the legitimization of sustainability. However, in regards to Windell’s

(2007) third stage of mobilizing a label, GSF does not only use economic arguments related to

the dominating market logic, but rather adapt the arguments and rhetorics depending on the

relevant stakeholder and on what the respondents refer to as “stakeholder triggers”. The

application of different legitimizing arguments and rhetorics have for example been identified

in Nordea’s YouTube videos which primarily apply value rhetoric to approach feelings and

emotions, and in the LinkedIn posts which primarily involves instrumental rhetoric to

emphasize how stakeholders may benefit by Nordea’s sustainability practices. Stakeholder

triggers can hence be defined as arguments that are found appealing to a specific stakeholder

and initiates some kind of stakeholder reaction. In regards to institutional logics, the relevant

stakeholder trigger seems to depend on what type of logic the stakeholder holds towards

sustainability. If a stakeholder is interested to invest in sustainability to maximize profit, the

appealing arguments should approach the market logic and therefore contain economic benefits.

Likewise, if a stakeholder rather holds a social logic of sustainability, the arguments should

entail how sustainable investments contribute to social good. The application of stakeholder

triggers is also related to Marais’ (2012) discussion of how professionals can use different

rhetorical strategies to legitimize sustainability, which will be further discussed in the following

analysis.

5.4.1 Normative Rhetoric It is apparent that the establishment of standards and ratings enhance the trustworthiness of

Nordea’s sustainability practices which contribute to legitimize the sustainability work. The

fact that Nordea’s products are resting on established criterias and communicated in a manner

which facilitates a comparison between different products, indicate how GSF consciously tries

to increase product credibility and be transparent in their communication with stakeholders.

This type of communication can be connected to Marais’ (2012) normative rhetoric as the

findings demonstrate how sustainability practices ought to rest on accepted sustainability norms

50

to become trusted by its stakeholders. Following accepted standards and regulations which have

been verified by a third party is also identified as an important part of making the sustainability

work become accepted by a wider set of stakeholders. In addition, sustainability regulations are

found to moderate greenwashing and the upcoming legislations appear to become beneficial as

it enables Nordea to communicate that they are fulfilling expectations established by

acknowledged institutional actors. Consequently, regulations can facilitate Nordea’s possibility

to obtain corporate legitimacy.

In terms of formalizing sustainability, the findings indicate how regulations will become

increasingly more influential in the financial industry and some respondents even believe that

sustainability will become a question of compliance. While the trend towards more strictly

defined sustainability criterias contributes to legitimize sustainability practices, the respondents

argue that it also seems to be a breaking point where legislation becomes too strict and rather

complicate the integration of sustainability. Meaning that further legislation may involve

certain criteria that makes it difficult for sustainability practices to become integrated in the

core business. Consequently, although referring to sustainability standards and legislations in

the communication is perceived to benefit GSF’s legitimizing process, the actual implications

of more legislations might not sufficiently align with the financial industry and thus make it

more difficult to integrate sustainability.

5.4.2 Instrumental Rhetoric Instrumental rhetoric seems to be the most prominent rhetoric applied by GSF in the

legitimization of Nordea’s sustainability practices as they actively communicate how

sustainability practices contribute to satisfy stakeholder interests. By using this strategy, Nordea

are thus able to develop what Marais (2012) refer to as pragmatic legitimacy which concerns

the self-interest of the organization’s stakeholders. Towards Nordea’s private customers, the

communication primary emphasizes monetary benefits, while the communication towards

Nordea’s corporate customers entails further benefits such as attract investor capital, as well as

new talents and customers. Consequently, this demonstrates how GSF tries to appeal different

interests of various stakeholders. Why this is considered the most salient rhetorical strategy can

be explained by the fact that it aligns with the market logic perspective, which as previously

stated is dominating the context. The communication corresponds to the market logic as it

primary states the profit maximization and business opportunities that stakeholders can gain by

engaging in sustainability. This also relates to Windell’s (2007) explanation of how

51

sustainability becomes mobilized through communicating appealing arguments about the value

of sustainability in relation to the business context. Thus, this study highlights how the

communication of economic benefits makes sustainability become perceived as a reasonable

and necessary business practice which contributes to legitimize Nordea’s sustainability

involvement.

