Description
The documentation on the need of CSR for banks and reviews the sustainability report of standard chartered.
CSR WRITTEN ASSIGNMENT REVIEW OF SUSTAINABILITY REPORT
1. INTRODUCTION 1.1 Why Banks Need CSR??
Say for example, banks lend just to anyone without checking the credibility, without checking the impact of their financing on the environment. The result is nothing but high climatic changes and recession due to increasing defaulters. This clearly shows that if banks do not follow their corporate social responsibility as a trade of for short term gains, they will be digging a grave for themselves in long term. Moreover, trust of people invested in the banks decreases, thus eroding their profits. Hence, CSR is very important for them to sustain.
1.2 History
Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. From the early 1990s, Standard Chartered has focused on developing its strong franchises in Asia, Africa and the Middle East. It has concentrated on consumer, corporate and institutional banking and on the provision of treasury services - areas in which the Group had particular strength and expertise. One important thing to notice is that even in the years of recession when everyone was cost cutting and focussing on retaining profit margins, Standard Chartered Bank sets an example for the world by receiving Best Corporate and Employee Citizenship Award (HRM 2008, 2009) and GMR Corporate Social Responsibility award 2008
2. TRIPLE BOTTOM LINE
The triple bottom line captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. Only when an organization takes optimum care of society and environment in process of carrying out its operations it can be sustainable.
2.1 People
The bank has started and extensively supported 3 major campaigns for the benefit of people and community: 1. ‘Seeing is Believing’, it has an ambitious target of restoring the sight of 28,000 people across the world, with 6,500 surgeries having already been performed in India. The screening camps and surgeries have been conducted in partnership with NGOs across India, especially ICARE Hospital in Uttar Pradesh?s Noida, Sankara Nethralaya and Help age India, followed by post-operative check-ups. 2. Living with HIV: The HIV/AIDS pandemic is a global challenge faced by Standard Chartered as a business. Its presence in developing countries, many with increasing infection rates, means HIV has a significant impact on its operations and the
1
communities it operates in. It responds to this challenge through Living with HIV programme, a global policy aimed at protecting basic human rights, promoting the health of its employees and keeping the business costs associated with HIV/AIDS to a minimum. 3. Nets for Life: It is an initiative mainly in African countries which are suffering from epidemic malaria. It aims at providing insecticide treated nets to the community to prevent the spread of malaria. Since its launch in 2006, Nets for Life has saved the lives of approximately 86,000 people, mostly women and children.
2.2 Planet
? Standard Chartered Bank has shown concern for the society by financing only ecofriendly projects. It sometimes takes the pains of going and analysing the impact of the project on environment, thus mitigating climatic change. Inspiring staff to become member of organizations such as “The Climate Group” and Corporate leaders group on climate change While using SCB ATM?s we noticed that during the time of printing the receipts, they display a message that take a print receipt only if it is necessary, you will “Save a Tree”.
? ?
The above are only a few of the steps taken to protect the environment. In all day to day operations SCB takes care that it causes minimum harm to the environment.
2.3 Profit
When a bank takes care of the community, the community takes care of the bank by investing its trust in it. This in turn yields profit. Moreover when bank tries to protect the environment it is actually thinking long term as any negative climatic changes will cause harm to its own customers, thus eroding its profit. Hence, by following triple bottom line approach, Standard Chartered Bank makes profits with long term sustainability.
3. STAKEHOLDER ENGAGEMENT
2
The above diagram represents Standard Chartered approach to stakeholder engagement, where it maps and decides how to responsibly engage all its stakeholders using financial products, contributing to countries with low economic growth and society as a whole. Using this approach the various activities of Standard Chartered under each of its initiatives are outlined below.
3.1 Leading the way for community 3.1.1 Shareholders
The objective of Standard Chartered to do sustainable business is to create long-term shareholder value. Through the „Investor Relations? section of the website www.standardchartered.com, it gives a comprehensive information on the financial reports and the general performance of the company in the stock market. Standard Chartered also holds one-on-one meeting with socially responsible investors on a regular basis to outline the sustainable business strategy of the bank.
