The Management Of Sustainability At Barclays Marketing Essay

The Management Of Sustainability At Barclays Marketing Essay The history of Barclays was developed in 1960 in London by John Freame and Thomas Gould started their business as trading goldsmith bankers. In the year 1736, when James Barclay joined the organisation the name Barclays became connected with the company even though it was not until 1896 then the company is known as Barclays bank. Then is 1896 the company joins 19 other private banking businesses to form Barclay Company Limited, with 182 branches and a deposit of  £26m. By the year 2009 Barclays bank has established in 59 countries with 140, 000 employees throughout the world due to globalisation and the advancement of technology. Barclays is a major global financial services provider engaged in personal banking, credit cards, corporate and investment banking, and wealth and investment management. According to the annual report for 2012, in order to have a sustainable basis, Barclays had to store trust and restore performance. There was also a change in the remuneration packages, a s they prefer paying according to the performance relationship. In relation with shareholders they have increase the share from the total net income and they mention that it is essential to the business and those employees working in an extreme competitive international environment. Barclays also states that their hitting their targets which satisfies them. They claim that their doing work which is socially important and useful to the environment, as well to generate a sustainable return for the shareholders. Sustainability is an increasingly important theme for businesses. At the current situation, the concept of sustainability has been broadened to include not only environmental consideration, but also economic and social consideration claims Elkington (1998). If these factors are implemented in the business, it would be successful. Sustainability is essential for Barclays competitive advantage as Barclays has various competitors in the market. Barclays sustains its competitive ad vantage by creating a size and diversity for the business as well as the quality, character and the relationships with their customers. Diversity has allowed them to build a sustainable business by delivering an operational excellence, investing in innovation and managing their risks. 2.0 Findings 2.1 Sustainability /Sustainable development Sustainability refers to the ability of a mankind to continue indefinitely by making a zero impact on the environmental resources (Blowfield Murray, 2011). Crane Marten (2010) states that sustainability is defined as a long- term maintenance of systems according to environmental, economic and social considerations. Sustainable development is the process by which mankind moves towards the ultimate goal of sustainability. The goal of sustainable development is to enable all people throughout the world to satisfy their basic needs and to enjoy a better quality of life without compromising the quality of life of future generations (HMG, 2005). 2.2 Business Sustainability Business sustainability is known as adapting to the business strategies and activities that meets the needs of business stakeholders today and the near future. There are few frameworks which are used to measure the sustainability of the business, and one of the best ways of testing sustainability would be the Triple Bottom Line (TBL) method introduced by John Elkington. It consists of three important elements which is Economic, social and Environmental. It generates the basis of both Global Reporting Initiative (GRI) and Sustainability Balance Scorecard (SBSC). Now this report would move on to evaluate the Triple Bottom Line (TBL). 2.3 Economic Sustainability The economic dimension, sustainability is concern about the organizations impacts on the economic environment of its stakeholders and on economic system at local, national and global levels. A narrow concept of economic sustainability focuses on the economic performances of the corporations itself: the responsibility of management is to develop, produce and market those products that secure the long-term economic performances of the corporation (Crane and Matten, 2010).The economic perspective on sustainability is strong and stable economy would create jobs and incomes for society in order to provide basic standard of living. 2.4 Environmental Sustainability The environmental sustainability is concern about organisations impact towards the diverse ecosystem, like water, land and air. The basic principles of sustainability in environment perceptive concern the effective management of physical resources so that they are conserved for the future (Crane and Matten 2010). Basically, it provides resources for human activities and acts as sinks which absorb and recycle human waste such as microorganisms. It is also known as the main resource provider to people, such as water, soil fertility and pollination. 2.5 Social Sustainability The Social Sustainability focuses on the impacts of an organisation towards the social structure which it operates. The development in social perspectives on sustainability has tended to trial behind that of the environment and economic perspectives (Scott, Park and Cocklin, 2000). The main social point of sustainability is the key justice. It deals with a strong, healthy and fair society. It provides promotion for personal well- being, social cohesion and inclusion and equal opportunities for the society (HMG, 2005). 3.0 Measuring Businesses Sustainability 3.1 Sustainability Balance Scorecard Kaplan and Norton (1992) developed the balanced scorecard in order to give managers a more comprehensive view of business performances. Balance scorecards combine both qualitative and quantitative measures, acknowledge the expectations of different stakeholders and relate an assessment of performance to choice of category. It contents of four perspectives financial, customers, process, learning and growth. The sustainability balance scorecard consists of four elements, which would be financial, internal business process, customer, learning and growth. It helps the organisation to breakdown corporate level measures which will help manager and employees to look at what could be done to make the organization to improve internal and external communications and monitor organisations performances against goal. Barclays has been using sustainability balance scorecard in measuring their organisation sustainability. According to the annual report in 2012 in mentioned that the economic environment in Barclays main markets was marked by generally weak or negative growth (as measured by GDP), which has affected business, consumer and investor confidence across these regions. Economic performance in the near term remains uncertain and is expected to be subdued. As an example, to overcome this situation Barclays expects to incur a restructuring charge of approximately  £500m in the first quarter of 2013 and costs associated with implementing the strategic plan of approximately  £1bn in 2013,  £1bn in 2014 and  £0.7bn in 2015 ( Barclays annual report, 2012). 