Defining corporate social responsibility

Definitions of CSR differ widely, ranging from the idea of charitable giving to the notion that business can help government achieve a range of laudable goals from social inclusion to environmental protection. Many definitions frame CSR activity as an intervention in society ‘To be socially responsible corporations must co-operate with other groups – such as competitors, nonprofits and government agencies to help solve social problems’ (Bowie 1993 quoted in Daugherty 2001: 389). Other definitions, such as that offered by the UK government, extend the responsibility to include the environment, people (employees and customers) and the economy:

While some argue that the concept is defined in so many different ways that it is practically meaningless (Sen and Bhattacharya 2001), we would suggest at the very least CSR involves the idea of business being proactive in its relationship with a range of social actors and doing more than just attempting to avoid transgressing widely accepted ethical rules or obeying the law. The term ‘social responsibility’ implies that business is motivated by more than just self-interest and is, in fact, an activity that aims to promote the interest of society at large. This can be differentiated from, for example, corporate sponsorship where ‘the company’s managers will expect a tangible return for their money’ (Varey 1997: 118).

The following two sections discuss widely contrasting views of CSR. In some senses they represent the extreme poles of opinion on this issue. In practice the attitude of most business organisations to CSR will occupy a position somewhere between the two. Ethical doctrines play a role in justifying both perspectives. For example, Milton Friedman, who rejected the concept of CSR, attempts to justify his ‘free-market approach’ to some extent from a utilitarian standpoint. His position echoes Adam Smith’s ‘invisible hand’ theory of capitalism, that an unregulated free market ultimately works to benefit the majority in society. On the other side of the debate CSR is viewed as a necessary and integral part of the ‘stakeholder approach’, an approach that is ultimately justified from a Kantian perspective.

The social responsibility of business is to increase profits

Milton Friedman, the economist and advocate of laissez-faire capitalism, argued against the idea that business has a social responsibility in the sense defined in the section above. He claimed that ‘there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits’ (Friedman 1993: 254). Friedman insists that it is wrong to suggest that corporations can have social responsibilities, for him only individuals can have responsibilities. He claims that the actual responsibilities of the corporation should be narrowly defined and limited to making ‘as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom’ (Friedman 1993: 249). By claiming that businesses have only one social responsibility, to maximise their profits, Friedman is in effect saying they have no social responsibilities in the generally accepted sense of the term. He does not say that moral rules have no place in relation to business practice, in fact while pursuing profits business must conform to what he refers to as ‘ethical custom’. As Chryssides and Kaler (1993) point out, he seems to be making a distinction between first and second order ethical rules, the basic moral rules of society (an obligatory first order) and social responsibility precepts (an optional second order). He does not elaborate on what the rules based on ethical custom are, but he does give some indication as to what the second order rules might involve. For instance Friedman castigates businessmen for ‘preaching pure and unadulterated socialism’ when they speak of ‘responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers’ (1993: 249).

According to Friedman, those who ‘preach’ the doctrine of social responsibility are making two claims, both of which he disagrees with. These are, first, that business must actively seek to do good, that is, not just avoid transgressing ‘ethical custom’. Second, this ‘good’ must not be done for profit, that is, it must not be done with self-interest in mind (if this was the motivation Friedman would have no objection to it). This raises an important question, which is, is actively seeking to do good easily distinguishable from the mere avoidance of doing evil? Friedman seems to believe this to be the case but it is difficult to see how the examples that he points to demonstrate this and indeed overall his position appears to be riddled with flawed arguments. It could be agreed that some of the examples he lists, ‘eliminating discrimination’ or ‘avoiding pollution’ are doing ‘good’, but at the same time they are actions that are intended to eliminate what are widely perceived to be social or environmental evils. Thus ironically what Friedman’s own examples actually illustrate is that on many occasions the moral choice is between doing good or, by default, doing evil. Chryssides and Kaler note:

