CSR reporting as a tool 2006 report
2006 marked the first year in which Danske Bank started reporting on their CSR activities. The reasoning for reporting was explained to be to provide a foundation for stakeholder dialogue, with the ambition of “a mutually value-creating business, which contributes to the local communities of which the Group forms part.” (Danske Bank, 2007, p. 7). Thus the focus seems to be on local communities and contributing to mutual value creation. The same explanation is found in the article database where the reasoning for engaging in CSR is explained as:
”Vi har besluttet at øge vores samfundsmæssige engagement og samtidig gøre det både mere synligt og målbart for omverdenen. Det er en naturlig konsekvens af vores strategi om at være lokalt forankret.” – Peter Straarup, Danske Bank CEO (Mikkelsen, 2006)
”We have decided to increase our social responsibility while making it both more visible and measurable to the outside world. It is a natural consequence of our strategy of maintaining a strong local engagement” – Peter Straarup, Danske Bank CEO (Mikkelsen, 2006)
The main theme in 2006 was “Corporate governance” and more specifically, the bonus structures within the banking industry. This issue is not addressed in the CSR report, which would indicate that the report was used mainly as a tool to address internal issues within the company, and not to establish a dialogue with Danske Bank’s environment.
At this point, Danske Bank is still a legitimate member of society, no threats to their legitimacy have yet emerged, and therefore there is not much need to address multiple stakeholders in the report.
2007 report
“The Group’s objective is to do what we do best – in a responsible way. Because we firmly believe that taking responsibility for the social and environmental effects of our business and applying the same principles within our business are an investment in the future.” - Peter Straarup, Danske Bank CEO (Danske Bank, 2008, p. 3).
The purpose of report is described as being directed towards ”investors, analysts and corporate customers with an interest in the Group at a strategic level.“ (Danske Bank, 2008, p. 6). It is interesting that the report does not consider the broad public as a stakeholder that is worth addressing in the CSR report. Claims are made on behalf of the bank that the ambition is to incorporate CSR into the core business. The two most prevalent themes in the CSR initiatives the same year are CSR communication and Corporate governance. Financial literacy is developed in this period, but the mentions surrounding charity are more prevalent in media, alongside the rising uncertainty sparked by the start of the financial crisis (at this time mostly contained to the United States, so no real indication was present to spark uncertainty in public perception) and bonus structures within the banking
industry. It seems as though that the public and the banking industry, at this point address the same issues, which is not surprising seeing as there was an upswing and seemingly everyone was financially stable. Therefore, there still were no indications of an oncoming disruption.
2008 report
In 2008, based on the CEO statement the Group continued work on CSR, renaming it “Corporate Responsibility” to show that the responsibility of the bank was not only contained to social responsibility. The change, as stated, is to ensure that responsibility is even more than before integrated in practices. In the same year, Financial Literacy programs have been launched as a means to share knowledge and using the Group’s core competencies to help children and youth to become better customers (Danske Bank, 2009).
Focus has shifted away from the main issues in the media, which were Public accountability, Corporate governance and Public perception and trust. These three themes are prevalent because uncertainty is rising in the public that concerns the very core of banks’ practices. Trust is beginning to dwindle and the public is critical with regards to bonus structures and sales motivations of bank advisors, but they are still very positive with regards to whether or not Danske Bank will be able to make it through the financial crisis. The public describes Danske Bank as being, “as financially solid as a treasury”. That means that although trust in the motivations for selling and remuneration practices is dwindling, it is still high with regards to the core values of the banks, being financially stable. Although Danske Bank admit in the report that times have changed and that the world is no longer financially stable, nothing in the reports or the public engagement shows that they are doing anything to mitigate the growing uncertainty in the public.
