Danske Bank: A Responsible Example for Banks
Presentation written by:
Edel O Keeffe: Edel.O-Keeffe@etu.univ-grenoble-alpes.fr and
David O Leary: firstname.lastname@example.org
Presentation supervised by: Assoc. Prof. Dr. Elena M. BARBU, email@example.com
Danske Bank which translates directly to Danish Bank, is a financial institution set up originally in Copenhagen, Denmark in 1871. The bank operates mainly locally around the Nordic countries but also has branches in Ireland and the Baltic countries such as Estonia, Lithuania and Latvia. They have over 19,000 employees working for the company across 15 different countries. Danske Bank is a very profitable organisation as well as having a high corporate social responsibility. According to their income statement of 2017, they had a net profit of over 2.6 billion euro. This is in and around a 6% increase compared to 2016 profits. When we read the balance statement we also see that Danske Bank’s total assets have increased to 2,293,624 (DKK) in 2017 from 2,168,239 (DKK) in 2016. At the end of 2017, the share capital consisted of 936,827,722 shares of a nominal value of DKK 10 each. (Danskebank.com, 2018)
Danske Bank is constantly investing in R&D to come with new innovative ways to make banking easier for all involved. For example, at the start of February, the company released ‘a new digital solution that allows its small business customers to get a loan within minutes with access to the money on the same day’. This new innovative technology was piloted last year but only rolled out last month. Prior to this, a customer’s application would usually take up to 5 days for a bank to process it and another 10 days before the customer could access his/her money. (Bank Innovation, 2018) Danske Bank also has a very positive leadership style. They inspire others to succeed, drive customer centricity and role model the values of the company. They teach leaders to motivate and support other team members. They encourage leaders to put themselves in the shoes of the customer and to spot problems and make life easier for them and also promote the core values of Danske Bank.
We intend to present here different CSR practices of Danske Bank.
- Environmental Protection
Danske Bank created an environmental policy in 2007 which focuses on short term goals as well as long term. This strategy is updated on a regular basis to confront climate change and it focuses on three main aspects. (Danskebank.com, 2018)
- Energy-efficient operations: The company plans to reach carbon neutrality by reducing energy consumption across the entire company. They aim to achieve this by optimising energy control in the company’s buildings. Examples of this are the purchase of energy efficient IT equipment and overall behavioural changes such as turning off lights and turning off heating when the windows are open.
- Purchasing renewable electricity: Danske Bank purchases renewable electricity certified by the IREC (International Renewable Energy Certificates). This eliminates the emissions caused by their electricity consumption. Danske Bank is a member of the RE100 initiative after becoming 100% powered by renewable energy in 2015.
- Offsetting Emissions: Offsetting emissions deals with the fact a company cannot possibly have 0 carbon emissions. From transporting to heating there will always be a certain amount of CO2 emissions. To counteract this, the company by carbon credits which invests in CO2 reduction projects that have real results.
- Employee Environment
From our research into Danske Bank it is clear there is a great working environment throughout the company. Through its promotion of a healthy working environment and their policies on diversity and inclusion we see how the company set the foundations for a content workforce.
According to the company, collaboration, support and prevention are key factors in ensuring employee satisfaction. ‘We collaborate with external partners, and we give our managers the tools necessary to identify and manage working environment issues before they become serious’. (Danskebank.com, 2018) The company gives responsibility to the local managers which creates a stronger connection between the employees. This can be seen as breaking or weakening the hierarchal system. The frequent dialogue can certainly improve employee satisfaction and solve problems quickly before they turn sour. They also offer courses and training to these local managers to help with these situations.
Danske Bank also has policies relation to stress, anxiety and prolonged absence due to illness. The company has developed a toolbox which is available online for the use of managers and employees if they are stressed or anxious. This toolbox allows them to have dialogues on job satisfaction and overall well-being. They also provide counselling for staff who have been absent due to serious illness. ‘The objective is to support the employees’ full recovery and encourage them to return to work’. (Danskebank.com, 2018)
According to Danske Bank they believe that a diverse workforce will help them reach their goals of having competent, committed employees and grow a culture of collaboration within the organisation. Discrimination based on gender, ethnic background, sexual orientation, age, religion or nationality is not tolerated in any way within the company. This in turn leads to an innovative and healthy workplace with overall employee satisfaction.
