Nature conservation and technology, a new approach for financial institutions due to the Strategic importance of CSR as a factor that generate Reputation and Competitiveness

1. 1
Nature conservation and technology, a new approach for financial institutions due to
the Strategic importance of CSR as a factor that generate Reputation and
Competitiveness
Juan Felipe Mora Bonilla, Juan David Ocaña, Adriana Del Pilar García.
University of Ibague, International Business management.
In the past, financial performance was an imperative principle to evaluate banks value
(Raman, M., et all, 2012)1
. As consumer become more demanding banks have sought to
differentiate themselves (Theaker, A. 2012)2
. One of the elements of differentiation has
been to invest in environmental conservation and adopt socially responsible methods
with the use of information technology as an important step in applying disclosure
(Homayoun, et all, 2013)3
. On this basis, the key aim of this essay is twofold. First, to
identify how corporate social responsibility is evident in financial institutions that reduce
negative impacts on nature, Secondly, to observe how banks generate reputation through
the use of technology to communicate CSR efforts. To fulfill the objectives of this paper
it’s necessary to demonstrate the strategic importance of CSR, show how the use of
information technology as a communication channel between banks and their
stakeholders generate competitiveness for financial institutions and finally, it will be
exposed the case of Triodos Bank to represent that indeed, an ethical bank is possible.
Traditionally, banks have focused their interest only on economic and social factors, but
nowadays they also have understood the importance of the environment, and that they
have the responsibility to contribute reducing negative impacts on nature. Thus, banks
have developed strategies, focusing on redesign their policies and analyze their
borrowers. within this realm, the so-called triple bottom line seeks to evaluate business
performance on its impacts on the environment and interested stakeholders besides
profitability concerns (Dao, Langella, et all, 2011),4
also, banks can apply a strategic
environmental assessment (SEA), a term that is now widely used to a systematic process
of analyzing the environmental effects of policies, plans and programs (PPP’s) (Sadler &
Dalal-Clayton, 2012),5
this one has expanded significantly, especially in Europe, and it
now has formal institutional backing in many countries (Annandale, Bailey, Ouano,
1
Raman, M., Lim, W., & Nair, S. (2012). THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON
CONSUMER LOYALTY.
2
Theaker, A. (2012). Corporate social responsibility. The Public Relations Strategic Toolkit: An Essential
Guide to Successful Public Relations Practice, 193.
3
Homayoun, S., Johansson, J., MalmstrÖm, M., & Rezaee, Z. (2013). Research opportunities for internet
corporate social responsibility disclosure. Asian Journal of Research in Business Economics and
Management, 3(1), 1-20.
4
Dao, V., Langella, I., & Carbo, J. (2011). From green to sustainability: Information Technology and an
integrated sustainability framework. The Journal of Strategic Information Systems, 20(1), 63-79.
5
Sadler, B., & Dalal-Clayton, B. (2012). Strategic environmental assessment: a sourcebook and reference
guide to international experience. Routledge.