2009 report
“It is fair to say that managing financial matters is no longer business as usual. At the Danske Bank Group, we take responsibility by helping to stabilize the economies we are part of while managing the social and environmental impact of our business. In these difficult times, we are dedicated to working closely with our customers to help them adapt to the changing conditions. Supporting our corporate and retail customers is vital to society as well as to our business. Therefore, in 2009, we undertook measures to meet the challenges and become an even better bank for our customers.“ – Peter Straarup, Danske Bank CEO (Danske Bank, 2010, p. 4)
As the CEO statement shows, claims are being made of customer focus, which positively correlates with the findings in the articles, where the campaign “Mening” opened up a dialogue with the public, and through this dialogue successfully managed the public perception at the time. Changing conditions are described as stemming from the outside, with no attempts made of holding the bank or executives accountable for the predicament of the public in Denmark. The repercussions of the crisis are beginning to show, people are loosing jobs, homes and are threatened at their very foundation and are also the main reason why the public accountability theme peaks in this period. When something
terrible happens, someone needs to be held accountable, there are calls for transparency and the more these to go unnoticed the more prevalent is the Public perception and trust theme. The public is outraged that bank packages are administered all the while the banking industry is holding on to information, and lobbying heavily against regulation and in turn getting saved by the government.
Danske Bank involve the public by opening up to a dialogue, where the public is allowed to voice their concerns. This initiative explains the high levels of positive mentions in the media, people are voicing their concerns and most of them have to do with responsibility, transparency and accessibility.
Danske Bank responds to transparency calls by implementing a whistleblower system, and pledge to improve trust by pledging to implement 24 initiatives. Not surprisingly they are not specific about the contents of these initiatives, but seeing as they are justified as being oriented towards building trust, they fall under the category of public perception and trust.
2010 report
In 2010 Danske Bank hire a customer satisfaction manager and engage in a very broad dialogue with their customers through a customer panel consisting of 10,000 participating customers. Another big change compared to previous years is that Danske Bank begins to address dilemmas that are prevalent to their stakeholders and as a result on its own business practices. These dilemmas are defined as the following:
“The commitment to responsible business practices also means dealing every day with issues that are not black and white. For example, taking a balanced position on conditions in our supply chain or the companies we invest in is often a complex matter. Different stakeholders have different interests as well as different views and expectations of us. We recognize the need to consider all facts and viewpoints in order to be able to make the best possible decisions to benefit our customers, employees and other stakeholders – as well as our business.” – Peter Straarup in Danske Bank’s CR report 2010 (Danske Bank, 2011, p. 5).
The two prevalent dilemmas addressed in the report fall under the categories of two themes, Socially responsible investments and Youth engagement. The dilemma surrounding socially responsible investments is whether and when to divest if a company does not comply with international standards (Danske Bank, 2011). Reasoning for keeping shares in a company is explained as being necessary to ensure that there are responsible investors left that can elicit change in the corrupt companies. The second dilemma takes up the accusations of marketing to children through the Financial Literacy programs. Danske Bank admits that they are aware that there is a risk of turning advisory services into marketing. Data from the article collection on the other hand shows that this is not the primary concern among the public at the time. Accusations of using Financial Literacy as a branding tool, emerge in 2008, but the frequency of negative articles surrounding Financial Literacy is very low as is demonstrated in figure 4. This would indicate that, in terms of public perception, the dilemmas addressed in this CSR report, are mainly proactive.
The most interesting thing in the 2010 report is the fact that Danske Bank actually live up to the promises made the year before (figure 11 and 12). This commitment clearly correlates with the dwindling public discourses towards the end of 2010. All discourses are on their way down except for CSR communication, which is trending upwards due to mentions surrounding volunteer debt advisors.
2011 report
Danske Bank shift focus from the effects of the crisis to how to deal with it from their perspective.
“We are committed to making every effort to stay robust through the economic downturn. In November 2011, we therefore announced a plan to reduce costs by DKK 2 billion. The plan includes reducing the staff count by 10% by the end of 2014.” – Peter Straarup, Danske Bank CEO (Danske Bank, 2012, p. 4). The main focus of the report is the Youth engagement and CSR communication themes explained in the dilemmas about branded material for children and supply chain management.
Danske Bank changes course from the previous year and now admits that the materials are branded from 15 and up, because “at 15, young people can be expected to make individual consumer choices”
(Danske Bank, 2012). This clearly demonstrates a shift towards using the Financial Literacy programs as tools for marketing. The second dilemma raised in the CSR report is divided into two, one about supplier screening and the other about supply chain environmental and social effects. The issue of carbon credit purchasing is also mentioned although none of these issues are raised in the media. 2011 was a good year for CSR communication as most mentions were positive, and revolve around the environmental initiatives undertaken by the company. There is a general lack of addressing the main stakeholder concerns, which are the Socially responsible investments and Public accountability themes, but both Socially responsible investments initiatives and promises are on the decline in the report. The Government intervention theme is on the rise in the report, where Danske Bank warns about the dangers of regulation and how this can inhibit growth.
