Venue & Date
Introduction to Credit Union
Social Responsibility
Presenter
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Introduction
1. What is CSR?
2. Why have a CSR strategy in place?
3. How to implement a CSR strategy?
4. Who is currently practicing CSR?
5. Where to go for more information?
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1. What is Corporate Social Responsibility?
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History & Terminology
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Rooted in the evolution of commerce
Credit Union Social Responsibility notes the unique approach of credit
unions
Many terms in use, for example:
o Corporate social responsibility/Corporate responsibility
o Corporate citizenship
o Sustainability
o People, planet, profits
o Sustainable development
o Environmental, Social, Governance (ESG) (investor terminology)
o Triple bottom line
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Definition
CSR is:
The balanced integration of social, environmental and economic factors in
business decision making, including governance, strategy, and operations
while taking stakeholder interests into account.
In essence, Credit Union Social Responsibility
is about managing a credit union’s social and
environmental performance to reduce its
negative and enhance its positive impacts.
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Sustainable Finance
• For financial institutions, CSR incorporates
social and environmental considerations into
financial products and services (banking,
insurance and asset management), and is
often referred to as “sustainable finance.”
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CSR Practice Areas
1. Governance, ethics and management
systems
2. Environment
3. Community involvement
4. Employee relations
5. Member (customer) relations
6. Products and services
7. Supplier and business partner relations
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CSR Practices Continue
8. Human rights
9. Aboriginal relations (where relevant)
10.Communications
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Stages of CSR
Stage 1: Pre-CSR
• No consideration of environmental or social impacts or role
Stage 2: Basic
• Takes an ad hoc approach to CSR; primarily focuses on philanthropy
plus some basic environmental steps such as recycling.
Stage 3: Proactive
• Invests in a few CSR initiatives where it can reduce costs, foster
employee engagement and build brand.
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Stages of CSR Continue
Stage 4: Integrated
• CSR is embedded across the organization through policies, procedures
and practices; CSR goals are incorporated into business strategies.
Stage 5: Mission-Driven
• The business purpose is to improve social and environmental
conditions.
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CSR Leadership
1. House in Order
2. Products and Services
3. Investments and Procurement
4. Stakeholder Engagement
5. Advocacy
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CUCC Position Statement
Canadian Central’s Board of Directors adopted
four principles to guide its work to help member
Centrals and Canada’s credit unions to “build
stronger, more sustainable communities”:
1)
2)
3)
4)
Demonstrating co-operative and sustainable governance
Promoting social inclusion and diversity
Fostering economic development
Encouraging environmental sustainability
CC Position Statement
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International Co-operative Principles
International Co-operative Principle 7:
Concern for Community
“Co-operatives work for the sustainable development of their communities
through policies approved by their members.”
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International Standards for CSR
International Organization For Standardization
(ISO) adopted CSR guidelines in 2010
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Referred to as ISO 26000: “Guidance on Social Responsibility”
Seven ISO principles of social responsibility:
1.
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5.
6.
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Accountability
Transparency
Ethical behaviour
Respect for stakeholder interests
Respect for the rule of law
Respect for international norms of behaviour
Respect for human rights
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Summary
• No single term or standard definition for CSR
• Credit Union Social Responsibility is about
managing your social and environmental
performance to reduce your negative and
enhance your positive impacts
• Aligned with CUCC and international cooperative principles
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Summary Continue
• A natural fit for Canadian credit unions
• It is important to understand the scope of
CSR to make an informed business decision
regarding focus and strategic priorities
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2. Why have a CSR Strategy?
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Drivers of CSR Trends
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Campaigning NGOs (non-governmental organizations)
Rise in government and regulatory standards
Investors seeking improved ESG performance
Globalization of corporations
Instant worldwide communications
Supply chains and increasing CSR demands of purchasers
Niche innovating sectors
Rising customer and employee expectations
Growing resource scarcity
Rising poverty levels
Corporate scandals
Trade associations
Growing awareness of the business case
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CSR Trends
Companies are:
• Adopting CSR commitments and policies
• Taking a catalytic role within their spheres of influence
• Implementing 3 – 5 year CSR strategies
• Disclosing their CSR performance in CSR reports
• Creating board CSR committees
• Assigning accountability to a senior staff person reporting to a CEO
• Supporting internal CSR or green teams and training staff on CSR
• Incorporating CSR into their performance management systems
• Offering CSR oriented products and services
• Perceiving CSR as a risk management and business strategy issue
• Key priorities are often climate change and poverty/social inclusion
• Redesigning community programs to be more “strategic”
• Consulting stakeholders in developing CSR strategies
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International FI Network
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Nearly 200 financial institutions (banks, insurers and fund managers) from
around the world are signatories to the United Nations Statement by
Financial Institutions on the Environment & Sustainable Development.
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Committing to make the economy and lifestyles sustainable and integrate
environmental considerations in their operations.
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Network is a resource to financial institutions to help them improve their
CSR performance.
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Includes the five major Canadian banks, Desjardins and
The Co-operators.