3.1.2 Customers
Standard Chartered Bank has been continually improving its customer service. Its customerfocused approach assists them in delivering a sustainable financial performance. It has made a good progress in the consumer banking and delivering standard charter. Through the Charter, Standard Chartered has been able to provide friendly and better service due to the positive implementation of the customer feedback.
3.1.3 Employees
Standard Chartered has a culturally diverse and global workforce, with employees representing over 125 nationalities including a significant number of women. It also focussed on attracting prospective employees with disabilities. Standard introduced various activities to promote employee motivation and productivity. „Happy Fridays/Thursdays? was one such initiative. It also introduced Great Manager Programme to promote the internal talent.
3.1.4 Community
3
Standard Chartered believes it can make the greatest impact through raising awareness in the markets and making a tangible difference to those most vulnerable. Their approach is to maximise the impact of their investment, both through the issues they try to address and by using their core business skills to enable wider involvement. They also actively engage their employees in volunteering activities. Standard Chartered ensured that it integrated its community services with the UN Millennium Development Goals.
MDG
Combat HIV Aids, Malaria and other diseasis Promote Gender equality and empower women Ensure Environmental Sustainability Eradicate extreme hunger and poverty
• COMMUNITY ENGAGEMENT
•NETS FOR LIFE •LIVING WITH HIV •GOAL GIRLS •WOMEN INCLUSION PROGRAMME •SIGNED THE CLIMATE PRINCIPLES •RENEWABLE AND CLEAN TECHNOLOGY •SUPPORTS SME •TECHNICAL ASSISTANCE TO MFI
MDGs targeted by Standard Chartered
3.2 Sustainable Finance
The Equator Principles provide a framework to help banks manage the impacts on society and the environment from infrastructure and other projects that they finance. They were adopted by Standard Chartered in 2003. Standard Chartered follows certain steps in accordance with the Equator Principles before approving loans for any deal: ? Consideration of project and identification of key environmental and social risks. ? It takes advice from external environmental and other consultants on the key issues raised. ? Categorises the project as high, medium or low risk (Category A, B or C). ? Checks whether the project observes the local laws, World Bank guidelines, and the International Finance Corporation?s pollution prevention rules. ? Loan is signed and the funding is approved. ? Quarterly updates to the Wholesale Bank reputation and Responsibility Committee
4. CORPORATE GOVERNANCE
Corporate Governance encompasses commitment to values and to ethical business conduct to maximize shareholder values on a sustainable basis, while ensuring fairness to all stakeholders. Corporate Governance aims at segregating the ownership and management to insure fairness and transparency.
4
4.1 Board of Directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization.
4.1.1 The Board
? ? Standard Chartered has a different Chairman of the Board and CEO. The board has 16 members in all. Out of these 10 are independent non-executive directors which are more than the mandatory 3 as per the Cadbury Committee report.
4.1.2 What does the board do to be effective?
To maintain the effectiveness of the board various measures are in place. ? Diversity - The board reflects diversity both in terms of gender and ethnic background. ? Support - The non-executive directors receive comprehensive intelligence on the economic and competitive landscape. ? Travel - The non-executive directors travel extensively and have the opportunity to validate the strategy and gain an on the ground understanding of the opportunities and risks that we face, engage with local management and country leaders. ? Engagement - To maintain the requisite knowledge and understanding they are provided with a personalized approach to induction, training and development. Each non-executive director agrees an annual individualized engagement plan with the Chairman. ? Meeting with shareholders - All non-executive directors are formally required to meet with major shareholders as part of their induction programmes. The board met with the six investors from the top 20 investors in 2010. ? Evaluation and review - In 2010 an independent and external facilitator, Boardroom Review was commissioned to assist the board with its evaluation and review. The effectiveness of the whole board and that of each director independently was reviewed.