2. 2
Evans, & King, 2001,A),6
thereby assisting the implementation of sustainability, being a
helpful tool to the decision-making process of banks. Following this approach, financial
institutions have the liability to implement PPP’s that ensure make loans to companies
that won't harm the environment, likewise by complying with social and legal norms
related to environment, firms enhance their reputation by not polluting and exploiting
the environment (Nandy & Lodh, 2012).7
The latter gives assurance to banks to make
the loan; so, it provides a benefit to the three parts (banks, firms and the nature). All of
this helps prevent banks indirectly generate negative environmental impacts, because an
individual project stimulates others development, such as the construction of a road that
may induce new traffic (Annandale, Bailey, Ouano, Evans, & King, 2001,B), and hence
noise contamination, or construction of a building can induce urbanization and thus to
deforestation, species migration, future pollution, among others.
Moreover, all decisions that financial institutions make, generate impact to their
stakeholders, those who influence activities made by organizations, so banks have to
balance their profitability and their social responsibility efforts. As corporations operate
in an increasingly globalized environment, stakeholders become more heterogeneous,
not only with their values and opinions but also with geographical locations.
Consequently, it can become a necessity to use information technology (IT) to engage
stakeholders to deliberate emerging critical issues facing organizations (King, Hartzel,
Schilhavy, Melone and McGuire, 2010),8
creating at the same time, a good responsible
reputation to the society. But before that, to create reputation, to help position your
brand, banks must clearly define their strategies, and define how important is the role of
CSR. That gives to institutions a framework to decide how explicit or implicity the CSR
should be communicated (Bart, 2006)9
. Deciding the use of IT to express social
responsibility campaigns is the result of an analysis that reflects market trends. Any key
strategy used for CSR administration must reflect strong and effective communication
channels to show CSR efforts. Taking into consideration web design, content, and
interactive features for a CSR corporate website (Gomez, L. M., & Chalmeta, R.
2011)10
. Given the importance of CR as an important intangible asset that banks should
carefully manage, understanding its antecedents and consequences is of strategic
importance. (Maden, C., Arıkan, E., Telci, et all, 2012).11
6
Annandale, D., Bailey, J., Ouano, E., Evans, W., & King, P. (2001). The potential role of strategic
environmental assessment in the activities of multi-lateral development banks. Environmental Impact
Assessment Review, 21(5), 407-429.
7
Nandy, M., & Lodh, S. (2012). Do Banks Value the Eco-Friendliness of Firms’ in their Corporate Lending
Decision? Some Empirical Evidences. International Review of Financial Analysis.
8
King, R. C., Hartzel, K. S., Schilhavy, R. A., Melone, N. P., & McGuire, T. W. (2010). Social responsibility
and stakeholder influence: Does technology matter during stakeholder deliberation with high-impact
decisions?. Decision Support Systems, 48(4), 536-547.
9
BART, Brüggenwirth (2006) Jan Jonker, Marinus Cornelis de Witte. The CSR Brand Positioning Grid.
Management Models for Corporate Social Responsibility.
10
Gomez, L. M., & Chalmeta, R. (2011). Corporate responsibility in US corporate websites: A pilot study.
Public Relations Review, 37(1), 93-95.
11
Maden, C., Arıkan, E., Telci, E. E., & Kantur, D. (2012). Linking Corporate Social Responsibility to
Corporate Reputation: A Study on Understanding Behavioral Consequences. Procedia-Social and
Behavioral Sciences, 58, 655-664.

3. 3
Not all the type of communication that is disseminated through the information
technologies is positive. Recently, there has been controversies about the relation of
some of the world's biggest banks and the world of mafia, smuggling, drug trade and
arms trafficking, which is why some banks have benefited from money laundering,
likewise debt crisis has strengthened the grip of the loan sharks and speculators who
control the vast underground economies in many countries.(Saviano, 2012)12
. In the
middle of a huge crisis of trust in the financial system, it is possible to understand that
the economy provides a solid alternative the "ethical banking" that it business practice is
fully consistent with their CSR discourse. (Paulet, E., & Relano, F. 2012).13
Triodos is a
global pioneer of sustainable banking. That makes money work for positive social,
environmental and cultural change (Triodos bank).14
Peter Blom, chief executive of
Triodos Bank, said the fact the bank had doubled in size since the financial crisis began
in 2008 showed "a different way of banking is both possible and attractive to large
numbers of people (Murray, 2013)15
, to forge a financially viable future for banking, a
positive future that starts and ends with the interests of people and the environment they
depend on.”(Blackbourne, 2013)16
. By this is considered that ethical banking is
increasingly accessible, besides offering all traditional banking services, ensures
transparency and confidence to their customers. And it demonstrates that, indeed,
another way of banking is possible.
To conclude, it can be said that banks are recognizing the strategic importance of the
CSR having the obligation to contribute to the environmental or nature preservation, and
for it they have the necessary tools, however, banks will continue to be profitable, and
these are win-win strategies that ensure reputation and profits for them, contributing to
sustainability of society, to the preservation of the environment that surrounds all; In
addition these institutions have expanded their objectives, thinking not only in their own
interest but also in its stakeholders, promoting the conservation of natural environment
through the efficient use of resources and implementation of technological strategies
which help to give reputation and competitiveness with their communication channels
that discloses CSR efforts made it by banks.
12
Saviano, R. (2012, August 25). Where the Mob Keeps Its Money. The new york times.
13
Paulet, E., & Relano, F. (2012). From CSR rhetoric to real business practice: ethical banking in
Scandinavia. International Journal of Business Governance and Ethics, 7(4), 350-364.
14
Triodos bank. (n.d.). Retrieved March 20, 2013, from Triodos bank:
http://www.triodos.co.uk/en/about-triodos/
15
Murray, J. (2013). Triodos sees profits soar 31 per cent as green banking boom gathers pace. Bussines
green.
16
Blackbourne, A. (2013). Values-based Banks call for transparency, sustainability and diversity. Blue and
Green tomorrow.