It is not only Friedman’s conceptual understanding of CSR which is flawed; there are also problems with the arguments he presents in respect to what he perceives to be the responsibilities of a corporation. One of his key arguments, sometimes referred to as ‘the agency argument’ (Chryssides and Kaler 1993: 234), is that managers of corporations are merely agents of the shareholders in the companies they work for. Friedman states ‘In a free-enterprise, private-property system, a corporate executive is an employee of the owners of the business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires’ (1993: 249). In other words the owners of the corporation, the shareholders, are the only people to which managers are accountable and the only responsibility managers have is to act in their interests. This means maximising profits so that the shareholder will make as much money as possible from their investment. Friedman presents his premise about a manager’s role vis-à-vis the shareholders as a ‘statement of legal fact’ (Chryssides and Kaler 1993: 234). Clearly Friedman is correct to state that the managers of a corporation have a primary duty to serve the interests of the shareholders. However, his attempt to imply that this is a straightforward issue of legality is completely spurious. In both British and US law the corporation is a separate legal entity and is not identified solely with any particular group – employees, shareholders or directors (Chryssides and Kaler 1993: 229). Managers therefore are not directly the ‘agents’ of the shareholders in the way that Friedman wishes to imply, although shareholders are, in a roundabout way, the owners of the business. Friedman’s assertion that the interests of the corporation ought to be exclusively identified with its shareholders must be seen in the context of his advocacy of the values of free enterprise. These values involve a combination of ethical egoism and, as we noted above, a rudimentary version of classical utilitarianism that makes the assumption that if everyone pursues their own self-interest within a free market, the result is the greatest happiness, or economic well-being, for the greatest number of actors within that market. Friedman’s argument that only the interests of shareholders are important is, of course, something upon which there is not universal agreement. There is, in fact, an argument that the managers should act, in some senses, as the ‘agent’ of all groups associated with the corporation and not just the shareholders. Those who support this view reject Friedman’s ‘stockholder’ or ‘shareholder’ model in favour of what is usually referred to as the ‘stakeholder’ model.

Kantian capitalism and the stakeholder approach

The ‘stakeholder’ model is so named because those who propose it argue that the task of the corporate manager is to balance the interests of the different groups who have a ‘stake’ in the company. The interest of the shareholders in increasing their profits is only one interest, albeit an important one, among many that the manager must consider. This model requires the corporation to take account of its social responsibilities and to consider all of its stakeholders when developing business strategies. Evan and Freeman (1993) argue from a Kantian perspective for the adoption of the stakeholder model. They employ Kant’s categorical imperative: ‘Never use people simply as a means to an end; always treat yourself and others as beings with infinite value’ (Dienhart’s formulation 2000: 117–118) to argue that corporations have a duty never to treat any human beings as if they have only an instrumental value to the business. In fact they go on to argue that all groups affected by a corporation should play a role in determining company policy. Evan and Freeman state this deontological or Kantian ethical doctrine explicitly:

They argue that, in the US, changes in the legal system have been progressively circumscribing the idea that the corporation is only run in the interests of the ‘stockholders’. They point to a number of legal cases in the US that show that although stockholders’ interests are still paramount, other interests, customers, suppliers, local communities and employees have increasingly secured protection under the law (Evan and Freeman 1993: 255–257). Friedman’s viewpoint, they would argue, is slowly being overtaken by changes in legislation and business thinking, more in line with a stakeholder approach.

In the stakeholder model the role of the corporation coordinates stakeholder interests. It is through the corporation that each stakeholder group makes itself better off through voluntary exchanges. They argue that the ‘corporation serves at the pleasure of its stakeholders, and none may be used as a means to the ends of another without full rights of participation in that decision’ (Evan and Freeman 1993: 262). From the stakeholder perspective CSR is not an optional extra it is integral to the responsibilities of the company and the company must pay as much attention to its social duties as it does to maximising its profits.

Public relations and corporate social responsibility

L’Etang notes that CSR

Indeed how such promotional culture manifests itself as corporate engagement with local communities has been explored in recent studies focusing on how CSR communications are adapting to the context of financial crisis and austerity in some societies (Lekakis 2015). There is, however, another reason why PR professionals have tended to be associated with CSR, namely, the claim that PR can be a mechanism within liberal, pluralist society to enable the realisation of ‘laudible social goals’ (Gandy 1992: 133). For J. A. Pimlot the historian of PR in the US, the activity is intimately connected with what he views as democratic ideals. He writes: ‘They [the public relations specialists] are experts in popularizing information … the better the job of popularization, the more smoothly will society function’ (quoted in Pearson 1992: 257). Heath argues that ‘professional communicators have a major voice in the marketplace of ideas’ but that ultimately these voices ‘compete to achieve cooperation – the collective and coordinated actions of people in society’ (1992: 20). Broom goes further and argues that PR practitioners ‘must operate as moral agents in society’ and they must be prepared to place ‘public service and social responsibility over personal gains and special private interests’ (2009: 151–152).

