BSR's financial services practice more than doubled in the past year, underscoring a growing industry trend toward more responsible business strategies that increase access to financial services for more people worldwide.

"It's telling that the financial services industry is pursuing more strategic corporate responsibility practices during a time of great turmoil for the sector," said Laura Gitman, Director, Advisory Services, who leads BSR's financial services practice. "In 2008 and in 2009, banks ranked third to last in an Edelman survey of the most trusted industries globally. Responsible practices will help the financial services industry restore that trust and create products that are sustainable--and profitable--for the long term."

BSR's financial services work with companies such as Australia’s ANZ bank and Visa--as well as BSR's recent research on trends in environmental, social, and governance (ESG) investing globally and in China--reveal that companies in the financial services sector are increasingly focused on corporate responsibility strategies.

Responsible Global Expansion

In an era when the bank down the street may be headquartered in a foreign country, the question of a company's social license to operate has taken on new meaning: Who provides that license, and what are the implications of globalization for the financial services sector?

In May of 2009, Australia-based ANZ came to BSR for expertise on expanding its operations in Asia. The company, which has a strong history of corporate responsibility, sought input on how to develop a new, group-wide corporate responsibility strategy to align with its business growth strategy, focusing on new target markets in China, Indonesia, and Vietnam.

After conducting comprehensive stakeholder engagements in these locations, BSR helped ANZ develop a corporate responsibility framework that ANZ launched globally in September 2009, focusing on:

• Building individual prosperity: using products, services, education, and employment programs to create pathways to security and prosperity


• Contributing to thriving communities: developing local capacity to create solutions for important community issues


• Navigating growth responsibly: demonstrating responsible practices and decisions that balance economic, social, and environmental considerations

Though ANZ is already a clear leader in corporate responsibility--it was recently assessed as the world’s top bank on the Dow Jones Sustainability Index for the third year--this new platform will add value to the company's existing work as it expands. "Navigating growth responsibly, and being responsive to local needs, is the next step for financial services companies that are expanding globally," said Gitman.

Increasing Access to Financial Products and Services

One of the primary challenges in the financial services industry today relates to increasing access to necessary financial products such as credit, savings, and money transfers without putting those people who comprise these new markets at financial risk.

"It's two sides of the same coin: The financial services industry has an obligation to increase access to its products and services without crossing the line into the predatory lending practices that resulted in the subprime mortgage debacle," Gitman said. "BSR recommends an approach that incorporates ethical products and services, whereby companies expand access to financial products while ensuring that these products are truly helping customers, and that the customers understand the related risks."

BSR's work with Visa is an example of this approach to increase access to financial services in an ethical manner. In preparation for its IPO, Visa enlisted BSR to create an integrated strategy that tied its business and philanthropic objectives to a highly focused mission centered around "inclusive economic growth." For Visa's business, this meant expanding offerings such as secure remittance payments to parts of the world where those services are needed most. Visa's philanthropic strategy complemented this practice by focusing on providing financial literacy training for the people in these new markets. Visa also formed a signature partnership with Oxfam to promote economic growth for all.

"In the long run, companies that increase access by offering 'ethical' products and services will ensure more sustainability, as well as payback for the company and the customer," said Gitman.

On the Horizon: Promoting Sustainability in Other Sectors

As investors, financial services companies are uniquely positioned to promote corporate responsibility in other industries by rewarding or penalizing companies for their commitment to sustainability.

"Recent BSR research on ESG integration and on sustainable investing in China reveals that more mainstream investors are using ESG criteria as a predictor of long-term, sustainable performance and share price," said Gitman.

This trend is driven by a variety of factors, including:

• Increased stakeholder demands and interest in governance and responsible business practices, as well as investor belief that such issues can have a material impact on financial performance


• Growing demand from institutional investors


• Increased availability of ESG data due to more voluntary corporate reporting, external research, and data providers, and increasing regulation over companies' reporting on non-financial issues

"These trends will help drive the integration of ESG data in more mainstream investment analysis and reward companies with strong ESG performance--which will incentivize progress on sustainability issues across a broad range of industries," said Gitman. "The growth in BSR's financial services practice underscores the industry's increasing emphasis on responsible practice--and the industry's growing role in promoting corporate responsibility across all sectors."

For more information:
Additional member and client companies in BSR's financial services practice include American Express, Barclays Bank, Citigroup, GE, Kohlberg Kravis Roberts & Co., Sumitomo Trust & Banking Co., and Wells Fargo. To learn more, visit www.bsr.org/consulting/industry/financial-services.cfm, or contact Laura Gitman at lgitman@bsr.org.

To arrange an interview with an expert from BSR on trends in sustainable investing, contact Eva Dienel at edienel@bsr.org.

About BSR
A leader in corporate responsibility since 1992, BSR works with its global network of more than 250 member companies to develop sustainable business strategies and solutions through consulting, research, and cross-sector collaboration. With six offices in Asia, Europe, and North America, BSR uses its expertise in the environment, human rights, economic development, and governance and accountability to guide global companies toward creating a just and sustainable world. Visit www.bsr.org for more information.

BSR

BSR

Since 1992, Business for Social Responsibility (BSR) has been providing socially responsible business solutions to many of the world's leading corporations. Headquartered in San Francisco, with offices in Europe and China, BSR is a nonprofit business association that serves its 250 member companies and other Global 1000 enterprises. Through advisory services, convenings and research, BSR works with corporations and concerned stakeholders of all types to create a more just and sustainable global economy. For more information, visit www.bsr.org.

More from BSR