Profile: Barclays – building better corporate responsibility

Big banking is big money. Big money means big publicity, and with that comes big responsibility.

With profits of £5.28bn for the financial year 2004/05, and 113,000 employees in 60 countries, the challenges faced by Barclays are enormous. Spiralling consumer debt, financial exclusion and growing demands for greater transparency and better environmental and social standards in project finance are all turning the spotlight on the banking industry.

But over the past year, Barclays has not only leapt from 32nd to 3rd place in Business in the Community’s Corporate Responsibility Index, it was also short-listed for Company of the Year in this year’s Impact on Society awards.

Briefing spoke to Alastair Camp, Barclays director of corporate responsibility, and Rachael Barber, head of global community investment, to look at what has been happening behind the scenes.

Be yourself

Key to taking forward the management of its responsibilities has been developing a better definition of what Barclays’ responsibilities actually are, through extensive engagement and consultation with stakeholders. The company has looked at its core business purpose and used this as the pivot for its CR and community investment strategy.

John Varley, chief executive of Barclays, notes in the company’s most recent CR report: “We firmly believe that we make our greatest contribution to society by being good at what we do, and doing it in a responsible way – providing products and services that help customers realise their financial goals, that drive economic growth, and that sustain a healthy financial system.”

It is no surprise, therefore, that Camp, who has been in post since December, brings to the role thirty years of operational experience within the company. “CR is really a combination of a group of disciplines and areas of strategic activity which are fundamental to running a business,” Camp tells Briefing. “ I don’t think there are enough people involved in CR who’ve got much of a business background. The way we look at it, CR is integrated in the strategic running of the business.”

Strategy and governance

Barclays’ CSR report emphasises its objective of practising responsible banking, rather than simply being a bank that does some things responsibly – the familiar challenge of how to embed CR throughout an organisation. ”Our new focus on responsible banking concentrates on the issues that matter to us, making corporate responsibility inextricable from our strategic goals,” he says. At Barclays, this starts in the highest echelons of the company, with “both intellectual and emotional buy-in” from the senior team, says Camp.

Gary Hoffman, executive vice chairman, has specific responsibility for CR on the board, while Varley is the group’s main champion of CR. There are annual discussions on CR strategy with the group executive committee and at group board level.

Barclays has also set up a brand and reputation committee, as a sub-committee of the executive committee, to protect and enhance the company brand by considering issues that could affect reputation. It is made up of Barclays chief executives from all its businesses, ensuring an international perspective.

A governance standard on corporate responsibility underpins the bank’s approach to CR. The standard articulates the main risks faced by the group and is reviewed regularly by a board risk committee. Currently it highlights issues around customers, suppliers, community, environment and employees.
Camp is accountable to the board for the implementation of the standard. He leads a fourteen-strong team based at Barclays’ London headquarters.

The team comprises four departments – community investment, financial inclusion, public issues and environmental management. Situated within the corporate affairs function, its brief is to develop CR strategy at group level, with a worldwide mandate.

Following the recent acquisition of a majority stake in South Africa’s Absa, Barclays is becoming an increasingly global business. Each operating company has its own structures for supporting CR locally, accountable to its own executive leadership team. The group team provides an overarching strategy and facilitates dialogue between all operations.

Engaging with stakeholders

Stakeholder engagement plays a key role in informing the bank’s approach to CR, using both formal and informal mechanisms. “Every year we hold a detailed independent stakeholder feedback exercise to determine whether the issues we have identified are still the ones with the most currency in the minds of other people, “ says Camp. While Barclays sees customers, employees and shareholders as its primary stakeholders, it also maintains contact with national and international NGOs both directly and through collective initiatives.

For example, Barclays is the only bank in the UN’s Business Leaders Initiative on Human Rights, a group of companies currently developing a framework to help businesses better manage human rights. It was also one of the four founding banks of the Equator Principles, a set of environmental and social standards for project finance. More recently Barclays has been developing a set of sectoral lending guidelines, which it plans to share with around 160 other banks, to help raise best practice in banking globally.

The company’s new issues-led approach to reporting on CR fed out of an annual consultation on its corporate responsibility report, with representatives from a wide range of parties, including consumer groups, government and media.

Community involvement helps Barclays glean an understanding of the wider context in which it operates. One of the ways in which Barclays taps into the knowledge of its employees is through an annual opinion survey, which includes questions on perceptions of how responsibly the company conducts its business. Internal employee networks within the company take forward ideas and provide feedback on issues such as disability or cultural diversity.

Re-thinking community investment

Five years ago the bank’s approach to community investment was “much more fragmented,” Camp says. Having defined its core responsibilities, Barclays has recognised that “while it is important for large companies to do things that are philanthropic and for the social good, it is also important that there is some link to the core business purpose.” This means a new focus on helping more people out of debt, poverty and disadvantage, with programmes in the areas of money advice, financial literacy, employment, entrepreneurship and financial inclusion.