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CSR Product Array
Social Products
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Financing for affordable housing
Products tailored to Aboriginal and other underserved groups
Micro-credit financing for community economic development
Term deposits that finance community development
Green Products
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Green mortgages and home improvement loans
Green car loans
Green credit cards
Term deposits that finance environmental initiatives
Green car and home insurance
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CSR Product Array Continue
Green Products Continue
• Financing for environmental businesses and eco-advice services
• Business loans for eco-efficiency retrofits, fuel efficient fleets, etc.
• Socially responsible investments
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CSR Business Case
Top-line benefits: Generating Growth
Opportunities
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Attract and retain customers
Improve employee morale and productivity
Enhance and maintain competitive advantage
Foster innovation and opportunity creation, including new business
lines and new products and services
• Build and sustain positive brand and reputation
• Build and sustain social license to operate
• Improve access to capital
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CSR Business Case Continue
Bottom-line benefits: enhancing operational
efficiency
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Avoid and reduce operating costs
Improve recruitment and retention of talented employees
Manage risk
Forestall further government regulation
Improve management quality
Enhance supply chain management
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Competitor Scan
CSR management systems:
• Banks are designating lead staff and departments to be responsible for
CSR strategy and implementation
• They are implementing comprehensive CSR strategies
• They are reporting on their CSR performance
• They are becoming more strategic in their community investments and
developing environmental action plans to reduce their environmental
footprints
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Competitor Scan Continue
Community and social priorities include:
• Financial literacy projects
• Multicultural and Aboriginal banking
• Accessibility of banking services to people with disabilities
Environmental priorities include:
• Implementing environmental policies and strategies; designating key
staff with environmental responsibilities
• Building or renovating green buildings / branches
• Reducing energy use and GHG emissions and sourcing renewable
energy
• Reducing paper
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Competitor Scan Continue
“Blended” priorities include:
• Providing environmental grants to community groups
• Implementing sustainable purchasing
• Offering Socially Responsible Investment (SRI) products
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Summary
• CSR is becoming mainstream amongst most
sectors, including financial institutions.
• CSR oriented companies are implementing
CSR strategies and integrating CSR into
operations.
• Canadian banks are implementing well
thought CSR strategies.
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Summary Continue
• A CSR strategy can generate business
benefits, though this is not the only rationale
for adopting CSR: some do it because it is a
core credit union value.
• Reasons for managing CSR performance
include:
o Core credit union value
o Maintain competitive advantage
o Generate business benefits
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3. How To Implement a CSR strategy?
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CSR Strategy Development
Phase One: Commitment and Gap Analysis
1.Define CSR and agree on the business case and rationale.
2.Adopt and communicate CSR vision and policy.
3.Assess baseline (e.g. existing programs) and current practices.
4.Research best practices and understand stakeholder priorities and key
sustainability impacts and risks.
5.Conduct gap and opportunity analysis.
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CSR Strategy Development Continue
Phase Two: Develop Strategy
1. Develop long-term CSR vision (10 years).
2.Develop medium-term CSR goals and targets (3 – 5 years) and one
year business plan.
3. Develop key performance indicators to measure progress.
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CSR Strategy Development Continue
Phase Three: Implement, Measure and
Report
1.Assign responsibilities and resources.
2.Establish steering committee to monitor implementation.
3.Integrate into performance systems and training.
4.Regularly review performance.
5.Communicate progress on performance.
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Common Practice Areas
1. Community (Aboriginal business, accessibility, financial literacy, community
economic development)
2. Employees (Diversity management, work life balance, healthy lifestyles)
3. Environment (Energy, GHG emissions, green buildings, waste, water and
paper)
4. Suppliers (Sustainable purchasing)
5. Products (see earlier slide)
6. CSR management and reporting systems
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Role of The Board of Directors
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Approve CSR mission, vision, values
Adopt CSR strategy and provide oversight over implementation
Monitor CSR policy compliance and integration
Integrate CSR into CEO performance plan and recruitment
Consider CSR trends that impact the credit union and integrate into
enterprise risk management
Monitor stakeholder relations
Foster board diversity (gender, age, ethnicity, etc.)
Provide CSR orientation and education for directors
Provide Input into CSR reporting
Assess board CSR competency
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Summary
• To develop a CSR strategy the credit union
must answer four questions:
1)
2)
3)
4)
Where are we now?
Where do we want to be in the future?
How do we get there?
How do we measure progress?
• The Board of Directors has an important
governance role to play to foster CSR
success
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4. Who is currently implementing
a CSR strategy?
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Not Just Big Credit Unions
iNova Credit Union (Halifax, NS)
Asset Size -$25 million (2009)
Sydney Credit Union (Sydney, NS)
Asset Size -$100 million (2009)
Bergengren Credit Union (Antigonish, NS)
Asset Size - $177 million (2009)
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Alterna Savings and Credit Union
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CSR definition: “An organization’s commitment to operate in an
economically, socially, and environmentally sustainable manner, while
recognizing the interests of its stakeholders, including members,
employees, business partners, local communities, the environment and
society at large”.