3.2 Global Reporting Initiative Social accounting is the voluntary process concerned with assessing and communicating organisational activities and impacts on social, ethical, and environmental issues relevant to stakeholders. Corporate organisations involves in social accounting for both practical and moral reasons. The main four reasons are internal and external pressure, identifying risks, improved stakeholder management and enhanced accountability and transparency. A good social accounting is complete when a scheme in place attempts to the activities like Global Reporting Initiative (GRI). Crane and Matten (2010) states that Global Reporting Initiative (GRI) is an international multi-stakeholder effort to create a common framework for reporting on social, economic and environmental triple bottom line sustainability. Barclays has reported against the Global Reporting Initiative (G3) Indicator protocols and Financial Sector Supplement. In 2011, Barclays have self-declared for their GRI performance application to be B+ (Annual Report Barclays, 2011). 4.0 Corporate Social Responsibility (CSR) CSR is a set of measures that business could take in order to become sustainable. Corporate social responsibility (CSR) is known as a business initiative to evaluate and take accountability on the organizational effects on the environment and impact on the community which is meant that it benefits the organization as well as the community. Rionda claims that CSR is alternatively referred to as corporate citizenship, which essentially means that a company should be a good neighbor within its host family (Rionda.Z, 2002). Organization that is socially responsible would be rewarded with more satisfying customers, which will help to meet the organization goals and expansion of the business. CSR is also as one of tool for brand reputation for business which is developed globally. As an example, a company which has a strong global brand and consumer pressure will be the key drivers towards CSR practices (Zadek, 2004). Most of the companies nowadays have decided to get involved in CSR becau se they realize that in order to stay productive, competitive and relevant in a rapidly changing world, they have to become socially responsible. CSR has also been defined by Moir (2001) who states the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large. 4.1 Carroll CSR Model Source: A Carroll (1991) The pyramid of corporate social responsibility, Business Horizons, July-August, pp-39-48. The study on Barclays CSR is based on the Carroll four part CSR model that has helped Barclays to meet the two stage of this model which includes economic and legal. Barclays has reported all their CSR activities clearly which gives an indication that Barclays gives an impression to be a sustainable organization and Barclays has been doing well in all these aspects to maintain their sustainability. Barclays seem to give much attention to aim on their CSR activities at stakeholders to contribute to economic, environment and social sustainability to remain sustainable. Now this report will move on to discuss on the CSR policies adapted by Barclays. 4.2 Barclays CSR Barclays has been actively engaging themselves in CSR activities. Barclays believes business can have a positive impact towards the community they serve if CSR is being implemented. Ever since they have start operating their first bank in 1960, they have dedicated their selves to trust and respect their customers and shareholders. Barclays is involving themselves in CSR activities such as, environmental, social and economic. As an example, Barclays Bank in Kenya state that, in order to stay in business for another100 years, they need to be partners with their stakeholders to maximize the opportunities presented by economic, social and environmental sustainability issues, as well as collaborate to minimise the associated risks in both direct and indirect ( Barclays Annual report, 2010). This report will now evaluate the CSR activities of Barclays. 4.3 Environmental Barclays Environmental sustainability approach is to reduce their impacts on the environment. They are not only focusing on the direct operational impact, while they are also looking at wider influence through their lending and investment activities. To make this more efficient Barclays has introduced climate exchange program. This program emphasizes on waste management, water use and paper use. They are designing, building and operating in way that reduces the impact on the globe. There are three main issue which influences Climate exchange Program. The first one would be developing products and services for a low carbon economy, and then followed by managing climate change risks which means managing social and environmental risk in lending and finally managing their own carbon footprint (Citizenship Report, 2011). With adopting all this environmental policies, Barclays was able to meet a sustainable environmental operation to their business. 4.4 Social In social sustainability Barclays is involved with the community. In 2012, Barclays global community investment team managed to engage 73,000 staff in volunteering, fundraising and support programmes that benefited an estimated two million people worldwide (Ainsworth, 2012 Third Sector). Barclays states that in order to have social sustainability two things beings involved; community investment programs and employee programs with the direct efforts of employees. The community programs which Barclays practices are Building Young Futures that aims to equip 74,000 disadvantaged young people in six countries Brazil, Egypt, India, Pakistan, Uganda and Zambia with the skills to help them fulfil their potential with a partnership between Barclays and UNICEF( Barclays citizenship plan , 2012). This program is introduced to help the poor community in these countries to have a proper skill and self-confidents in securing their income with a job or set up a small business with skill and knowle dge provided by this program. The main aim of this program is to reduce unemployment rate among the younger generation in these countries. As an example, in the first four years of their partnership, Building Young Futures gave more than 600,000 young people: improved education opportunities; financial, employment and enterprise skills; and support to manage their money (Barclays citizenship plan, 2012). Besides that, Barclays has introduced a citizenship award in 2012 to recognize and appreciate the work contribution done by their employees for community. The employees in Barclays are actively involved in fund raising for the local community around the globe. For instance, Nearly 1,000 customers and employees took in the sights of the UK capital by night on a 10-km walk, as they raised almost  £100,000 to support UNICEF and UK broadcaster Heart radios Have a Heart charity (Barclays citizenship plan, 2012). With this programmes it would help the local communities to achieve financial independence and security in their lives. Furthermore, these programmes applied towards the community would help Barclays to be more sustainable in a social context. 