Corporate social responsibility at French savings banks: A vector for development of regions and their citizens
Businesses play a fundamental role in our modern societies and for several decades their social responsibility has been a major concern. News & Views broached the subject with FNCE CSR DIrector Cédric Turini, who coordinates the efforts of the 15 French savings banks and their 35,000 employees in the field.
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What are the CSR principles of France’s National Federation of Savings Banks?
The National Federation of Savings Banks, or FNCE, represents 15 Caisses d'Epargne active in mainland France as well as in the overseas territories. The first savings bank was founded more than 200 years ago. Today, the FNCE plays a role in defining, coordinating and guiding the CSR actions of the Caisses d'Epargne, which they put into practice in a large number of their activities, including commercial. These CSR actions go far beyond mere communication and marketing. This is linked to the fact that we are cooperative companies with a historic commitment to our territories and to our 4.54 million members, mainly individuals, each of whom has the same right to vote in general meetings. In addition to being a model of democratic governance, this model is “non-delocalizable” and requires us to contribute to the development of our territories, if we wish to continue to develop.
It is a win-win operation, in which the Caisses d'Epargne can only prosper when the regions and their inhabitants also prosper. We are, so to speak, part of a local "ecosystem" unlike fintech start-ups or neobanks whose action is focused only on services with high added value. Also, they are unlike some large multinational companies which routinely outsource part of their activities when these are no longer considered profitable enough.
The French savings banks don’t have that mentality at all. On the contrary, we are ready to develop less remunerative activities if they allow people in fragile situations to find their place in society.
This naturally leads us to financial inclusion, an important pillar of your CSR policy.
In Caisses d'Epargne, financial inclusion is reflected in financial education actions developed by Finances et Pédagogie and, on the other hand, by the microcredits offered by Parcours Confiance. Personal microcredit is a springboard for people on a low budget but who nevertheless have the capacity to repay. Customers use the two to three thousand euros of a micro-credit to pass a driving license, buy a car to go to work or to improve their housing. They are assisted by specialised Caisse d'Epargne advisers and work in close partnership with a large number of local associations, which are essential for social cohesion in our regions.
How does the savings banks commitment to the French regions translate into practice?
The Caisses d'Epargne are the main private financiers of local communities, social housing and the social and solidary economy. They are also a major employer, both directly - with 35,000 employees – and indirectly, with our suppliers and sub-contractors.
As a patron, last year we granted nearly €31 million to more than 1,100 local associations, mainly in the field of solidarity. Think of Restos du Coeur, the Red Cross or food banks, among others.
If I understood well, the Caisses d'Epargne preferably work with local suppliers?
Yes indeed. We buy around 90% of our products and services in France, mostly from local suppliers present in the territory of each savings bank, for a total purchase amount close to €1 billion. This represents around 23,000 jobs supported. These are tangible benefits for the economy that go far beyond the signing of a simple charter and catalogues of good intentions. Our responsible purchasing policy is based on a decentralised organisation, and is managed across the Group.
Climate risk is a reality that will have more and more influence on business activity. Do you take it into account?
It is a vast and complex subject. All banking activities are concerned, as well as all segments of our clientele. Individual customers have increasingly high expectations of banks on the subject and in particular on the allocation of their savings.
While the quality of the service and the tariffs remain the most important loyalty factor, climate-related concerns gain more and more prominence. That is not difficult to understand.
When it comes to climate-related risks, first of all there is the physical risk, the fact that our agencies, our buildings can be damaged. This is something that we have to anticipate. There is also the risk of transition; that is to say the forced march towards less polluting sources of energy, which has effects on the business model of the companies which produce or transform energy but also on the companies that consume a lot of energy and which are already subject to more restrictive regulations. Think for example of the building sector. We need to integrate these risks into our own credit risk assessment, which is what we are working on.
In this area, we are clearly in unknown territory, starting with the difficulty of assessing the environmental impact of certain activities and therefore assigning them an appropriate risk ratio. We must also educate our colleagues in agencies and business centers, while giving them the appropriate tools to carry out this work of tracking and advice vis-à-vis our customers, many of whom wish to develop their model. We are currently testing methods and will deploy training tools. Groupe BPCE is one of the leading banks on the subject and has volunteered to participate in the climate stress tests that will be organised this year by the Banque de France.
Why do you do this job, what motivates you every day?
In this business, you are really at the heart of social issues, such as precariousness, the environment but also social innovation and new forms of more responsible economy.
It is stimulating because it questions the raison d'être of the company and allows you to work with a large number of professions and partners, both on very operational subjects, the recycling of credit cards for example and subjects more strategic, such as employee engagement.
It is true that as director of CSR and in our organisational model, I do not have the power to impose decisions, so we must show conviction and a certain rigor to convince and motivate both our managers and our correspondents, even if now CSR has made a place for itself in the organisation of our companies. The question arises less of "why" it is necessary to do but rather of "how" it can be done. In this area, it is important that CSR is as integrated as possible into the company's activities.
What is the role of the regulator in CSR?
CSR is said to start where the law ends, but more and more the law is gaining ground, which is why companies must demonstrate that they are up to the challenges of our time, if they wish avoid things being imposed on them, as was the case for example with the law on the duty of care vis-à-vis suppliers.
This now requires companies to establish and publish a vigilance plan to prevent risks in their supply chain following in particular the collapse of the Rana Plaza in Bangladesh in 2013. We could also cite the Coppée-Zimmermann Law on equality between men and women. But it is also up to us to make our actions better known, that is precisely what we are doing at the Federation with our stakeholders and the general public.
CSR is an increasingly important subject, along with the evolution of society on all continents. Building a sustainable economy, one of the main objectives of the current European Commission, depends largely on the involvement of companies.