It is clear then that there is a significant strand within PR theorising that claims that the practice can have a positive contribution within society, although this usually comes with the proviso that practice needs to be transformed (Grunig 1989). It almost goes without saying that there is bound to be a tension between this notion of PR serving the interests of society and the requirement that it serves the interests of the corporation (Kim and Reber 2008). L’Etang notes that the ‘area of corporate social responsibility thus highlights a dilemma which arises generally in the role of public relations: the tension between organisational goals and declared responsibility for “the public interest”’ (2006: 416). This tension between responsibility to the needs of the company and responsibility to the needs of society is sometimes revealed by the language used in corporate documents that attempt to explain the practice of CSR.

The language of corporate social responsibility

Companies frequently justify their CSR programmes with the utilitarian argument that ‘everyone benefits’ in the sense that the company’s reputation is enhanced and a local community materially benefited. Neil Shaw, a former chairman of Tate & Lyle plc. explains the mutual benefits of community programmes:

Some commentators (L’Etang 2006) note that while CSR programmes are indeed justified on utilitarian grounds there is, in many instances, little attempt to actually measure and evaluate the effects of such programmes. L’Etang points out that if such evaluation is lacking then companies ‘will not be in a position to claim that they have contributed to the general “happiness”. In short, CSR justified on utilitarian grounds needs to demonstrate cost–benefit analysis from the perspectives of donor, recipient and society in general’ (2006: 415). Evaluating and reporting the impact of CSR activities is an exceptionally important issue and one we will return to in the next section because there is perhaps here an opportunity for public relations to demonstrate the public service aspirations referred to above.

However, it must be noted, that in respect to CSR many companies frequently allude in deontological language to their responsibilities or duties to the community, or society as a whole. Lord Raynor, when he was Chairman of Marks & Spencer, stated: ‘There rests on all companies, particularly large organisations like ours, a responsibility to assist through donations and help, the charities and agencies which exist in the community’ (quoted in L’Etang 1996: 91). L’Etang (2006) makes the point that such aspirational claims are seldom matched by the practice of corporations. She argues that a deontological approach to CSR would focus on the motivation behind the programme, because seeking benefit from carrying out your responsibilities would not be ethical. From this perspective a CSR programme needs to demonstrate that it is motivated by duty, and not self-interest (enlightened or any other kind). If a company were attempting to improve its image or reputation via community involvement then it would be treating beneficiaries as a means and not as ends in themselves and thus breaking Kant’s categorical imperative. L’Etang (2006) points out that if corporations took on board Kantian principles then their CSR programmes might be managed rather differently. If the beneficiaries of CSR are to be treated as ends in themselves then they should be accorded equal status in defining and developing their relationship with the corporation and indeed in designing the CSR programmes they are meant to be benefiting from. If the language of the classic ethical theories is adopted to explain and justify CSR but companies do not fulfil the full implications of these ethical doctrines then they can leave themselves open to the charge of cynicism.

When reading corporate literature on CSR it becomes clear that companies sometimes do not restrict themselves to justifying the activity solely from a utilitarian, or a Kantian perspective. Robert Clarke, Chairman of United Biscuits, states:

L’Etang notes that in ‘many cases corporate literature is confusing because it appears to appeal to both utilitarian and Kantian principles yet apparently delivers on neither’ (L’Etang 1996: 93). This point, while indisputable, can perhaps be explained to some extent by the fact, noted above, that the classic ethical doctrines need to be qualified by each other in order to arrive at an ethic that balances rights and obligations with the ‘greater good’. It could certainly be argued that, given that moral philosophers have found it difficult to come to a wholly satisfactory resolution when debating the relative merits of the classic ethical doctrines, it would be asking a lot to expect business managers or public relations practitioners to avoid some confusion when dealing with complex ethical debates. Nevertheless, whether or not a company appeals to a combination of ethical doctrines to justify its CSR policies and practice, it should be expected to make a meaningful and committed attempt to fulfil the requirements of those ethical doctrines. Thus a deontological approach, motivated by the principle that regards others as intrinsically and not just instrumentally valuable will entail a commitment to genuinely ‘engage’ with stakeholders to find out how the CSR process can really fulfil their needs. This is quite different from merely ‘managing’ them and ultimately exploiting the process for the reputational benefits of the corporation. A utilitarian approach that is meant to ensure benefit to all sides should be prepared to measure and demonstrate that benefit clearly and transparently. The final two sections of this chapter will explore in more detail these two key issues: engagement with and responsiveness to stakeholders; and the measurement and evaluation of CSR practices.