4.1.3 Board meetings and attendance
To ensure proper governance, the board has increased the amount of time a non-executive director puts in to fulfil his obligations. The number of scheduled meetings has been increased to ten. The details of all the meetings taken place over the year and the attendance of all the board members is disclosed to the shareholders in the annual report of the company.
4.1.4 Re-election of Directors
The re-election guidelines laid down by the UK Corporate Governance code according to which non-executive directors have to appear for re-election after three year term are followed. They go through a rigorous review in the process. In the AGM of the company all directors will be proposed for re-election.
4.1.5 Directors? remuneration report
5
A remuneration report is released as a part of the annual report which includes all the findings and actions to be taken by the remuneration committee. In addition, the remuneration details of the Chairman and the non-executive directors are disclosed.
4.2 Board Committees
The Board of Directors performs its various functions through the various committees.
Board Committees
Primary
Enabling
Audit
Board Risk
Brand & Values
Remuneration
Nomination
Governance
Board Committees at Standard Chartered
5. CROSS SECTOR PARTNERSHIPS 5.1 Living with HIV
Standard Chartered launched this initiative as a workplace programme to respond to the detrimental impact HIV and AIDS was having on their employees in Africa. Through Living with HIV, they now work with more than 80 partners in Asia, Africa and the Middle East to raise awareness of the virus among people and communities through face-to-face workshops and online learning.
6
Image: A clip from the video available on SC website that shows interview of a SC employee about her experience in Thailand
5.2 Malaria Capital Campaign
Three major players in the corporate community, Peter Sands (Group Chief Executive of Standard Chartered Bank PLC and Vice Chair of the Global Business Coalition on HIV/AIDS, TB and Malaria), Rex Tillerson (Chairman and CEO of ExxonMobil), and Peter Chernin (President and COO of News Corporation and Chairman of Malaria No More), are teaming up to raise and deploy funds from the private sector as co-chairs of the Malaria Capital Campaign. This is a landmark project, as three leaders in the energy, financial and media industries unite their best practices and core competencies in pursuit of a single common goal: ending malaria deaths.
5.3 Support for Agriculture
As part of its contribution to the agriculture sector, German development finance institute, DEG is partnering with Standard Chartered Bank to support agriculture in sub-Saharan Africa over the next three years. This is part of DEG?s 100, “AgroAfrican” loan programme. To deliver the programme, DEG has for the first time chosen to form a strategic partnership with a commercial bank; Standard Chartered Bank has been selected in this role, being one of the leading banks for structured financing in Africa.
5.4 Environmental Inclusion
On December 2, 2009, Standard Chartered Bank announced an important partnership with the British Council of Nigeria, aiming to raise awareness around climate change, and what it means for Nigeria. In response to the British Council?s 2008 research on knowledge and perception of climate change in Nigeria, which demonstrated a low level of awareness throughout society, SC has teamed up with them to run an awareness raising campaign. In doing this, SC hope to encourage the inclusion of environmentally conscious actions into the daily lives of the Nigerian population.
7
5.5 Eradication of Poverty
Standard Chartered, though based in the UK, operates largely in developing markets many of which face serious poverty-related issues. The Bank has a long history of actively supporting the communities in which its customers and staff live and from which it derives its profits. “Issue of poverty has direct economic impact on business. If we are able to remove people from poverty they potentially become a viable customer of the bank,” says, Chris Smith.
6. Standard Chartered CSR- Analysis and Viewpoint 6.1 Virtue matrix model
The virtue matrix model can be used to evaluate the CSR activities of a company and identify future strategies. This model was put forward by Roger Martin - Dean, Rotman School of Management, University of Toronto.
Frontiers
Strategic Frontier
? ? ? $4.98bn mobilized towards the renewable energy market $180 million to microfinance institutions. A structured finance warehouse deal in Zambia, benefiting around 300,000 small-scale farmers Africa partnership with telecom operators for money transfers. Trained SMEs in Pakistan and Kenya Women in Business online resource launched in May 2010. Initiated Climate Principles across full range of financial products.