While communicating benefits associated with sustainability practices is found key to establish

sustainability, the empirical findings indicate how it still exists a conception among

stakeholders concerning sustainable finance being a trade-off with profitability. Sustainability

has therefore not yet become completely legitimized among stakeholders and the perception of

a trade-off continues to be one of the main challenges for GSF in their communication of

Nordea’s sustainability work.

5.4.3 Value Rhetoric The respondents emphasize that Nordea, by being a large bank in the society, ought to take its

responsibility and contribute to the transition towards a sustainable future. GSF also states

clearly in both the interviews and in their videos and documents that they need to take

responsibility for the future of this planet and encourage all their customers to do the same.

Consequently, this type of communication relates to Marais’ (2012) strategy of using value

rhetoric which aims to create legitimacy based on moral aspects. As previously emphasized,

Nordea’s Sustainable Finance YouTube videos are obvious examples of where value rhetoric

is being used. This could possibly be explained by the fact that a video, through its pictures and

sounds, facilitates the opportunity to easier approach people’s feelings and emotions which can

create moral legitimacy. Emphasis on moral aspects are also salient in GSF’s internal

communication with their advisors as the communication intends to make the advisors feel that

they possess a large opportunity to impact sustainability issues. Consequently, by

communicating the responsibility the advisors possess in their professional role, it can be

argued that Nordea also indirectly tries to make their sustainability practices become perceived

as morally necessary and legitimate in the eyes of their employees.

However, in comparison to the other rhetoric, the value rhetoric was found to be the least used

rhetorical strategy. One possible explanation for this is that Nordea’s primary focus is driven

by a market logic which entails viewing sustainability as a business opportunity rather than

engaging to become a world saviour (Bakker et al., 2016; Windell, 2007). The bank is therefore

52

using value rhetoric but the communication is altered to not undermine the business side of

engaging in sustainability since that is dominating Nordea’s practices. Ultimately, value

rhetoric can be perceived to complement the other rhetorical strategies and mainly be applied

to satisfy stakeholders committed to the social logic as well as to spur the personal engagement

for sustainability among Nordea’s employees.

53

6. Conclusions This study aimed to examine how multiple logics of sustainability can be managed and

legitimized in a context that historically has been recognized as being dominated by a market

logic. As the study was particularly interested in exploring the micro perspective of institutional

logics, the access to professionals responsible for the sustainability agenda at Nordea enabled

valuable insights to how the conflicting demands are practically managed. The findings clearly

conclude how the market logic continues to dominate the bank’s perception of sustainability,

although it has become challenged by the social logic which ultimately has influenced the

sustainability practices. In order to manage multiple logics of sustainability, the compromising

strategy has been applied to alter and incorporate elements of both the market- and social logic

to make sustainability appropriately suit the business context. Accordingly, the compromising

strategy has facilitated the opportunity to perform sustainability practices in a manner which

makes the fulfilling of doing societal good to not stand in conflict with the primary purpose of

making money. A combining strategy has therefore not been applied when managing multiple

logics of sustainability. By studying the micro perspective, the authors made an interesting

finding of the existence of intra-logic conflicts. In this particular case, it became apparent that

the complexity of sustainability issues makes it difficult for professionals to prioritize and

manage different demands within the social logic. The study further illustrates how stakeholder triggers are identified and how they influence the

communication by making sustainability appealing to a specific stakeholder. In regards to

stakeholder triggers, the study also demonstrates how normative-, instrumental-, and value

rhetorical strategies are applied to legitimize sustainability practices. Particularly, normative-

and instrumental rhetoric have been identified as being most prominent when creating

legitimacy through communication. This can be explained by the high trustworthiness of

established standards which are emphasized in normative rhetoric as well as how instrumental

rhetoric aligns with the dominating market logic. Why the value rhetoric is the least used

strategy is explained by its association to the social logic which in the financial industry is

subordinating the dominating market logic. Consequently, the case study has contributed to

enhance the understanding for how multiple logics of sustainability can be managed and

adapted to fit a profit driven context, as well as how sustainability involvement can become

legitimized through different rhetorical strategies. The empirical findings can therefore provide

practical implications for organizations. As sustainability is an urgent discussion, organizations

54

are currently going through a shift where they confront challenges associated with global

sustainability issues. Since the case demonstrates how the challenge of managing multiple

logics have been solved through a compromising strategy, it appears that organizations may

benefit by using a similar approach when integrating sustainability into a market driven context.