Evaluating and reporting CSR policy and practice

L’Etang (2006) notes that it has long been argued that PR practitioners need to develop more comprehensive research and evaluation skills and we would suggest that this is particularly important in respect to CSR initiatives in communities. Recent commercial communications research and academic analysis has also emphasised this point. For instance Richard Coope, Head of CSR practice at CTN, commenting on the 2004 CSR Online Survey by CTN Communications notes:

Owen also highlights this point, commenting:

Accompanying this expansion in the reporting of CSR activity, companies have also claimed that they now carry out much more research into stakeholder views and requirements. Scottish Power’s statement in their CSR report is fairly typical. Scottish Power state that they: ‘commissioned research to establish stakeholders views on the relevant issues to cover in this report. We also incorporated multi-stakeholder feedback from previous Scottish Power Environmental Sustainability and Community reports’ (2003 quoted in Owen 2005: 7). This all seems very laudable; however, Scottish Power’s own assurance process does tend to highlight that while the company’s activity in regard to stakeholder research is to be commended the actual use to which this research is being put is less clear. A recent trend in company CSR reporting is to have one of the specialist CSR bodies verify the report in much the same way as an accountancy company verifies the financial annual report. Interestingly csrnetwork’s Verification Statement for Scottish Power’s CSR report concludes:

Carrying out research and reporting it has happened is all very well but it is vitally important that a company spell out clearly and in detail how they are evaluating stakeholder feedback and what impact the results of this research actually has on corporate decision making. It could be argued that this opens up an opportunity for PR but practitioners need to do more to develop the research, evaluation and reporting skills that will enable them to monitor the attitudes and expectations of stakeholders more successfully. The same skills will also enable them to demonstrate how the company’s CSR policies and practice have actually benefited stakeholders as well as the corporation in a much more transparent way. Business in the Community have set out ‘principles of measurement’ that would make an excellent starting point for public relations practitioners wishing to develop more robust methodologies for both assessing stakeholder needs and measuring CSR impacts (see ‘More than making money’ at www.bitc.org.uk).

It is vitally important that public relations practitioners engage more competently in research and evaluation in this area because it is becoming clear that in the absence of wholly transparent corporate communication in this area stakeholders will today increasingly access alternative sources of information to find out about a company’s activity. A major CSR survey carried out by Fleishman Hillard International Communications and the National Consumers League in the USA (2007) reveals that among consumers ‘online sources’ and ‘word-of-mouth’ vastly outweigh traditional media sources as preferred ways to learn about a company’s CSR record. Reponses indicated that consumers increasingly rely on the Internet to find out about CSR-related information but not in ways that will provide much comfort for corporations. Only 7 per cent of respondents said they would rely on the company website whereas 49 per cent said they would use Internet search engines or the websites of discussion groups. Additionally 77 per cent of consumers feel that word-of-mouth recommendations from peers are more powerful than recommendations from traditional media outlets. The authors of the report note that: ‘These findings, taken together, may indicate that traditional media sources may be lacking in credibility because the information they disseminate is viewed as incomplete, censored, edited, and therefore tarnished in some way’ (www.csrresults.com).

In today’s information society, the corporate website, the main forum used to report CSR policies and practices, is then in danger of being bypassed by consumers and other stakeholders. Coupland notes:

If, as seems to be the case, consumers and other stakeholders are not engaged by current CSR reporting processes then this is an issue that must be taken seriously by PR practitioners. A study of corporate websites by Capriotti and Moreno notes that with respect to CSR ‘the websites assume a mainly unidirectional/expositive function, focusing on the presentation of the information content. A high predominance of expositive resources (graphic and audiovisual) rather than interactive resources is observed’ (2007: 89). In other words information is displayed for an assumed passive audience but there is little attempt to use the interactive capabilities of the Internet to engage with stakeholders and potential stakeholders.