Structural Frontier
? ? ? ? ? 20 million beneficiaries through Seeing is Believing 1.6 million people educated on HIV/AIDS Goal program helped 12,000 girls in 2010 across 4 countries. Nets for Life 3.7 million received nets and malaria awareness. Here for good campaign.
? ? ? ? ?
Compliance
? ? ? ? ? In 2010, Tier 1 ratio was 14.0 per cent. Compensation structure guards against excessive risk-taking. 14 lending position statements implemented. 65,698 employees completed antimoney laundering eLearning Norkom monitoring system to auto detect money laundering ? ? ?
Choice
Women represent 45 per cent of staff in 2010. SME lending - $4 billion in 2010. Up 32 per-cent. Mortgage lending - Increase of $13 billion in mortgage lending Increase customer satisfaction satisfaction index up 50%. Employee engagement - Q12 staff engagement score of 7.381
8
? ?
Virtual Matrix Model
6.2 Virtue matrix model assessment
After the mapping we can observe that SCB is a front runner in both the aspects of Civil Foundation. The bank also has released actual performance vis-à-vis targets for the various programs initiated to measure progress continuously. However, in case of Strategic Frontier most of the banks activities are focused on lending activities for sustainability. The bank can undertake a joint effort for inclusive banking for the underprivileged. Majority of the populace is under this category and as SCB focus is on Asia, Africa and Middle East it should be a forerunner in this area. For ex. RBI has mandated that 25% of the new bank branches should be in unbanked areas. Instead of responding to regulatory measures SCB could take a proactive approach for inclusive banking. As part of Structural Frontier the bank can form an association to frame effective set of parameters to evaluate microfinance institutions. Although SCB was part of Microfinance Transparency Groups Transparent Pricing Initiative in India the MFI industry went through a very troubled phase after Andhra Pradesh government made repayment of loans optional. SKS Microfinance received a large investment from Standard Chartered and was involved in controversy of employing strong arm tactics for loan recovery. There is still ample scope for the banks to identify sectors where they being the majority lender can have more say in the operations of the debtors.
6.3 Critical analysis of Standard Chartered CSR policies
? Standard Chartered Bank is along with other global banks when it comes to employee relations, environment policies, lending to MFI and customer satisfaction initiatives. This also is supported by the fact that DJSI and FTSE4Good have consistently delivered better returns than the respective index every year and Standard Chartered Bank is there in both the index. SCB has also improved its customer satisfaction scores and employee engagement scores.
9
?
In 2010, SCB launched “Here for Good” campaign in which the bank committed to create a positive impact on the economy and the community where it operates. This campaign encompasses not only customers but also staff, clients and other stakeholders. As an example of this the bank continued to increase SME lending and mortgage portfolio even during the financial downturn of 2008-09. One of the most commendable CSR activities is facilitation of women entrepreneurs across Africa, India and Bangladesh. This has been replicated successfully in different geographies and is unique to SCB. In spite of all these SCB still lags in certain areas. A majority of projects that received funding from SCB belong to Category A – high risk category based on Equator principles. The percentage of funds employed in Category A projects is also quite high when compared to projects in Category B and C. The lending portfolio of SCB is approximately $300 billion. Comparing this figure with its investment in clean energy ($4.89 billion) and microfinance ($180 million) reveals that though individually the amounts look substantial they are miniscule when compared to actual loan portfolio of the bank. SCB can also focus on financial inclusion in a much broader aspect. It fares poorly when it comes to providing basic bank accounts and financial education. With Africa, Asia and Middle East tapping unbanked customers through innovative measure like partnership with postal departments can turn beneficial down the line. With wide international expertise it has not been able to replicate successful MFI models in all regions. For ex. SCB has invested substantially in India MFI and was unable to foresee the sector heading into trouble. In contrast, SCB operates successful MFI partnerships in Africa and it can impart key learning across both the regions.
?
?
Thus, to conclude, Standard Chartered Bank has shown how a bank with sustainability as an integral part of its vision can sustain growth and at the same time not compromise on shareholder returns albeit with ample scope for improvement.