- Engaging with shareholders
Danske Bank has great communication links between themselves and their stakeholders. They chose to share their knowledge and expertise while also trying to maintain integrity and transparency between themselves and the shareholders. For example, in 2017, the CEO of the company was invited by the Danish government to the disruption council which aims to embrace the opportunities that technological advances have granted us. Due to Danske Bank’s emphasis on innovation, they are one of the frontrunners and this gave them the opportunity to share their knowledge and expertise with the public but also the stakeholders.
They also organise hundreds of debates across Denmark each year, where topics such as financial confidence, growth and globalisation can all be discussed in a political and social manner. They also collaborate with relevant organisations to provide shared solutions for the public and customers. An example is Danica Pension’s partnership with Børneulykkesfonden on the Active Generations programme. ‘The programme promotes healthy habits across generations in Denmark, and in 2017, almost 14,000 children participated in a grandparent day in more than 90 kindergartens, where we gave them inspiration for fun and enjoyable games and exercises’. (Danskebank.com, 2018)
- Philanthropy & Activities Against Poverty
Along with its corporate social responsibility endeavours in the realm of sustainability and employee protection, Danske Bank also places emphasis on philanthropy and charitable contributions. This is both important concerning contributing to the positive reputation of the company in consumers’ eyes, and concerning the company’s own moral standards and policies, in which they strive to constantly improve and develop. This objective is expressed in their 2017 corporate responsibility report, where it is mentioned that the company has been developing new guidelines for their donations and voluntary work, which they hope to implement in 2018. It will therefore be pertinent for Danske Bank to continue to provide updates on their proposed new guidelines considering philanthropy into the future.
At present, the company has several schemes in place which focus on philanthropic endeavours. In 2017, it celebrated the 50th birthday of its Pondus scheme, which is their Danish ‘piggy bank’ for kids’ savings. To mark this, the company made donations to the Children’s Fund and UNICEF. This money was raised primarily by the auctioning of Danish art, as well as other activities. The company also expresses in their 2017 report how the employees themselves donate a lot of their time in voluntary work on behalf of the bank. The company set up a Norwegian initiative, Danske Charity, whereby employees get a paid day off in order to do charitable work and volunteer at an NGO. Similar programmes have also been set up in Northern Ireland with the ‘Danske Time to Give’ initiative, where employees contribute to mental health and wildlife charities, in Estonia with the ‘Let’s donate time’ programme, where employees help children with special needs, and in Finland, where employees volunteer for the ‘Financial knowledge and skills’ project, which helps young people to manage their personal finances.
In other charitable work, the company has engaged in contributing to the education of underprivileged children and orphans in India, in collaboration with the NGO Need Base India. The programme encompasses medical care, housing, and educational training. In Latvia, the company supports underprivileged students who show an academic aptitude with their scholarship, the ‘Vitols Fund’ foundation. Furthermore, in 2016, employees in Lithuania became involved in Vilnius Marathon, and used the ‘Endomondo’ challenge to track the calories they burned through the sports activity, and subsequently the equivalent amount of calories was donated in food to the ‘Food Bank’, which went to vulnerable social groups.
Additionally, each year, the company makes Christmas donations in Denmark, Finland, Norway, Sweden and Northern Ireland, where employees vote for which charities they would like to receive financial contributions. In total in 2017, DKK 370,000 was donated to various charities through this initiative, as well as additional donations of DKK 1.5 million to other endeavours through the Danske Bank Fund. This charitable work seems to be on the increase when compared to their 2016 corporate responsibility report, with further initiatives expected in the future and 2018. An example of a CSR initiative employed by Danske Bank, which evidently has future-thinking in mind, is the use of their MobilePay app in order to facilitate and promote charitable contributions among its consumers and users. The 2016 CSR report mentions that in 2016, more than 270 charitable organisations collected donations through the use of the Mobile Pay app.
Another positive element of the MobilePay app is Danske Bank’s initiative with the Danish newspaper Hus Forbi. This newspaper is sold by ‘homeless or otherwise marginalised vendors in the streets of Denmark’ (Danske Bank CR Report 2016). In 2015, MobilePay launched a pilot programme in collaboration with the newspaper which offered purchasers of the newspaper the opportunity to effectuate their purchase of the newspaper through the MobilePay app on their phones. This in turn sends the payment for the vendor to a Danske Bank cash card, which the vendor can use to pay for goods and withdraw cash, without having to have a personal bank account. This addresses the difficulties homeless people may face in creating a bank account without the provision of a permanent address.