Nordea can therefore portray an example and contribute with insights of how new demands can

be reflected in an organization and how professionals can manage and legitimize sustainability

in a similar context.

6.1 Limitations and Future Research The study intended to contribute with both theoretical and practical knowledge by exploring

how multiple logics of sustainability can be managed and legitimized in a market driven

context. By responding to the requests regarding the neglected micro level perspective of

multiple logics, this study has fulfilled its purpose to contribute to the academia. However, since

the research only is conducted at a single organization, the findings may not be applicable in

other organizational contexts. To further strengthen the understanding for managing multiple

logics of sustainability at a micro level, it would for future research be relevant to study how

other organizations manage multiple logics of sustainability in a different context.Since this study interviewed sustainability professionals, the findings can indicate an excessive

similarity of how sustainability is perceived, managed and legitimized within the bank. It is

thus possible that a replication of this study among another set of respondents may yield a

different result. Consequently, it would for future research be relevant to conduct a similar study

with respondents who are not sustainability professionals, but still encounter sustainability in

their work. Particularly, it would be interesting to explore how these respondents apply

sustainability into their contexts and if the legitimizing of sustainability differs depending on

the respondent’s position in an organization. Finally, as this study only touches upon the phenomenon of conflicts within a logic, so called

intra-logic conflicts, future research within this area is called for. Therefore, in order to enrich

the theory of institutional logics and gain a proper understanding of intra-logic conflicts, it

would be valuable to further explore how conflicting demands within a single logic can be

managed at a micro level. Conducting such a study would hence contribute to both practical-

and theoretical knowledge concerning the relatively unexplored area of intra-logic conflicts.

55

7. References Almandoz, J. (2014). “Founding Teams as Carriers of Competing Logics: When Institutional

Forces Predict Banks' Risk Exposure”. Administrative Science Quarterly, 59(3):442–473. Alvesson, M., & Spicer, A. (2018). “Neo-Institutional Theory and Organization Studies: A

Mid-Life Crisis?”. Organization Studies, 40(2):199–218. Bakker, F.D., Hond, F.D., Neergaard, P., & Crowther, D. (2016). Managing Corporate Social

Responsibility in Action: Talking, Doing, and Measuring. Abingdon: Taylor & Francis Group.

Borglund, T., De Geer, D., & Hallvarsson, M. (2008). Värdeskapande CSR: Hur företag tar

socialt ansvar. Falun: Nordstedts Akademiska Förlag. Boxenbaum, E., & Jonsson, S. (2008). “Isomorphism, Diffusion and Decoupling” in

Greenwood, R., Oliver, C., Sahlin-Andersen, K., & Suddaby, R (Eds.) The Sage Handbook of Organizational Institutionalism: 78-98. London: SAGE Publications.

Branco, M.C., & Rodrigues, L.L. (2006). “Communication of Corporate Social Responsibility

by Portuguese Banks: A Legitimacy Theory Perspective”. Corporate Communications, 11(3):232–248.

Braun, V., & Clarke, V. (2006). “Using Thematic Analysis in Psychology”. Qualitative

Research in Psychology, 3(2):77–101. Bryman, A., & Bell, E. (2017). Business Research Methods. 4th edn. Oxford: Oxford

University Press. Butler, A. (2018). “Do Customers Really Care About Your Environmental Impact?”. Forbes.

Accessed: https://www.forbes.com/sites/forbesnycouncil/2018/11/21/do-customers-really-care-about-your-environmental-impact/#71054f70240d [2019-02-11]

Butler, T. (2010). “Compliance with Institutional Imperatives on Environmental Sustainability: Building Theory on the Role of Green IS”. Journal of Strategic Information Systems, 20(1):6–26.

Cai, Y., Jo, H., & Pan, C. (2012). “Doing Well While Doing Bad? CSR in Controversial

Industry Sectors”. Journal of Business Ethics, 108(4):467–480. Carroll, A.B. (1999). “Corporate Social Responsibility: Evolution of a Definitional

Construct”. Business & Society, 38(3):268–295. Chelli, M., Durocher, S., & Richard, J. (2014). ”France’s new economic regulations: insights

from institutional legitimacy theory”. Accounting, Auditing & Accountability Journal, 27(2):283–316.

