Corporate Social Reporting of Barclays Bank
I. Barclay’s versus Lloyd’s
The central focus of Barclay’s corporate social responsibility reports (CSRRs) is the financial intermediation efforts in South Africa with UK citations at almost the end of each CSR area of concern. Another emphasized reference is its inclusion in several indexes (e.g. Sustainability Indexes and Ethical Indexes), which would give the initial impression that its operation and strategic direction is based in CSR. In relation to this, most of its statements are generalized like having a consistent high-ranking in client satisfaction surveys. Acquiring activities or also called derived CSR feature is also mentioned in buying Absa which is one of the socially responsible companies in South Africa particularly in health areas.
On the other hand, the early part of CSRRs of Lloyd’s is the description of its beliefs to what is the appropriate framework in CSR dimensions. The company also mentioned to that it has a customer-focused survey database called Care Index where problems are based and also resolved. It is peculiar to see that CSRRs of include a topic about shareholder returns tackling its success in installing risk assessment system in lending activities. In effect, this ultimately suggests that borrowing opportunities to the public will be constrained by formal policies. In addition, employee performance measures (e.g. Balance Scorecard) are also discussed to minimize the risk of customer and corporate performance failures. There are no direct highlights on environmental impacts. Also, employees who are volunteering to raise funds replace donation efforts.
The comparison of 2005 CSRRs performance of two banks shows that both of them failed to discuss their operational loopholes that lead to specific adverse social/ environmental impacts. Majority of the disclosures refers to positive engagements that can characterize and even elevate their CSR efforts. Unlike Barclay’s, however, Lloyd’s is more open to criticism and perhaps more realistic than the former. Lloyd is not listed in any sustainable indexes, silent in environmental impacts of its operations and accepted the fact that the service and finance functions of banks would hardly impact the greater society. Barclay’s is also more inclined in expanding in developing and mostly-poor countries in Africa. In effect, it was able to acquire CSR features aside from the strategic reasons of the decision. Compared to Lloyd, Barclay’s created the strategy to combine shareholder and CSR objectives.
Due to the upper hand of Barclay’s, all of its African-related activities (e.g. acquisitions, lending policy adjustments, job creation) would be included in its succeeding CSRRs. Lloyd’s cannot afford this advantage because its operation is hardly based in developing or poor countries. When it built buildings and additional jobs, improvements in the society where it belong (e.g. modern economies) is less significant contrary to the implications of Barclay’s actions. With the attachment of risk management systems in the processes of Lloyd’s, it may have difficult or ultimately loose the opportunity to have similar strategy with Barclay’s. However, the motivation of Barclay’s compared to Lloyd in engaging in a risky environment is aggravated by former inclusion in sustainability indexes.
II. Barclay’s 2005 versus 2004 CSRRs
Most of CSRRs of the company in 2005 is derived in conjunction with its acquisition of South African-based Absa. For example, the low-cost bank of Absa, Mzansi, is reported to implement fast and cheap money transfer services and also efforts of micro financing. It is considerable that Absa is a conglomerate company, which has assets in different companies. In 2004 version of CSRRs, however, the company has yet to create African partnerships and most of its key report areas are charitable donations, investments in sport facilities and improvement of already established programs in community/ environment. The 2004 version also reflects the generality of reports without mention of negative social impacts of activities. It is also implied that the 2005 accelerated African pursuits started in the company’s efforts to minimize HIV/ AIDS in the Africa and Middle East where it implemented funding of anti-retroviral drugs.
In both years, Barclay’s consistently show its concern for the society. In the contrary, 2004 engagements are much limited compared to 2005 and the differences in scope and positive impacts to the society is smaller in the former year. Obviously, the opportunity to exploit African involvement in health-related problems open the window of opportunity for Barclay’s to enter a new sphere of strategic alternative wherein its investment will be “planted”. In this way, not only that it is earning the costs that will be used in future funding and programs but also will benefit its ranking in sustainability- and ethical-based exchanges. Due to this, the good deeds of the company are a “necessary good” for its strategy.
The company’s profits and its principles are heavily linked in which behaving responsibly will be its ultimate means of being profitable (e.g. raising funds in sustainability indexes). It is within “good management” class where it raises profits that can benefit the society. Due to this, it is recommended that Barclay’s should continue its African engagements. These efforts can minimize the risks of foreignness by using its initial partners like the conglomerate Absa to serve as the arm of societal involvement. In the process, shareholder interests will not be disadvantaged because the risks are spread over the two companies. The familiarization of Absa in African environment would minimize political, social and economic risks while the substantial assets of Barclay’s and reliable source of financing will fuel the activities of the former.
It may be argued that Barclay’s may go over the limit in which financial institutions should be in terms of CSR with reference to Lloyd’s. This may be the case of Barclay’s because its financial strength is dependent on its activities in high-risk investment destinations where minimal international banks would target. However, environmental effects like issues of CO2 emissions should be a relatively insignificant issue to consider. This should not overtake and blurred the direct and “trustworthy” claims of being responsible like creation of earning opportunities in African countries either being self-employed or to gain employment. Having priorities are important because most African countries has relatively unstable governments which should be of higher concern.
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