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Board of Directors and Member Relations Committee has overall
responsibility for the CSR strategy and policy, oversees the CSR report
(accountability report), and monitors stakeholder relations
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Board sets CEO’s CSR goals and ensures board is educated on CSR.
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CSR is responsibility of SVP of Marketing, Communications and
CSR.
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Alterna Savings and Credit Union
Continue
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Implementing a 5-year CSR strategy adopted in 2007, which set goals and
targets for community economic development, financial literacy,
environmental sustainability, accountability and philanthropy.
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Environmental sustainability committee of employees assesses
environmental impacts, and develops and monitors implementation of
environmental initiatives.
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A key CSR performance indicator is member satisfaction with the credit
union’s CSR efforts.
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Provides an “ethical” screen to its investments, partners and suppliers,
based on Ethical Funds’ screening program.
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Assiniboine Credit Union
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Credit Union Mission: “Our purpose as a socially responsible and profitable
financial co-operative is to provide accessible financial services for the wellbeing of our members, employees and community; offer fair and
meaningful employment in a safe and respectful workplace; and build
partnerships that foster self-reliant, sustainable communities.”
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5-year corporate strategic plan includes visioning goal of Making a
Difference in Our Community: “When we reach our vision we are positive
agents of change and CSR is integrated into everything we do.” Key
Performance Indicators measure progress towards achieving vision
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CSR strategies to achieve visioning goal and long-term targets: expand
services to the underserved; invest strategically in the community, model
and facilitate a commitment to environmental sustainability, and
integrate CSR and the Co-operative Principles throughout ACU
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Assiniboine Credit Union Continue
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Annual Balanced Scorecard approved by Board includes a CSR
component to measure progress in moving forward on CSR strategy.
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Balances Scorecard results account for 50% weighting on individual
performance plans for executive management team.
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Board governs CSR through mission, values, corporate strategic plan,
annual Balanced Scorecard, and governing policies.
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Community & Member Relations Committee oversees stakeholder relations
with members and community; including governing policies
e.g. Community Investment Policy, Member Engagement Policy
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Assiniboine Credit Union Continue
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HR Policy & Compensation Committee oversees stakeholder relations with
employees, including governing policies e.g. Employment Principles,
Compensation Philosophy.
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CSR is responsibility of VP Corporate Social Responsibility who reports to
CEO. A small team of CSR subject matter experts supports the roll-out,
coordination and integration of CSR efforts.
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New Eco-Excellence Team will develop integrated action plans to
continuously improve environmental performance.
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Northern Savings Credit Union
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Sustainability vision: ”Strong, resilient, Northwest BC communities and
credit union, excellent financial services and enhanced quality of life for
members, and recognized by our employees to be a great place to work.”
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One of five values is: Positively impacting the communities we serve.
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Six principles guide the credit union to build strong, resilient and
sustainable communities.
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Seven long-term business goals include three focused on sustainability
and community reinvestment:
o Strong, resilient communities
o Enhanced community reputation and increased profile as a
community leader and champion
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Northern Savings Credit Union Continue
o Stakeholder awareness and understanding of and support for Community
Reinvestment Strategy
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Board of Directors has a Donations and Community Reinvestment
Committee which provides oversight over implementation of sustainability
strategy (referred to as the Community Reinvestment Initiative).
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Manager of Community Reinvestment reports to the HR VP
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Sustainability is incorporated into job descriptions.
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Team of ‘Sustainability Champions’ provides support to
implementation and manages sustainability projects.
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Vancity Credit Union
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Credit Union Vision: “Redefining Wealth in a way that both grows our
business and supports our members and communities in a reciprocal
fashion. This new definition of wealth goes beyond profit alone to one that
includes social justice, environmental sustainability, and community wellbeing. It’s a definition that goes beyond the trade-offs assumed in a triplebottom-line approach to one that creates true blended value.”
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Three year strategic business goals include one focused on: Build Our
Social Finance Offer – provide access to credit, investment and financial
advice for members and agencies engaged in businesses that create social
or environmental benefit as well as economic benefit.
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“Community Investment” Division is focused on increasing their Social
Finance business, an entrepreneurial and risk-based discipline of
investment in enterprises – business, not-for-profit, and
co-operative.
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Vancity Credit Union Continue
• The Community Investment Division includes Vancity’s Sustainability Group
(focused on reducing the credit union’s environmental footprint) as well as
its business banking and commercial real estate groups to capitalize on
synergies with existing business and new community investment / social
finance initiatives
• Community Investment Committee of the Board provides strategic
oversight over Social Finance strategy
• CSR is decentralized and embedded into other departments, including
finance, facilities, marketing and branch operations
• Currently working on the development of a community impact metric
to measure success
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5. Where to go for more information on
Credit Union Social Responsibility?
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Canadian Central and CCA
1. Credit Union Central of Canada’s “Credit
Union Social Responsibility InfoHub” at
www.cusr.cucentral.ca
2. Canadian Co-operative Association’s
Environmental Toolkit
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