2012 report
“It is also a challenging time for the bank. We have to navigate in a financially unstable world.
Politicians are making more requirements about the way we run our business – and rightly so.
Investors are demanding better returns, and our integrity is being questioned.” Eivind Kolding, Danske Bank CEO (Danske Bank, 2013, p. 4).
The 2012 report presents the new CEO of Danske Bank Eivind Kolding and the discourse revolves around the new normal of banking and how Danske Bank as a financial institution is supposed to deal with it. Claims are made that the CSR report is meant as a tool to regain trust, and by extension to create long-term value for all stakeholders. The most prevalent themes in the report are Government intervention, Youth engagement, CSR communication and Accessibility. Especially the dilemma about balancing economic growth and having financial stability is interesting and addressed as such:
“Acting as both a vehicle for growth and a gatekeeper of financial stability, banks find themselves in a
difficult balancing act. There is no doubt that a healthy banking industry is a prerequisite for economic recovery in Europe. New regulations, however, have made it increasingly difficult for banks to grant credit, and too much regulation over too short a period of time may impede economic growth.” (Danske Bank, 2013, p. 19)
The Accessibility theme is addressed through the dilemma of branch closures as a result of increasing digitalization. It is time to transition into the digital society, and to stay agile and competitive, the bank claims, elaborating further that branch closures are necessary. The number of branches goes down from 842 in 2007 to 491 in 2012, a 58% decrease. Justification is made based on the fact that it is not only Danske Bank that is closing the branches but all banks. 50% of clients over 60 prefer tellers but this is not where the world is heading and the bank makes claims of focusing on transitioning these customers to the digital society. At the same time, there is no increase in initiatives or promises of initiatives in this period within the accessibility theme. This demonstrates a lack of actual commitment to improving the predicament of this customer group.
In media, all discourses are on the rise, especially Corporate governance, Public perception and trust, and Public accountability. Multiple accusations of being too focused on shareholder gains, high remuneration for executives and other unethical banking practices in the Corporate governance theme were not at all, or very briefly addressed in the report. Danske Bank did however address the issue of Government regulation and the importance of making more money due to higher capital requirements.
All the while, the Public perception and trust theme has the highest number of critical mentions in the media from the entire period of evaluation. For the majority of 2012, virtually no efforts are made on the bank’s part to respond to the criticism and legitimacy threat from the public; that is up until the end of 2012 where the new campaign, “New Standards” is launched. The bank addressed the dilemma of public perception of bank advisors and their objectivity and claims were made that the bank’s “first priority is always to deliver the best and most professional counseling to our customers. To ensure this, we make sure to inform our customers of any risks, in a clear and direct manner, before they make decisions.” (Danske Bank, 2013, p. 25). Although the seller-advisor conundrum is very problematic the public seems equally concerned about the lack of education and differing perceptions of risk between the advisors and the customers.
2013 report
In 2013, the new CEO is presented, Thomas Borgen. The focus of the content in the CR report shifts to the issue of reestablishing trust in the banking industry.
“Banking, more than any other industry, is about trust. You cannot run a profitable bank if you do not behave in a responsible manner that inspires confidence among your stakeholders. It is therefore
necessary for us to conduct our business with integrity and assume responsibility for our actions and their effects on customers, employees, shareholders and society.” – Thomas Borgen, Danske Bank CEO (Danske Bank, 2014, p. 4).
This quote represents the attitudinal shift that has happened at Danske Bank. The CEO is finally holding the industry accountable and is using this new attitude to present ambitions of regaining trust.