4.5 Society/ Diversity Aside making huge profits and meeting organisation goals, Barclays have also created a culture where diversity is valued and respected. Barclays mention that their global diversity strategy in place across the organisation, and they are continuing to extend and update this to reflect industry best practice and to meet the expectations of stakeholders and customers (Barclays, 2011).As an example, Barclays have worked closely with external recruitment firm to let them know their diversity priorities, so they could provide them with huge number employees for recruitment and selection. This method is used to measure the employees potential and hard work and to ensure individuals with disabilities have equal rights and job prospects. Barclays has given priorities to diversity as want to meet an equal gender workforce and to support co-workers and customers who has disability. For instance , the UK Corporate Banking business rose to first from fourth place among its peers in terms of clien t satisfaction, and a business in their Wealth and Investment Management division won Best Customer Experience Award in Financial Services in the 2011 Customer Experience Awards. Now this report would move on to access the economic sustainability. 4.6 Economic Barclays practices transparency to their stakeholder. Based on the findings, Barclays believes that the best way to support their stakeholders is by operating a strong, profitable and growing business, which creates jobs and contributes to the economic success of the communities in which they live and work (Citizenship Report, 2011). Transparency is the degree to which corporate decision, policies, activities and impacts are acknowledged and made visible to relevant stakeholders (Crane and Matten, 2010). Jenkins Barclays CEO has mention (International Business Times)that he is committed to building a better bank with massive changes that will boost up shareholder returns over the longer term and based on the 2012 annual report Shares in the group rose 4.2 per cent (Baccardax, 2013). According to the analysis on Barclays CSR activities that theyre involved with, it gives a reflection that Barclays supports the Stakeholder theory. Stakeholder theory seeks to balance the interest of a r ange of economic, social and environmental stakeholders. The theory was been developed by Edward Freeman (1984) who states that a stakeholder of an organization is any group or individual who can affect, or is affected by, achievement of the organisations objectives(Freman 1984:46). For a more precise definition (Evan and Freeman 1993) has suggested two principles: Principle of corporate right, which means the corporation has the obligation not to violate the right of others and Principle of corporate effect which means companies are responsible for the effect of their actions on others. Stakeholder theory is known as the utilitarian ethical stances that give a balancing of stakeholder interests in decision making using a triple bottom line approach. Stakeholder theory is essential in multinational organisation like Barclays and they are sustaining with this approach. 4.7 Weaknesses of CSR policies in Barclays Barclays seems to provide information that theyre sustainable however there are few weakness and risk in the CSR policy. In early 2013, according to The Guardian news, Barclays was preparing to hand its chief executive Antony Jenkins a bonus of at least  £1m for 2012 and it is a year when the bank was fined  £290m for its part in the Libor-rigging scandal and set aside a further  £1bn for mis-selling payment protection insurance (The Guardian ,2013). Besides that, Barclays was under pressure from some of their shareholder demanded for a repay of past bonuses from its new boss. It was surprising that Barclays could be origins of the recession in the credit crunch caused by reckless bank lending. Latest news on Barclays that they will become a self-service-oriented company, thereby allowing the remaining staff to focus on delivering added value to its customers and they have mention that Barclays is changing (The Telegraph, 2013). With this information Barclays is seen as not con sistent with their policy. On the other hand, they still could be an omissions supporting by mentioning that Barclays is still a sustainable organisation. As Freidman (1970) argues that social and environmental sustainability are the responsibility of individuals and the government. The whole Barclays management shouldnt be blame for this issues it could possibly be an individual who is liable. 5.0 Summary Based on the outcomes made for this report Barclays appears to be a sustainable organisation. As seen in the outcomes, Barclays is actively engaged with many CSR activities are have updated them in GRI as well as SBSC. Barclays has establish themselves as the most recognised and respected organization in the world, to sustain it Barclays plans to continue to expand rapidly and commit to more CSR activities to be more sustainable. 6.0 Recommendation The recommendation is made after evaluating Barclays CSR activities and from my point of views on what Barclays should do in achieving a sustainable organisation. Barclays should emphasize on social and economic sustainability as their lack in this both activities. I agree that Barclays is involved in economic and social CSR activities, while be a global organisation its suggested that they should give emphasis to strategic importance of CSR drivers for globalization. As an example, Barclays is engaged in banking industry for many years, they seem expand their business to a more wide area in the world which is due to globalization and this will help them to achieve a sustainable business and profitable organisation. Besides that, having CSR activities which engaging public will gain more popularity for Barclays as it will reach the public faster than indoor activities. Barclays should also concentrate on the Utilitarian ethical stances of social responsibility. It seeks a balanced st akeholder interest in decision making using a triple bottom line approach which includes economic, environment and social which will be an advantage for Barclays. 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