Engagement and responsiveness in CSR policies and practice

We noted above that simply publishing increasingly elaborate and lengthy CSR reports is not enough to convince stakeholders that their views are being taken into account and more importantly being acted upon at the corporate governance level. This suggests that the public relations role in CSR should not just be about presenting information, or primarily about promoting the organisation, but about engaging with stakeholders and most importantly demonstrating responsiveness to stakeholder views. In its most recent report AccountAbility (2014), the global think-tank on organisational and corporate accountability, suggests that:

In respect of the issue of stakeholder engagement Capriotti and Moreno (2007) would seem to indicate that for many business organisations the engagement process is lacking or at best remains in what Accountability refer to as the ‘first generation stakeholder engagement’ phase. In respect to the websites they studied they note that:

Owen suggests that the crucial question from a stakeholder accountability perspective has to be whether:

He notes that a particularly noteworthy level of responsiveness to stakeholder concerns appears in the Co-operative Bank’s 2002 Partnership Report. The Cooperative Bank’s approach is rare however and more typically, suggests Owen, references in CSR reports regarding responsiveness to stakeholder feedback tend to be couched in generalities and vague terminology making it impossible to gauge ‘how, if at all, stakeholder feedback influences corporate strategic decision making’ (2005: 9).

CSR reports may devote significant space to describing the stakeholder dialogue processes that have taken place but, according to Owen, ‘For stakeholder accountability to be established and associated reporting exercises to be meaningful in empowerment terms, a far more pluralistic form of corporate governance must be instituted’ (2005: 26). As we noted above, a key demonstration of good will from the deontological perspective is the demonstration that the company/stakeholder relationship in respect to CSR policies and activities is based on the mutual recognition of rights and responsibilities on both sides. In respect to this issue of corporate governance, many corporations report the inclusion of external members on their advisory panels that help shape CSR policies and practices. While such measures are a step in the right direction towards more accountable and transparent corporate governance structures, Owen notes:

How a company responds to its stakeholders is key here, AccountAbility AA1000 issued an Assurance Standard for CSR relationships and they highlight the key principle of responsiveness that they state requires that ‘the Assurance provider evaluate whether the reporting organisation has responded to stakeholder concerns, policies and relevant standards and adequately communicated these responses in its report’ (2003: 18). However, this should be viewed as an important opportunity for PR representatives who can facilitate a process that will offer stakeholders a meaningful voice in the corporate decision making arena and thereby demonstrate concretely the deontological concepts of duty and responsibility that underpin many of the statements in CSR documentation. Indeed it is a role they must fulfil in order to avoid the charge that their role, and that of CSR initiatives more generally, is nothing more than the cynical instrumental exploitation of stakeholders for the benefit of corporate reputation.

C@se Study

Csr, The Financial Crisis and Stakeholder Communication in the Irish Banking Sector

The Irish banking sector is in some senses an extreme example, and in other ways typical, of the catastrophe that overtook financial institutions around the world at the end of 2008 and early 2009 and indeed that still impacts upon current political and public policy decision making. The fracturing of the global financial system had a disastrous impact on all Irish financial institutions. Irish banks listed on the London Stock Exchange saw their share prices plunge 90 per cent in the 12 months up to December 2008 (Bloomberg.com 21/01/09). Facing a financial sector meltdown at the end of 2008, the Irish government took the unprecedented step of guaranteeing all bank deposits and debts in Irish banks for two years (a loan guarantee worth over 550 billion euro. To put this into context, this was a sum that exceeded the German government’s guarantee to German banks and that amounted to almost three times Ireland’s annual GDP. The Irish government also provided a multi-billion euro bailout for three of the biggest banks, Bank of Ireland, Allied Irish Bank and the Anglo Irish Bank, taking a 25 per cent stake in each, and nationalised several banks in the sector. In March 2009 it also bought up the toxic debts of most of Irish registered banks, both domestic and foreign owned, at a potential cost of 80 billion euro. One price that the domestic banks have had to pay for this government help was to sign up to a range of Irish Banking Federation requirements, one of which is that they will produce joint bi-annual transparent CSR reports and present them to the office of the Irish Finance Minister. This was quite a culture change for Irish banks, some of which, in what was a relatively unregulated system, had never historically been required to provide any kind of dedicated CSR reporting.

