There are so many theoretical definitions for ethical banking, everything from being environmentally friendly, having a net-neutral carbon footprint, not doing businesses with partners who are involved in non-sustainable sectors, investing back into the community, or operating on behalf of members.

Most of these can be found in a company’s Corporate Social Responsibility (CSR) manifesto, as it has become an essential part of managing a banks brand perception. These all sound very noble but are these causes just ticks-in-boxes designed to signal the “right” perception or is there some substance behind the rhetoric.

Consumers are savvy when it comes to distinguishing between, a hollow marketing message on delivering social well-being from a genuine contribution towards overall societal and planetary health. When it comes to Ethical Banking, there is no magical formula that states what combination of activity determines ethical operation, and now more than ever there is a need to re-think what doing business in the right way means today. A working framework to help navigate how to reframe the CSR for genuine betterment, which is measurable, could include some of the following 3 considerations:

1.Environmental

This consideration is geared around structuring business decisions in a way that also align with protecting the Earth’s Climate from further, irreversible, damage. Conducting business in a carbon-neutral manner and minimising natural resources utilisation across the business processes. In banking we still see far too much paper! Despite a good number of global banks running paper reduction initiatives.

Additionally, what the COVID pandemic has shown us, is that it is possible to work from anywhere while travel restrictions remain in play into 2021. A conscious effort to balance virtual and physical interactions become key as we move forward; one cannot replace the other, and a sensible balance is needed. Some further thinking in this area could also include other factors that further drive this agenda, namely…

• Fixing the basics; some have been mentioned in the form of avoiding paper and being more discerning when it comes to business travel. Managing energy utilised across the entire business infrastructure
• Introduce specific Key Performance Indicators (KPIs) that monitor progress, making it easier to focus on actions that will make a bigger difference
• Messaging the intent across the whole organisation is key; this is top down and needs to be presented as a new way of working, thinking and pivoting culture as opposed to a standalone initiative
• Propose all these ideas to partners who you work with, across the entire supply chain. Therefore, becoming a wider influencer of change that helps with the pay-it-forward principle
• Co-opt customers into your vision so they understand exactly why you are operating the way you are, and are able to identify why they should continue to use your bank or organisation 

2.Community Centricity

Initiatives here centre around driving positive change for people who make up the community in which a business exists. Several of the initiatives under this banner normally appear as part of a company’s CSR agenda. Not only are these initiatives vital for making a difference to the population who are served by banks, but they also make a difference as to how a bank is perceived on an ethical level.

It has become more commonplace for job seekers to look at a company’s CSR strategy when deciding whether to apply to join the organisation. This consideration is increasingly important for the Gen Y employees and becomes a key cornerstone for companies when looking at attracting and retaining top talent. All individuals need to feel that they are contributing to a wider purpose than just generating revenue, and a well thought through and “real” CSR programme can drive a level of connection with employees and communities that benefits all.

Several approaches have been seen in action that support these aims:

• Driving initiatives that support local businesses. This could be via offerings, education and overall support in surviving and thriving in challenging times
• Injecting funding into areas that help vulnerable people through working with a number of charities to help accelerate existing efforts
• Supporting Food Banks, and just volunteering to help in times of crisis, such as we have experienced over the last 10 months
• Supporting digital inclusivity by offering education or equipment to individuals that may not have had that opportunity or availability previously. Staying connected, and having the ability to understand how that can be done is key, when people are not able to meet face to face

  3.Education, Diversity & Talent     A study conducted by Manpower Group in 2019 illustrated challenges with Global Talent, with the deficit doubling over the last decade.

“54% of companies report skills shortages with businesses in 36 of 44 countries finding it more difficult to attract skilled talent than in 2018. Employers in the U.S. (69%), Mexico (52%) Italy (47%) and Spain (41%) report the most acute shortages”  -   Manpower, January 2020

This becomes a serious concern as the nature of work changes, with the advent of more technology-assisted job functions. This is also perhaps one the areas that can be tackled more easily as the challenges and opportunities are easier to spot. If we specifically think about education, skills and talent in the context of digital technologies that underpin many professions going forward, a series of small actions can yield significant benefits, a small sample of which could include:

• Ability to donate organisational time to free courses that can be run for all segments of the community. Or even launching education portals than can enable more individuals to access content
• Supporting digital learning through active involvement with the education sector to drive awareness of the options available, or potential career paths. Particularly with the advent of AI, programming becomes a vital consideration for an education programme. We have also seen a very conscious move by several countries globally to make things like K-12 Computer Science mandatory
• Creating apprenticeship schemes directed toward formal educational qualifications and experience. Co-creating programmes with schools, colleges and universities to drive the aim of getting more home-grown talent into emergent sectors
• Calibrating work environments, and ways of working to cater for the differing requirements across a diverse workforce. One size does not fit all in this case, and it is vital to understand this if any organisation is going to manage its skills gap
• Supporting diversity in a constructive way and supporting a more inclusive work culture. This is not about managing quotas but carefully managing the balance of teams to ensure that there is benefit for the organisation from having diversity (in the form of mindset and thinking style), and also helping individuals to do their best work and grow professionally

The 3 considerations presented here are not exhaustive, and merely aim to scratch the surface, and stimulate thinking, of what it really means to operate in the right way in banking today.  In my view this framework is a start point, not an end point and serves to be more of a compass when it comes to thinking about authentically positioning to become an Ethical Bank.

We should note that some players have already paved the way for others, and we have much to learn from CSR pioneers like Triodos, Spring Bank and the Co-Op Bank. There is much work to do in this space, but this also means we have much value to add across our communities and for our environment.

With great power we see within banks, comes great responsibility. Hence, there is an even bigger call to action to make sure responsibility is front and centre of mind, all the time, not just at times of needing a PR push!