10
doc_821740776.docx
The documentation on the need of CSR for banks and reviews the sustainability report of standard chartered.
CSR WRITTEN ASSIGNMENT REVIEW OF SUSTAINABILITY REPORT
1. INTRODUCTION 1.1 Why Banks Need CSR??
Say for example, banks lend just to anyone without checking the credibility, without checking the impact of their financing on the environment. The result is nothing but high climatic changes and recession due to increasing defaulters. This clearly shows that if banks do not follow their corporate social responsibility as a trade of for short term gains, they will be digging a grave for themselves in long term. Moreover, trust of people invested in the banks decreases, thus eroding their profits. Hence, CSR is very important for them to sustain.
1.2 History
Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. From the early 1990s, Standard Chartered has focused on developing its strong franchises in Asia, Africa and the Middle East. It has concentrated on consumer, corporate and institutional banking and on the provision of treasury services - areas in which the Group had particular strength and expertise. One important thing to notice is that even in the years of recession when everyone was cost cutting and focussing on retaining profit margins, Standard Chartered Bank sets an example for the world by receiving Best Corporate and Employee Citizenship Award (HRM 2008, 2009) and GMR Corporate Social Responsibility award 2008
2. TRIPLE BOTTOM LINE
The triple bottom line captures an expanded spectrum of values and criteria for measuring organizational (and societal) success: economic, ecological and social. Only when an organization takes optimum care of society and environment in process of carrying out its operations it can be sustainable.
2.1 People
The bank has started and extensively supported 3 major campaigns for the benefit of people and community: 1. ‘Seeing is Believing’, it has an ambitious target of restoring the sight of 28,000 people across the world, with 6,500 surgeries having already been performed in India. The screening camps and surgeries have been conducted in partnership with NGOs across India, especially ICARE Hospital in Uttar Pradesh?s Noida, Sankara Nethralaya and Help age India, followed by post-operative check-ups. 2. Living with HIV: The HIV/AIDS pandemic is a global challenge faced by Standard Chartered as a business. Its presence in developing countries, many with increasing infection rates, means HIV has a significant impact on its operations and the
1
communities it operates in. It responds to this challenge through Living with HIV programme, a global policy aimed at protecting basic human rights, promoting the health of its employees and keeping the business costs associated with HIV/AIDS to a minimum. 3. Nets for Life: It is an initiative mainly in African countries which are suffering from epidemic malaria. It aims at providing insecticide treated nets to the community to prevent the spread of malaria. Since its launch in 2006, Nets for Life has saved the lives of approximately 86,000 people, mostly women and children.
2.2 Planet
? Standard Chartered Bank has shown concern for the society by financing only ecofriendly projects. It sometimes takes the pains of going and analysing the impact of the project on environment, thus mitigating climatic change. Inspiring staff to become member of organizations such as “The Climate Group” and Corporate leaders group on climate change While using SCB ATM?s we noticed that during the time of printing the receipts, they display a message that take a print receipt only if it is necessary, you will “Save a Tree”.
? ?
The above are only a few of the steps taken to protect the environment. In all day to day operations SCB takes care that it causes minimum harm to the environment.
2.3 Profit
When a bank takes care of the community, the community takes care of the bank by investing its trust in it. This in turn yields profit. Moreover when bank tries to protect the environment it is actually thinking long term as any negative climatic changes will cause harm to its own customers, thus eroding its profit. Hence, by following triple bottom line approach, Standard Chartered Bank makes profits with long term sustainability.
3. STAKEHOLDER ENGAGEMENT
2
The above diagram represents Standard Chartered approach to stakeholder engagement, where it maps and decides how to responsibly engage all its stakeholders using financial products, contributing to countries with low economic growth and society as a whole. Using this approach the various activities of Standard Chartered under each of its initiatives are outlined below.
3.1 Leading the way for community 3.1.1 Shareholders
The objective of Standard Chartered to do sustainable business is to create long-term shareholder value. Through the „Investor Relations? section of the website www.standardchartered.com, it gives a comprehensive information on the financial reports and the general performance of the company in the stock market. Standard Chartered also holds one-on-one meeting with socially responsible investors on a regular basis to outline the sustainable business strategy of the bank.