The themes in the initiatives focus on Public accountability, Socially responsible investments and Youth engagement. Public accountability is addressed through employee training, with specific initiatives to teach advisors how to create growth for customers in a low-growth economy. The rhetoric on the other hand focuses on customers with Customer favoritism, Public perception and trust, and Government intervention as the main themes emerging from the content. The CEO explains that Danske Bank’s new ambition “is to strengthen our market position by setting new standards in advisory services, easy banking and transparency. We need to give constant attention to our customers, to simplify our operations, and to become much more efficient.” – Thomas Borgen, Danske Bank CEO (Danske Bank, 2014, p. 4). The sentiment towards regulation changes as well, regulation is welcomed and Danske Bank will work to better their relation with the government. A specific initiative that deals with Customer favoritism, which is one of the major themes in 2013, allows for three monthly cash withdrawals at no charge. This initiative could explain the rapid decline in mentions in the public. The dilemma of trading in foodstuffs is also addressed and the Socially responsible investments theme is on the rise with six new initiatives devised to deal with the issues.
Danske Bank promise not to devise new products for trading in foodstuffs and they are taking responsibility by making sure beforehand that it does not affect basic human rights.
"Ved at spekulere i stigende fødevarepriser er Danmarks største banker sandsynligvis med til at presse prisen på hvede og majs i vejret til skade for verdens fattigste, der er dybt afhængige af stabile og lave priser på basale fødevarer." (Fastrup, 2011).
“By speculating on rising food prices the biggest banks in Denmark are probably helping to push the price of wheat and corn up, to the detriment of the poorest, who are heavily dependent on stable and low prices of staple foods.” (Fastrup, 2011).
It seems to indicate that Danske Bank is responding to the actual issues that are taken up by the media.
This would indicate that there is evidence of actual public engagement as a tool to address the issues of both the bank and the public.
2014 report
Danske Bank intensifies the customer focus rhetoric and pledges even more focus on all customers, institutional and business as well, with new products and services (Danske Bank, 2015). Especially MobilePay, which falls under the theme of Accessibility, is very positively received in the public. All CSR initiatives are on the rise, especially Accessibility, which is the main theme of the year. Public
accountability measures are also on the rise, with continuing focus on training employees. The transparency theme is addressed through transparency in tax affairs and further development of the whistleblower system. Interestingly, when compared to the data from the articles, all themes are on a decline, with the biggest themes still being Public perception and trust, Public accountability and Youth engagement. It is worth mentioning that 2014 is the first year after the crisis that positive and neutral mentions outweigh the critical when looking at sentiment in all discourses (see figure 6). Also, 2014 is the year where all promises plummet to record lows, all but those initiatives that fall under the Socially responsible investments theme. The only indication towards the reasoning behind the fall in promises might be the mention of re-strategizing of CSR activates, which is due next year. It makes sense not to promise too much, if there is a lack of general consensus as to where the company is heading.
2015 report
A major change has happened in the 2015 report, the rhetoric seems to have shifted entirely to fulfilling customer expectations, rebuilding trust and acceptance of the fact that more work needs to be done in order to fully change the course of the Public perception and trust theme.
“Driven by powerful forces such as digitalization and shifting customer expectations, the financial sector is undergoing radical changes. We want to be at the forefront of this transformation. We want to constantly challenge ourselves and our competitors to improve our products and services and to provide the best possible experience for customers. We can do that only if we are trusted, and we are on a journey to rebuild the trust that was lost during the financial crisis and the following years. We have taken firm steps in the right direction, but there is more work to be done.” – Thomas Borgen, Danske Bank CEO (Danske Bank, 2016, p. 5).
A new CSR strategy has been devised in order to take Danske Bank’s corporate responsibility aspirations to actions further. The focus of the new strategy falls under the themes Accessibility and Public perception and trust. The quote below also indicates that specific measures are taken to involve the public in the process of reintegration and rebuilding of trust.
“As part of the process of updating the Corporate Responsibility Strategy, we consulted a number of stakeholders, including customers. We used surveys, interviews and workshops, asking customers and employees what they expect from Danske Bank in terms of corporate responsibility. We also analyzed market trends, regulatory requirements, and business needs and opportunities.” (Danske Bank, 2016, p. 11)
In order to prove their new customer focus, the CEO Thomas Borgen and the Head of Personal Banking Denmark Thomas Mitchell, went out on a road trip across Denmark to address stakeholder concerns through dialogue with 1,700 customers. In the same period, all critical discourses were on a decline, and a healthy rise in positives is seen for the first time in a long time. The Public perception and trust discourse is still mostly critical but the intensity is dwindling, showing that the public is