56

Corporate Knights. (2019). “Global - 100 results”. Corporate Knights. Accessed: https://www.corporateknights.com/reports/2019-global-100/2019-global-100-results-15481153/ [2019-04-04]

Davis, G.F. (2009). Managed by the Markets: How Finance Re-shaped America. Oxford: Oxford University Press.

DiMaggio, P.J., & Powell, W.W. (1983). “The Iron Cage Revisited: Institutional

Isomorphism and Collective Rationality in Organizational Fields”. American Sociological Review, 48(2):147–160.

Dowling, J., & Pfeffer, J. (1975). “Organizational Legitimacy: Social Values and

Organizational Behavior”. The Pacific Sociological Review, 18(1):122–136. European Commission. (2019). “Sustainable Finance”. European Commission.

Accessed: https://ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance_en [2019-01-25]

Friedland, R., & Alford, R.R. (1991). “Bringing Society Back in: Symbols, Practices and Institutional Contradictions” in Powell, W. W., & DiMaggio, P. J. (Eds.) The New Institutionalism in Organizational Analysis: 232–263.Chicago: University of Chicago Press.

Furusten, S. (2013). Institutional Theory and Organizational Change. Cheltenham, UK:

Edward Elgar Publishing Limited. Gauthier, J. (2013). “Institutional Theory and Corporate Sustainability: Determinant Versus

Interactive Approaches”. Organization Management Journal, 10(2):86–96. Goodrick, E., & Reay, T. (2011). “Constellations of Institutional Logics: Changes in the

Professional Work of Pharmacists”, Work and Occupations, 38(3): 372–416. Grankvist, P. (2009). CSR i praktiken: hur företaget kan jobba med hållbarhet för att tjäna

pengar. Malmö: Liber. Greenwood, R., Diaz, A.M., Li, S.X., & Lorente, J.C. (2010). “The Multiplicity of

Institutional Logics and the Heterogeneity of Organizational Responses”. Organization Science, 21(2):521–539.

Guth, K. (2016). “Institutional Theory” in Carroll, C.E. (Eds.) The SAGE Encyclopedia of

Corporate Reputation: 359–361. Thousand Oaks, CA: SAGE Publications. Hunoldt, M., Oertel, S., & Galander, A. (2018). “Being Responsible: How Managers Aim to

Implement Corporate Social Responsibility”. Business and Society, pp: 1–42. Høvring, C.M. (2017). “Caught in a communicative catch-22? Translating the notion of CSR

as shared value creation in a Danish CSR frontrunner”. Business Ethics: A Eur Rev., 26(4):369–381.

57

Jacob, C.K. (2012). “The Impact of Financial Crisis on Corporate Social Responsibility and Its Implications for Reputation Risk Management”. Journal of Management and Sustainability, 2(2):259–275.

Jacobsen, D.I., Sandin, G., & Hellström, C. (2002). Vad, hur och varför: om metodval i

företagsekonomi och andra samhällsvetenskapliga ämnen. Lund: Studentlitteratur. Jugesten, L., & Mik-Meyer, N. (2011). Kvalitativa Metoder: Från vetenskapsteori till praktik.

Översättning: Andersson, Sten. Lund: Studentlitteratur. Kell, G. (2018). “The Remarkable Rise of ESG”. Forbes. Accessed:

https://www.forbes.com/sites/georgkell/2018/07/11/the-remarkable-rise-of-esg/#bdddea316951 [2019-01-24]

Kraatz, M.S., & Block, E.S. (2008). “Organizational Implications of Institutional Pluralism”

in Greenwood, R., Oliver, C., Sahlin-Andersen, K., & Suddaby, R (Eds.) The Sage Handbook of Organizational Institutionalism: 243–275. London: SAGE Publications.

Lauesen, L.M. (2013). “CSR in the aftermath of the financial crisis”. Social Responsibility

Journal, 9(4):641–663. Lawrence, T., Suddaby, R., & Leca, B. (2011). “Institutional Work: Refocusing Institutional

Studies of Organization”. Journal of Management Inquiry, 20(1):52-58. Lawrence, T.B., & Suddaby, R. (2006). “Institutions and Institutional Work” in Clegg, S.R.,

Hardy, C., Nord, W.R., & Lawrence, T (Eds.) Handbook of Organization Studies: 215–254. Thousand Oaks, CA: SAGE Publications.

