Corporate social responsibility is not new to European savings banks. They have a historical commitment to making a contribution to their local communities. Chris De Noose reports.
European savings banks have a long-standing social commitment that can be traced back to their original raison d’être of enabling the social advancement of the lower classes. This was their rationale for a long time, until a new emphasis was introduced in the early 19th century that savings help stabilise the social order.
Savings banks’ commitment to social causes holds fast today, and is central to such institutions’ philosophy. Throughout Europe, savings banks share a common approach to banking – such as strong ties with the local community, a positive attitude to including all customers (not excluding certain categories), together with the conviction that banks have a social responsibility to fulfil. Savings banks embody a ‘stakeholder’ model of banking, seeking to bring value and returns to all stakeholders in the markets in which they operate (investors, suppliers, customers, employees and the local community).
Shared profits
These objectives are balanced with a goal common to all for-profit financial institutions: to achieve the highest possible levels of efficiency and returns to provide clients with products and services at competitive prices. Add to this the fact that the social commitment of several savings banks includes contributing a proportion of profits to social causes, increasing these profits means a larger contribution can be invested in such activities. The business motives are therefore part of the savings banks’ approach to socially responsible activities.
Savings banks’ commitment is expressed in different ways from one country to the other, reflecting Europe’s diverse legal and social traditions. In Italy, for example, foundations play a major role in projects to preserve and promote the country’s cultural heritage. Foundations also carry most of the savings banks’ projects in Sweden. In Spain, the savings banks’ model enables them to devote a substantial part of their profits to the Obra Social, whose allocation, distribution, policy and administration are decided independently by the savings bank. The Obra Social has a significant impact on Spanish society and creates wealth and jobs. Research shows that every Spanish citizen comes into contact with the activities of the Obra Social, which created more than 26,000 jobs in 2004, at least three times a year.
The German savings banks also express their close ties and solidarity with the masses through their strong involvement in establishing foundations. These are Germany’s most important and oldest donors, with more than 500 foundations throughout the country, operating in all spheres of social life.
One area where German savings banks’ socially committed activities are expressed is the Geld und Haushalt initiative, a project created in 1958 that aims to offer private households methods for better financial management and for the prevention of excessive debt.
Finances et Pédagogie in France is a similar initiative. Established in 1957, this certified training entity offers financial education and combats over-indebtedness and financial exclusion through its involvement in social insertion and cohesion programmes.
The French savings banks have also launched the ‘projets d’économie locale et sociale’ (local and social economy projects), through which they finance local projects to foster business or economic value and support people in fragile social situations.
Social cohesion
Whatever the variety of methods used in carrying out socially responsible activities, they all provide value and positive outcome for social cohesion. The long-standing, locally rooted and sustainable social investment projects carried out by European savings banks, which constitute a direct return to society and to the economy, should be recognised, encouraged and promoted.
Thanks to the publication by various national savings banks of reports outlining the CSR activities of savings banks in their own markets, the general public and interested parties have easy access to transparent, updated and accurate information about their involvement and the impact of the processes and projects launched in the various CSR fields.
Chris De Noose is chairman of the ESBG/WSBI management committee.