This case study compares the CSR activity and reporting of two banks operating in Ireland accessed just over half a decade after the financial collapse and subsequent government bale out. One is the Dutch-owned Rabobank that entered the Irish market by purchasing the Irish bank ACC in 2002, the other is the Bank of Ireland, the oldest and historically the most important Irish bank. One thing that the Dutch bank brought with it to the Irish financial sector was a focus on CSR issues and an apparent concern to engage with a range of stakeholders on all aspects of its business practice. This was the way it operated in the Netherlands and it claimed to import this culture to all its overseas operations including its Irish subsidiary. Given that the Irish government still holds significant stock in the Bank of Ireland, one may also expect to see a high level of transparency in respect to its CSR activities and a commitment to dialogue with its stakeholders. Following the approach of Capriotti and Moreno (2007), this case study will investigate best practice in CSR disclosure and stakeholder engagement by analysing the presence of key CSR indicators on the websites of the respective banks. It will also assess the nature of the stakeholder communication, with a particular focus on how ‘expositive’ or ‘interactive’ (Capriotti and Moreno 2007: 89) the communication approach is. A predominance of expositive communication would mean the bank relied on merely displaying information about its CSR activities that, as we know from the Fleishman Hillard (2007) study cited above, does not meet with the approval of stakeholders. A high level of ‘interactive’ communication capability is viewed as potentially resolving this communication barrier between stakeholders and corporations (Capriotti and Moreno 2007). Key to the development of interactive communication, on this view, are online technologies and social media that can facilitate dialogue (blogs, forums), create opportunities for feedback (dedicated email contact addresses, online opinion forms) and ‘converse’ with stakeholders through the new Web 2.0 media (Facebook, Twitter). Of course organisations may exaggerate claims that they engage in interaction with stakeholders, therefore we drill down into the information presented in the websites to assess the real level of stakeholder engagement and just how much the views of relevant stakeholders actually influence CSR policy and practice.

With respect to the issue of the presence of CSR indicators, this case study investigation has, like previous studies (O’Donovan et al. 2001; Capriotti and Moreno 2007) relied upon a combination of internationally recognised CSR indices to construct a table of best practice measurement. The CSR indicators identified are based on the requirements for disclosure in CSR reporting from the following sources: World Business Council for Sustainable Development (2000), United Nations Global Compact (2002), Global Reporting Initiative (2006) and Business in the Community (BITC). BITC operates in both the UK and the Republic of Ireland and the categories adopted are from their 2007 Responsibility Index (BITC 2007). The CSR issues are listed in the table below (Figure 9.1) along with a brief definition and an indication of the reference source.

What should be made clear about the reporting criteria in the Figure 9.1 is that it is not enough for the organisation to merely claim it is committed to a particular CSR principle, e.g. environmental impact. The minimum requirements are that it must present a clear explanation of what it means by this indictor and how it applies it in practice.

Figure 9.1 CSR issues, definitions and indicator sources

Key: World Business Council for Sustainable Development (2000), United Nations Global

Compact (2002), Global Reporting Initiative (2006), Business in the Community (2014)

Figure 9.2 Presence of CSR issues on the corporate websites (including online CSR reports/corporate annual reports) of Rabobank and Bank of Ireland

As can be seen from Figure 9.2 the presence of CSR issues on corporate websites in Rabobank and Bank of Ireland (websites accessed 25/06/2015) reveals an apparently fairly similar picture. Most key CSR issues are present on the website of the Bank of Ireland and all are present on the Rabobank website. The exceptions being that there is no explanation of how the Bank of Ireland in its business activities discharges its responsibilities towards human rights or the economic impact of its activities. Interestingly, despite the bank being listed as a member of Business in the Community in both Northern Ireland and the Republic of Ireland there is no indication of how it applies the BITC Corporate Responsibility Index in practice. It should also be noted that some of the documentation of the Bank of Ireland’s CSR activity did appear in the joint Irish Banking Federation CSR report submitted bi-annually with the other Irish owned banks in the Irish financial sector. As noted above, this is to comply with the requirements imposed upon them by the Irish government, under the Credit Institutions (Financial Support) Scheme, after the financial bailout of these institutions. The CSR reports on the Bank of Ireland’s website up until 2014 consisted of a very brief four-page document and it wasn’t until 2014 that a substantial 50 page report entitled Responsible Business Report first appeared. The Bank of Ireland has one audio visual resource, a short web film about a staff member’s work with a community sports club.