3.1.2 Customers
Standard Chartered Bank has been continually improving its customer service. Its customerfocused approach assists them in delivering a sustainable financial performance. It has made a good progress in the consumer banking and delivering standard charter. Through the Charter, Standard Chartered has been able to provide friendly and better service due to the positive implementation of the customer feedback.
3.1.3 Employees
Standard Chartered has a culturally diverse and global workforce, with employees representing over 125 nationalities including a significant number of women. It also focussed on attracting prospective employees with disabilities. Standard introduced various activities to promote employee motivation and productivity. „Happy Fridays/Thursdays? was one such initiative. It also introduced Great Manager Programme to promote the internal talent.
3.1.4 Community
3
Standard Chartered believes it can make the greatest impact through raising awareness in the markets and making a tangible difference to those most vulnerable. Their approach is to maximise the impact of their investment, both through the issues they try to address and by using their core business skills to enable wider involvement. They also actively engage their employees in volunteering activities. Standard Chartered ensured that it integrated its community services with the UN Millennium Development Goals.
MDG
Combat HIV Aids, Malaria and other diseasis Promote Gender equality and empower women Ensure Environmental Sustainability Eradicate extreme hunger and poverty
• COMMUNITY ENGAGEMENT
•NETS FOR LIFE •LIVING WITH HIV •GOAL GIRLS •WOMEN INCLUSION PROGRAMME •SIGNED THE CLIMATE PRINCIPLES •RENEWABLE AND CLEAN TECHNOLOGY •SUPPORTS SME •TECHNICAL ASSISTANCE TO MFI
MDGs targeted by Standard Chartered
3.2 Sustainable Finance
The Equator Principles provide a framework to help banks manage the impacts on society and the environment from infrastructure and other projects that they finance. They were adopted by Standard Chartered in 2003. Standard Chartered follows certain steps in accordance with the Equator Principles before approving loans for any deal: ? Consideration of project and identification of key environmental and social risks. ? It takes advice from external environmental and other consultants on the key issues raised. ? Categorises the project as high, medium or low risk (Category A, B or C). ? Checks whether the project observes the local laws, World Bank guidelines, and the International Finance Corporation?s pollution prevention rules. ? Loan is signed and the funding is approved. ? Quarterly updates to the Wholesale Bank reputation and Responsibility Committee
4. CORPORATE GOVERNANCE
Corporate Governance encompasses commitment to values and to ethical business conduct to maximize shareholder values on a sustainable basis, while ensuring fairness to all stakeholders. Corporate Governance aims at segregating the ownership and management to insure fairness and transparency.
4
4.1 Board of Directors
A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization.
4.1.1 The Board
? ? Standard Chartered has a different Chairman of the Board and CEO. The board has 16 members in all. Out of these 10 are independent non-executive directors which are more than the mandatory 3 as per the Cadbury Committee report.
4.1.2 What does the board do to be effective?
To maintain the effectiveness of the board various measures are in place. ? Diversity - The board reflects diversity both in terms of gender and ethnic background. ? Support - The non-executive directors receive comprehensive intelligence on the economic and competitive landscape. ? Travel - The non-executive directors travel extensively and have the opportunity to validate the strategy and gain an on the ground understanding of the opportunities and risks that we face, engage with local management and country leaders. ? Engagement - To maintain the requisite knowledge and understanding they are provided with a personalized approach to induction, training and development. Each non-executive director agrees an annual individualized engagement plan with the Chairman. ? Meeting with shareholders - All non-executive directors are formally required to meet with major shareholders as part of their induction programmes. The board met with the six investors from the top 20 investors in 2010. ? Evaluation and review - In 2010 an independent and external facilitator, Boardroom Review was commissioned to assist the board with its evaluation and review. The effectiveness of the whole board and that of each director independently was reviewed.