In all, it is abundantly clear that Danske Bank has a very clear and ambitious strategy when it comes to CSR concerning philanthropy and charitable work, as well as combatting poverty. Their commitment to further developing this work through new guidelines for 2018 and beyond is admirable and adheres to a well-engaged and dedicated CSR strategy.
- Other CSR Actions
Danske Bank is also involved in several other CSR actions which are not encompassed under some of the areas we have thus far discussed in this report. Apart from their environmental endeavours, positive labour practices and philanthropy, Danske Bank has also set up some other initiatives which are quite ambitious and novel. One such initiative falls under their strategic theme ‘fostering financial confidence’, which aims to encourage ‘sound finances in the younger generation’ (Danske Bank CR Report, 2016). Concerning this, the company’s ambition is to ‘help children and young people develop a sound understanding of money and personal finances that will enable them to make healthy financial decisions later in life’ (Danske Bank CR Report, 2017). This manifested in the development of the PocketMoney app 2017, which also includes a pocket money card for 8-17 year olds, and a link to parents’ online banking apps whereby they can keep track of their children’s savings developments. The company has also developed the SMART education scheme concerning financial confidence for young people, whereby Youth Ambassadors spent 150 company-paid hours in classrooms in 2017, teaching students about the importance of financial management. The company mentions in the report how more than 13,500 children participated in their education programmes and campaigns in 2017, which exceeded their target, and that they again hope to increase this target for 2018. The company has introduced similar education campaigns in Denmark and Finland, and their approach to financial education of the young also includes the development of online universes and games such as Moneyville.
“We want to help children become financially responsible
and develop healthy financial habits…’’
(Jeanette Fangel Legstrup, Senior Executive Vice President Danske Bank, 2017)
Other corporate responsibility initiatives include the company’s dedication to fostering the development of new start-ups, such as through The Hub, an online platform for start-ups developed by the company which Danske Bank says makes it easier to recruit skilled employees, raise capital, and gain access to best-practice tools. The platform initially launched in Denmark but has since expanded to Sweden and Norway. They are also a founding member of Denmark Bridge, an initiative established in order to build relationships between Danish companies and Silicon Valley. They have engaged with boosting the Finnish economy through supporting small and medium enterprises and have established an ‘early warning’ programme for SMEs in Denmark, which aims to mitigate damage to small firms during financial crises. Danske Bank has also endeavoured to boost female entrepreneurs.
In terms of their responsibilities as a banking operation, the bank has worked in order to make banking more easy and accessible for everyone, such as setting up one-to-one meetings with seniors in order to provide help to them with digital banking, which is exponentially increasing in prevalence and popularity. In other banking areas, Danske Bank has pushed endeavours which promote responsible banking and lending practices, and are advocates for accountability in their sector, as well as aiming to reduce financial crime.
Elsewhere, the company has undertaken the effort of recognising the financial sector’s implications with and influences on human rights issues. In 2016, they conducted a high-level, group-wide risk assessment in collaboration with the Danish Institute for Human Rights. The assessment was based on the UN Guiding Principles on Business and Human Rights and forty-seven recommendations were made (Danske Bank CR report, 2016).
In critically examining Danske Bank’s CSR strategies, reports and efforts from recent years, it is quite difficult to identify any negative aspects. The company has a well-rounded, considerate, and involved approach to implementing their CSR goals, and seems to be achieving and surpassing the targets which they have set concerning elements such as the environment and youth education. Their CSR commitment is not just seen in one, but in many facets of their engagement with society and with their stakeholders. They are striving to become a positive contributor to society in the Scandinavian countries in which they are well-established, but also in other countries such as Latvia, Lithuania, and Northern Ireland. The imperative concerning their CSR strategy is that they continue to set objectives and improve, becoming more widespread and establishing new initiatives in order to keep up with the ever-changing dynamics of society in the realms of the environment, labour practices, philanthropy and other areas. With the more digitised age comes great development, but also increased threats and vulnerability both for banking customers and society in general, and with that a greater responsibility for companies such as Danske Bank to leave a positive corporate mark on the world. One can see in their CR reports that the bank is engaged with supporting and contributing to the UN Sustainable Development Goals, which is commendable and sets a positive structure with which to align their CSR strategy into the future. Therefore, in conclusion, it will be necessary for Danske Bank to continually support both financially and personnel-wise the programmes and campaigns that they have already established, while also moving forward to add to and diversify these initiatives.
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