In contrast to the Bank of Ireland, how Rabobank engages with each CSR issue is explained and discussed in depth with a wealth of pertinent information and case study examples of the bank’s activities. The information is not just presented as written text; there is frequent use of audio-visual material such as podcasts, webcast and web films. There is also a detailed explanation of stakeholder dialogue on the webpage dedicated to this issue where 20 different stakeholder groups, which the bank regularly consults on policy and practice issues, are listed. Rabobank explains in detail how it measures its practice against a range of CSR indicators including the United Nations Global Compact and the Global Reporting Initiative and it publishes the reports of several independent CSR rating agencies including the Corporate Sustainability Assessment of SAM (Sustainable Asset Management Group) and Oekom. It should be emphasised that the bank is not selective in its reporting in this area. It does highlight that it received an A+ rating from the Global Reporting Initiative but publishes in full Oekom’s Corporate Rating report which awards it a C+, a rating which suffered to some extent because of its relatively poor score in ‘eco-efficiency’. The fact that both banks appear to tick most or all of the boxes in regard to the presence of CSR issues in their corporate reporting should not obscure the fact that on closer analysis the Bank of Ireland falls a long way behind Rabobank when it comes to detailed explanation and transparency in respect to its actual CSR policy and practice.

A key difference between the banks is immediately apparent in Figure 9.3 when one assesses how the two banks deploy the interactive capabilities of new media technologies to open up the potential for dialogue and engagement with stakeholders. The only interactive resource on the Bank of Ireland website open for the general public is the email facility. It is a general email address so it theoretically can be used to contact the management on any of the CSR issues. If you are a Bank of Ireland account holder you can access a resource called boards.ie; however, of the 3,792 comments only one contained what could be interpreted as a CSR question. This related to the introduction of paperless bank statements and the perceived benefits to the natural environment; all other questions were about financial matters. In contrast, Rabobank has several dedicated email addresses in different CSR webpages to allow the user to

Figure 9.3 Expositive and interactive resources

engage with a specific expert on an issue and there are also contact forms on each CSR webpage where issues can be raised or a complaint made about Rabobank’s CSR policies and activities or that of any of its clients. In either case the bank promises to provide a written answer within 30 days. For over a decade Rabobank have had an easily accessible fully interactive blog (available via RSS feed) that various staff members from across the organisation participate in, and comments are invited from all stakeholders. Many of the topics focus, as one would expect, on issues such as investment or pensions but debates about the environment and social and ethical issues (e.g. investing in countries with poor human rights records) are also present. For almost a decade Rabobank’s website has also provided links to its Web 2.0 social media such as Facebook and Twitter which are up to date and widely used by a wide range of stakeholders. In December 2011 the Bank of Ireland launched a Facebook page and joined Twitter and has used these tools primarily as a promotional and customer enquiry resource. They have also, however, used them to publicise community charitable initiatives and their 2014 sponsorship of Dublin’s LGBTQ Pride Festival; in this sense they are at least potential interactive resources for the CSR issues of ‘social impacts’ and ‘human rights’.

The banking industry underpins capitalism in a uniquely fundamental way, at least this was the message that Western governments sought to communicate to citizens during the massive bailouts of the financial sector. But if it is the case that the financial sector is fundamental to late capitalist society then this invites some further meditation on the relationship between financial institutions and society. Western governments presumed an obligation or responsibility to the banks and this was the justification for propping them up with enormous amounts of taxpayers’ money. This does lead to an interesting question. Does this obligation work both ways? Do banks now have an additional responsibility to society? It seems that some banks such as Rabobank, the only A+ (Standard & Poor’s) rated bank in Ireland, take the view that CSR is an integral part of what underpins their business activities while others, such as the Bank of Ireland, despite some positive developments still offer very little detailed explanation of how CSR is integrated with their business activities. Their respective corporate websites, increasingly the public face of all organisations, illustrate this difference very clearly.