4.1.3 Board meetings and attendance
To ensure proper governance, the board has increased the amount of time a non-executive director puts in to fulfil his obligations. The number of scheduled meetings has been increased to ten. The details of all the meetings taken place over the year and the attendance of all the board members is disclosed to the shareholders in the annual report of the company.
4.1.4 Re-election of Directors
The re-election guidelines laid down by the UK Corporate Governance code according to which non-executive directors have to appear for re-election after three year term are followed. They go through a rigorous review in the process. In the AGM of the company all directors will be proposed for re-election.
4.1.5 Directors? remuneration report
5
A remuneration report is released as a part of the annual report which includes all the findings and actions to be taken by the remuneration committee. In addition, the remuneration details of the Chairman and the non-executive directors are disclosed.
4.2 Board Committees
The Board of Directors performs its various functions through the various committees.
Board Committees
Primary
Enabling
Audit
Board Risk
Brand & Values
Remuneration
Nomination
Governance
Board Committees at Standard Chartered
5. CROSS SECTOR PARTNERSHIPS 5.1 Living with HIV
Standard Chartered launched this initiative as a workplace programme to respond to the detrimental impact HIV and AIDS was having on their employees in Africa. Through Living with HIV, they now work with more than 80 partners in Asia, Africa and the Middle East to raise awareness of the virus among people and communities through face-to-face workshops and online learning.
6
Image: A clip from the video available on SC website that shows interview of a SC employee about her experience in Thailand
5.2 Malaria Capital Campaign
Three major players in the corporate community, Peter Sands (Group Chief Executive of Standard Chartered Bank PLC and Vice Chair of the Global Business Coalition on HIV/AIDS, TB and Malaria), Rex Tillerson (Chairman and CEO of ExxonMobil), and Peter Chernin (President and COO of News Corporation and Chairman of Malaria No More), are teaming up to raise and deploy funds from the private sector as co-chairs of the Malaria Capital Campaign. This is a landmark project, as three leaders in the energy, financial and media industries unite their best practices and core competencies in pursuit of a single common goal: ending malaria deaths.
5.3 Support for Agriculture
As part of its contribution to the agriculture sector, German development finance institute, DEG is partnering with Standard Chartered Bank to support agriculture in sub-Saharan Africa over the next three years. This is part of DEG?s 100, “AgroAfrican” loan programme. To deliver the programme, DEG has for the first time chosen to form a strategic partnership with a commercial bank; Standard Chartered Bank has been selected in this role, being one of the leading banks for structured financing in Africa.
5.4 Environmental Inclusion
On December 2, 2009, Standard Chartered Bank announced an important partnership with the British Council of Nigeria, aiming to raise awareness around climate change, and what it means for Nigeria. In response to the British Council?s 2008 research on knowledge and perception of climate change in Nigeria, which demonstrated a low level of awareness throughout society, SC has teamed up with them to run an awareness raising campaign. In doing this, SC hope to encourage the inclusion of environmentally conscious actions into the daily lives of the Nigerian population.
7
5.5 Eradication of Poverty
Standard Chartered, though based in the UK, operates largely in developing markets many of which face serious poverty-related issues. The Bank has a long history of actively supporting the communities in which its customers and staff live and from which it derives its profits. “Issue of poverty has direct economic impact on business. If we are able to remove people from poverty they potentially become a viable customer of the bank,” says, Chris Smith.
6. Standard Chartered CSR- Analysis and Viewpoint 6.1 Virtue matrix model
The virtue matrix model can be used to evaluate the CSR activities of a company and identify future strategies. This model was put forward by Roger Martin - Dean, Rotman School of Management, University of Toronto.
Frontiers
Strategic Frontier
? ? ? $4.98bn mobilized towards the renewable energy market $180 million to microfinance institutions. A structured finance warehouse deal in Zambia, benefiting around 300,000 small-scale farmers Africa partnership with telecom operators for money transfers. Trained SMEs in Pakistan and Kenya Women in Business online resource launched in May 2010. Initiated Climate Principles across full range of financial products.