Lindberg, K. (2014). “Performing Multiple Logics in Practice”. Scandinavian Journal of

Management, 30(4):485–497. Lounsbury, M. (2008). “Institutional rationality and practice variation: New directions in the

institutional analysis of practice”. Accounting, Organizations and Society, 33(4):349–361.

Marais, M. (2012). ”CEO rhetorical strategies for corporate social responsibility (CSR)”.

Society and Business Review, 7(3):223–243. McElhaney, K. (2009). “A strategic approach to corporate social responsibility”. Leader to

Leader, 2009(52):30–36. Meyer, J.W., & Rowan, B. (1977). “Institutionalized Organizations: Formal Structure as Myth

and Ceremony”. American Journal of Sociology, 83(2):340–363. Nordea. (2018a). “ESG - Rested and Ready”. Nordea Markets. Accessed:

https://nordeamarkets.com/sv/esg-rested-and-ready/ [2019-04-04] Nordea. (2018b). “Climate change in Australia: A continent on the brink”. Nordea. Accessed:

https://www.youtube.com/watch?v=BYxiELigUY8 [2019-05-01]

58

Nordea. (2018c). “Sustainable Finance at Nordea”. Nordea. Accessed: https://www.nordea.com/Images/33-282871/Sustainable%20Finance%20at%20Nordea.pdf [2019-04-01]

Nordea. (2019a). “Sustainability at a Glance”. Nordea. Accessed:

https://www.nordea.com/en/sustainability/sustainability-in-nordea/sustainability-at-a-glance/ [2019-03-11]

Nordea. (2019b). “Our Organization”. Nordea. Accessed: https://www.nordea.com/en/about-

nordea/who-we-are/our-organisation/ [2019-04-01] Nordea. (2019c). “Sustainability Report 2018”. Nordea. Accessed:

https://www.nordea.com/Images/33-304475/Nordea%20Sustainability%20Report%202018.pdf [2019-04-01]

Nordea. (2019d). “Star-fonderna”. Nordea. Accessed:

https://www.nordea.com/sv/hallbarhet/hallbar-verksamhet/placeringar/stars-fonderna/ [2019-04-09]

Oliver, C. (1991). “Strategic Responses to Institutional Processes”. The Academy of

Management Review, 16(1):145–179. O’Sullivan, N., & O’Dwyer, B. (2009). “Stakeholder perspectives on a financial sector

legitimation process: the case of NGOs and the Equator Principles”. Accounting Auditing & Accountability Journal, 22(4):553–587.

Pache, A-C., & Santos, F. (2010). “When Worlds Collide: The Internal Dynamics of

Organizational Responses to Conflicting Institutional Demands”. The Academy of Management Review, 35(3):455–476.

Pache, A-C., & Santos, F. (2013). “Inside the hybrid organization: selective coupling as a

response to competing institutional-logic". Academy of Management Journal, 56(4):97–1001.

Patel, R., & Davidson, B. (2011). Forskningsetiska grunder: att planera, genomföra och

rapportera en undersökning. 4 uppl. Lund: Studentlitteratur. Porter, M., & Kramer, M. (2011). “Creating Shared Value”. Harvard Business Review,

89(1/2):62–77. Powell, W.W., & Colywas, J.A. (2008). “Microfoundations of Institutional Theory” in

Greenwood, R., Oliver, C., Sahlin-Andersen, K., & Suddaby, R (Eds.) The Sage Handbook of Organizational Institutionalism: 276–298. London: SAGE Publications.

Raza, M. (2018). “How to Measure the Immeasurable Degree to Which an Organization is

Sustainable?”. Management of Sustainable Development, 10(1):49–52. Reay, T., & Hinings, C.R. (2009). “Managing the Rivalry of Competing Institutional Logics”.

Organization Studies, 30(6):629–652.

59

Sahlin, K., & Wedlin, L. (2008). “Circulating Ideas: Imitation, Translation and Editing” in Greenwood, R., Oliver, C., Sahlin-Andersen, K., & Suddaby, R (Eds.) The Sage Handbook of Organizational Institutionalism: 218–242. London: SAGE Publications.

Saunders, M., Lewis, P. & Thornhill, A. (2016). Research Methods for Business Students. 7th

edn. England, Harlow: Pearson Education Limited. Schultz, F., & Wehmeier, S. (2010). “Institutionalization of corporate social responsibility

within corporate communications: Combining institutional, sensemaking and communication perspectives”. Corporate Communications, 15(1): 9–29.