Rachael Barber heads the global community investment team, developing a global investment strategy and setting strategic themes to which the group adheres. She sets the budget for global activities and takes the lead on group-wide initiatives. At the group level the community partnerships committee has representatives from different parts of the business including company chairman Matthew Barrett.

Barclays set its annual community budget for the UK and Africa using the PerCent Club standard, whereby 1% of pre-tax profits is invested in community programmes. Although a portion of funds flow to the centre of the group to support big projects, Barclays tries to keep cash where it is earned so that countries can also invest in projects on a local level.

While most progress has been made in aligning community investment with Barclays’ core business goals in the UK, it is looking to roll out the same sort of model internationally. Communication and dialogue are essential for getting everyone on board. This is not a ‘one-size-fits-all’ approach. Barber is to visit the company’s African operations to look at how to integrate community investment, and which direction it should take in an African context.

Workshops for community managers from around the world bring together people quite regularly from every region and every business unit to share ideas and best practice, in a process that is as much about gathering ideas and inputs as it is about communicating strategy.

More than money

One of the main reasons for aligning the investment strategy with Barclays core business is that this enables the company to contribute “much more than just cash”, says Barber. New possibilities emerge around the deployment of skills and expertise and the development of tailored products and services. Last year 26,000 Barclays people took part in some form of community activity. Barber and Camp comment on the shift towards skills based volunteering that taps into professional skills sets to make a difference – helping people to set up a business or building financial literacy for example.

Working in partnership

”We take a much more partnership-based approach in our community investment than previously,“ Barber says. “We are working together with our partners to understand each other’s objectives and make sure that those marry in the middle with a great program that creates great social benefits.”
This year Barclays is working with children’s charity NCH and Help the Aged, in a three-year scheme to boost financial literacy, money management capability and financial inclusion.

The bank had clear objectives for what it wanted to get out of its partnerships, as well as the resources it had available. Projects had to be related to the business and centre around debt, financial literacy, employment or entrepreneurship. Opportunities for employee volunteering were also key. “We really wanted to use employee skills to make a difference,” adds Barber.

“It isn’t just the number of people we’ll help that is of interest to us,” says Barber, “ We are also going to get a lot of learning from the partnerships ourselves. We meet with our partners regularly, sit on their steering groups and work with them very closely. It’s a lot more hard work than writing a cheque and waiting for results, but I think it will pay off in the end.”

A collaborative approach

The bank’s work on financial inclusion reveals how Barclays combines commercial expertise with insights from its community programmes. For example, Barclays developed a cash card account in 2000, which gives people access to basic banking without allowing them to become overdrawn. However, through experience gained during a pilot project with homelessness charity The Passage last year, Barclays has made changes to the product to make it more accessible for homeless people. These include a more flexible process for identification and verification, and the addition of standing orders to the package of services offered.

“Thinking about financial inclusion in both social and commercial terms is a good mindset to have and we approach this issue as we would any other business challenge,” Barclays says in its latest CSR report. The company is currently piloting an initiative to increase access to banking for the communities in Ghana. The programme combines commercial and social goals drawing on the expertise of group’s financial inclusion team and the local knowledge of its Ghanaian business unit. Barclays Ghana worked with representatives of susu collectors, traditional micro-banking providers who keep their clients money safe in exchange for a small fee. Barclays now offers susu collectors deposit accounts as well as funds to lend on to their clients, bringing some of the benefits of formal banking to poor Ghanaians who could not otherwise access existing products because of the small sums of money they have available.

When tackling broader social issues, however, the bank is aware of the limits both of its capabilities and of its responsibilities stating: “we have to be realistic about what we can do ourselves and what can be better done by the government, or community organisations.” This is why it emphasises a partnership approach in dealing with the issue. “Working with Help the Aged gives us a distribution capability to reach older people, through its telephone help line and centres around the country. Barclays provides funding and employees to get involved, “ says Camp.

Spreading the word

Barclays customers may have noticed that despite active engagement on so many social and environmental issues, CR has not been used as a selling point for the company’s customers. Currently charity pin badges for sale on the counter are about the only indicator of any sort of CR you’ll find in a local branch and you are more likely to find a leaflet selling discounted cases of wine with a credit card bill than details of where the bank invests your money.

All this is about to change, with the development of a new communications strategy. According to Camp, the CR team has two main priorities – embedding CR across the organisation – and tapping into the brand value that good CR builds by making sure that people know what Barclays does. The corporate website now includes a more detailed CR and community affairs channel, and Barber is working with the marketing department to grow customers awareness of the bank’s community investment.

As ever though, these actions are all underpinned by solid business imperatives – the knowledge that stock market valuations are hugely influenced by the market’s perception of the value of a brand. And this has as much to do with emotional resonance as business performance. “We’re very much on the case,” says Camp.