Citizen act memo_commercial_practices_va

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MEMO – SUSTAINABILITY, CSR AND COMMERCIAL PRACTICES

CITIZEN ACT – season 2011-2012

Developed and written by CCMP (Centrale de Cas et de Médias Pédagogiques) and Olivier DELBARD, Professor of social sciences at ESCP Europe

SOCIETE GENERALECITIZEN ACT

CCMP AND OLIVIER DELBARD, PROFESSOR OF SOCIAL SCIENCES AT ESCP EUROPE

TABLE OF CONTENT

INTRODUCTION

I.CUSTOMER RELATIONS

II.PRODUCT OFFER

A.PRODUCT OFFER IN RETAIL BANKING ACTIVITIES

B.NEW INVESTMENT AND FINANCING PRACTICES

III.INNOVATION ISSUES

CONCLUSION


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INTRODUCTION

Companies wishing to to integrate sustainability and CSR issues have to consider their commercial practices and the way to improve them from a sustainable and responsible perspective. This type of approach demonstrates company maturity since the latter moves beyond communication and image to confront itself with the reality of its own activities and operations.

It is essential that the banking industry first distinguish between its two main types of activities, i.e. retail banking on the one hand and investment and financing activities on the other. Other types of activities (insurance, asset management, etc.) may also be taken into account for CSR implementation.

The evolution of commercial practices is geared towards three main priorities:


• Customer relations• Product offer• Innovation

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I. CUSTOMER RELATIONS/ RETAIL BANKING

The customer is a key stakeholder, not only from a traditional point of view, but also from a CSR and sustainability perspective. Indeed, customers expect their banks to engage in commercial practices that reflect real and effective implication in the social environmental and governance-related fields. This is true for both customer relations and the products offered.

In this respect, Société Générale has made the “Customer” dimension a key priority in its Ambition SG 2015 plan for retail banking activities. Emphasis is placed on the quality of customer relations based on trust and long term commitment. The company must constantly remain “flexible and efficient”. These objectives are dependent on staff quality and involvement, i.e. about 40,000 people in retail banking activities in France.

This responsible customer-relation that the bank wishes to implement involves concrete measures such as reducing subsidiaries’ and establishments’ environmental footprint, reducing the use of materials such as paper (using Internet, online services), as well as accessibility plans designed for disabled people amongst others.


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The evolution of the offer is key to any CSR and sustainability policy. Indeed, when rethinking its offer, the company examines its core responsibilities and operations, since it is focusing on improving its social and environmental performance. This is a major issue in the banking industry that could have a decisive impact on future economic models and investment choices made by production industries. It is therefore important to develop a clear and consistent offer, which the general public can also understand easily.

II. PRODUCT OFFER


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A retail bank’s core offer is usually divided into three segments: day-to-day banking operations, credit policy and savings.

Regarding loan products, Société Générale has a leading position on business formation lending, with more than 10% of the French market. This is obviously a major issue in terms of sustainable economies. For individual clients, the zero rate green loans offer is a strong incentive for investing in sustainability. All in all, the bank claims to have granted more than 8,700 “sustainable loans” since 2007, amounting to 113 million euros. Furthermore, the bank has developed a specific loan offer for migrant populations, “Your bank here and there”.

Regarding savings products, Société Générale offers a whole range of solidarity-based savings products, Conciliance for example, for which a share of the interest earned is redistributed to associations and NGOs. This solidarity has been extended to savings certificates.

In terms of ’day-to-day’ banking, more than 50,000 Société Générale clients currently hold a charity bank card. On the corporate market, cooperation with the French Office National des Forêts has made it possible to offer a business payment card that contributes to forest conservation in the South of France.

A. Product offer in retail banking activities


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B. New investment and financing practices


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Société Générale is involved in multiple partnerships. With Rhodia, the bank is offering total or complete CO2 offset products (Orbéo subsidiary). The group is also involved in public-private partnerships (ppp) with a strong environmental dimension.

All in all, Société Générale boasts more than 2.8 billion euros new green financing for 2010. Regarding renewable energy, investments were multiplied by 140 in 2010.

As far as major financing projects are concerned, the international reference is that of the Equator Principles, which were set up in 2003 and impose taking into account social and environmental criteria for any investment over 10 million U.S. dollars.

Société Générale endorsed the Equator Principles in 2007. 70 projects were screened in 2010.


B. New investment and financing practices

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More generally speaking, integrating sustainability and CSR issues into commercial practices implies constant focus on innovation. Indeed, the banking industry must be prepared to meet stakeholder expectations regarding the worldwide economic and financial crisis.

The point is to develop new products reflecting the sustainable and responsible commitment of banks. Microfinance is a good example: by developing a microcredit offer, the banking industry is clearly behaving responsibly towards less developed countries, and also towards all those populations excluded from banking services, both in France and worldwide.

III. INNOVATION ISSUES


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III. INNOVATION ISSUES

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CONCLUSION

The link between sustainability and commercial practices is far from obvious, especially in the banking industry for which environmental responsibility may have appeared as rather indirect, if not a minor issue.

Yet, banks have understood how important it is to engage in commercial practices and products integrating social and environmental issues, which implies a stronger and more transparent relation with customers, especially in retail banking. Investment and finance activities have also evolved significantly, with international commitments such as the Equator Principles on the one hand, and the growing importance of SRI products on the other.

For Société Générale, the aim is to show its overall coherence in terms of CSR and sustainability, which means the inclusion of commercial practices, be it in retail banking or investment and finance activities.


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Economy & Finance

Citizen act memo_commercial_practices_va