Scott, W.R. (2014). Institutions and Organizations: Ideas, Interests and Identities. 4th edn.

Thousand Oaks, CA: SAGE Publications. Scott, W.R & Meyer, J.W. (1994). Institutions and organizations. Thousand Oaks, CA:

SAGE Publications. Selznick, P. (1948). “Foundations of the Theory of Organization”. American Sociological

Review, 13(1):25–35. Sheehy, B. (2015). “Defining CSR: Problems and Solutions”. Journal of Business Ethics,

131(3):625–648. Smets, M., Morris, T., & Greenwood, R. (2012). “From Practice to Field: A Multilevel Model

of Practice-Driven Institutional Change”. The Academy of Management Journal, 55(4):877–904.

Suchman, M.C. (1995). “Managing Legitimacy: Strategic and Institutional Approaches”.

Academy of Management Review, 20(3):571–610. Sun, W., Louche, C. & Perez, R. (2011). Finance and sustainability: towards a new

paradigm?: a post-crisis agenda. Bingley, U.K: Emerald. Swan, J., Bresnen, M., Robertson, M., Newell, S., & Dopson, S. (2010). “When policy meet

practice: Colliding logics and the challenges of ‘Mode 2’ initiatives in the translation of academic knowledge”. Organization Studies, 31(9/10):1311–1340.

Thien, G.T.K. (2015). “CSR for Clients’ Social/Environmental Impacts?: Financial

institutions and CSR”. Corporate Social Responsibility and Environmental Management, 22(2):83–94.

Thornton, P., & Ocasio, W. (1999). “Institutional Logics and the Historical Contingency of

Power in Organizations: Executive Succession in the Higher Education Publishing Industry, 1958–1990”. American Journal of Sociology, 105(3):801–843.

Thornton, P.H., & Ocasio, W. (2008). “Institutional Logics” in Greenwood, R., Oliver, C.,

Sahlin-Andersen, K., & Suddaby, R (Eds.) The Sage Handbook of Organizational Institutionalism: 99–129. London: SAGE Publications.

60

Thornton, P.H., Ocasio, W., & Lounsbury, M. (2012). The institutional logics perspective: a new approach to culture, structure, and process. Oxford: Oxford University Press.

Vetenskapsrådet. (2002). Forskningsetiska principer inom humanistisk-samhällsvetenskaplig

forskning. Stockholm: Vetenskapsrådet. Yin, R.K. (2014). Case Study Research: Design and Methods. 5th edn. London: SAGE

Publications. Wang, S. (2014). “On the relationship between CSR and profit”. Journal of International

Business Ethics, 7(1):51–57. Windell, K. (2007). “The Commercialization of CSR: Consultants Selling Responsibility” in

Hond, F., Bakker, F. G., & Neergaard, P., (Eds.) Managing Corporate Social Responsibility in Action: Talking, Doing and Measuring: 33–52. Burlington, VT: Ashgate Publishing.

Zilber, T.B. (2015). “Institutional Logics and Institutional Work: Should They Be Agreed?”

in Lounsbury, M., & Boxenbaum, E. (Eds.) Institutional Logics in Action, Part A: 77–96. Emerald Group Publishing Limited.

61

Appendix Interview Guide Opening Questions

1. What is your position at Nordea? 2. What are your main work tasks?

Perception of Sustainability

3. How do you relate sustainability to the banking sector? 4. What is Sustainable Finance according to you? 5. Why do you believe Nordea is engaged in sustainability?

Managing Conflicting Logics of Sustainability

6. How do you associate financial return and sustainability? 7. What societal responsibility do you believe Nordea has in terms of sustainability? 8. How is Nordea’s sustainability engagement perceived across the organization? 9. What challenges can you come across in your work at GSF?

Sustainability Practices

10. Can you describe how Nordea’s sustainability engagement and practices look like? 11. How do Nordea integrate sustainability throughout the organization?

Legitimizing Sustainability Practices

12. How do GSF work to make sustainability become accepted within the organization? 13. How do GSF work to make the sustainability involvement become accepted among

external stakeholders? 14. How do Nordea communicate and present their sustainability engagement and

practices?