Structural Frontier
? ? ? ? ? 20 million beneficiaries through Seeing is Believing 1.6 million people educated on HIV/AIDS Goal program helped 12,000 girls in 2010 across 4 countries. Nets for Life 3.7 million received nets and malaria awareness. Here for good campaign.
? ? ? ? ?
Compliance
? ? ? ? ? In 2010, Tier 1 ratio was 14.0 per cent. Compensation structure guards against excessive risk-taking. 14 lending position statements implemented. 65,698 employees completed antimoney laundering eLearning Norkom monitoring system to auto detect money laundering ? ? ?
Choice
Women represent 45 per cent of staff in 2010. SME lending - $4 billion in 2010. Up 32 per-cent. Mortgage lending - Increase of $13 billion in mortgage lending Increase customer satisfaction satisfaction index up 50%. Employee engagement - Q12 staff engagement score of 7.381
8
? ?
Virtual Matrix Model
6.2 Virtue matrix model assessment
After the mapping we can observe that SCB is a front runner in both the aspects of Civil Foundation. The bank also has released actual performance vis-à-vis targets for the various programs initiated to measure progress continuously. However, in case of Strategic Frontier most of the banks activities are focused on lending activities for sustainability. The bank can undertake a joint effort for inclusive banking for the underprivileged. Majority of the populace is under this category and as SCB focus is on Asia, Africa and Middle East it should be a forerunner in this area. For ex. RBI has mandated that 25% of the new bank branches should be in unbanked areas. Instead of responding to regulatory measures SCB could take a proactive approach for inclusive banking. As part of Structural Frontier the bank can form an association to frame effective set of parameters to evaluate microfinance institutions. Although SCB was part of Microfinance Transparency Groups Transparent Pricing Initiative in India the MFI industry went through a very troubled phase after Andhra Pradesh government made repayment of loans optional. SKS Microfinance received a large investment from Standard Chartered and was involved in controversy of employing strong arm tactics for loan recovery. There is still ample scope for the banks to identify sectors where they being the majority lender can have more say in the operations of the debtors.
6.3 Critical analysis of Standard Chartered CSR policies
? Standard Chartered Bank is along with other global banks when it comes to employee relations, environment policies, lending to MFI and customer satisfaction initiatives. This also is supported by the fact that DJSI and FTSE4Good have consistently delivered better returns than the respective index every year and Standard Chartered Bank is there in both the index. SCB has also improved its customer satisfaction scores and employee engagement scores.
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In 2010, SCB launched “Here for Good” campaign in which the bank committed to create a positive impact on the economy and the community where it operates. This campaign encompasses not only customers but also staff, clients and other stakeholders. As an example of this the bank continued to increase SME lending and mortgage portfolio even during the financial downturn of 2008-09. One of the most commendable CSR activities is facilitation of women entrepreneurs across Africa, India and Bangladesh. This has been replicated successfully in different geographies and is unique to SCB. In spite of all these SCB still lags in certain areas. A majority of projects that received funding from SCB belong to Category A – high risk category based on Equator principles. The percentage of funds employed in Category A projects is also quite high when compared to projects in Category B and C. The lending portfolio of SCB is approximately $300 billion. Comparing this figure with its investment in clean energy ($4.89 billion) and microfinance ($180 million) reveals that though individually the amounts look substantial they are miniscule when compared to actual loan portfolio of the bank. SCB can also focus on financial inclusion in a much broader aspect. It fares poorly when it comes to providing basic bank accounts and financial education. With Africa, Asia and Middle East tapping unbanked customers through innovative measure like partnership with postal departments can turn beneficial down the line. With wide international expertise it has not been able to replicate successful MFI models in all regions. For ex. SCB has invested substantially in India MFI and was unable to foresee the sector heading into trouble. In contrast, SCB operates successful MFI partnerships in Africa and it can impart key learning across both the regions.
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Thus, to conclude, Standard Chartered Bank has shown how a bank with sustainability as an integral part of its vision can sustain growth and at the same time not compromise on shareholder returns albeit with ample scope for improvement.
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