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Nordea | Growing the Social Role of Financial Services

It’s always a good idea, although sometimes difficult, to have something interesting to say when you launch your latest sustainability report. Our client Nordea Bank didn’t settle for “interesting”—they raised the bar to “inspiring” levels by launching an ambitious sustainability strategy with their 2015 sustainability report.

Nordea is the Nordic region’s largest bank with over 10 million customers. They hold leading positions in corporate, institutional, private, and retail banking, and are also the leading provider of life and pensions products in the Nordic countries—in short, they play a significant role in the business and private lives of Nordic citizens. Their new strategy has three main focus areas: promoting sustainable economic progress, building skills in personal finance and ensuring a diverse workforce, all supported by a strong foundation of compliance, risk management and environmental protection.

As Kristiina Oja, Nordea’s acting head of sustainability, said at the report launch:

“For many years we have worked with taking responsibility for social and environmental issues in our business but we want to do more. As the biggest financial institution in the Nordics we have an important role to play as enablers of economic success in society. We have concluded that our sustainability programme should address the societal challenges where we have the relevant skills and expertise.”

This announcement marks a step change in Nordea’s approach. In this statement, Nordea is acknowledging that…

  1. Its actions should align with the level of responsibility Nordea has, given its size and influence in Nordic society.
  2. Although the company has previously addressed social and environmental issues, that strategy was no longer sufficient.
  3. By analyzing societal challenges and matching them with their people’s skills and competencies, Nordea could make a bigger difference.

Nordea has set its sights higher and is taking a wider view of its responsibilities to be a good corporate citizen. Nordea is now setting goals that will resonate with people outside the company in the wider society. In short, it is linking its sustainability ambitions with its brand.

Building the Brand

At Junxion we define brand as much more than a visual identity. Your brand is the public face of your strategy; it defines the narrative you use to engage stakeholders inside and outside the business on the strategic approach your business has decided to take.

The ingredients of an effective brand are linked in our AVID Brand Architecture™ model:

  • Authenticity, or how well your brand demonstrates its stated values through time.
  • Value, including perceived as well as actual value—what people know about what you stand for and how much they value that, as well as the promise of receiving something as part of a financial exchange.
  • Inspiration: Great brands inspire people to action. Baking inspiration into your brand is easiest when you connect it to a purpose beyond profit, something bigger that rallies support and loyalty—an inspiring vision that attracts allies, staff and customers.
  • Distinctiveness: Does your brand deliver a unique and relevant opportunity for customers?

As a leading brand in their sector, Nordea is aligning their sustainability strategy, their material commitments and their brand toward an inspiring ‘grand purpose.’

Moving Up the CSR Ladder

With this new strategy, Nordea has taken a step up the “CSR ladder of engagement.” As companies embrace CSR with greater and greater depth, they move along a continuum—or up a ladder of engagement—from “pre-CSR” through to “Transformational CSR.”

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With its previous strategy, Nordea was firmly at “Proactive CSR” (stage 3 of 5). At this third stage, companies are largely focused on CSR through a risk-management lens: avoiding reputation damage or the costs of non-compliance. There will often be some operational programmes addressing key impacts for businesses at this level—Nordea had a robust environmental programme in place that was delivering results, for example, but the overall effort is not necessarily oriented to clear social impact goals at this stage. Where goals do exist, they are likely to be internally focused, lacking resonance with people outside the business.

Nordea has made specific commitments to gender equality and they are working to set targets and support implementation with each department.

Moving up the ladder to “Integrated CSR” (level 4 of 5), strategies to address social and environmental risks are fully integrated across the organisation. While CSR or sustainability was regularly considered at stage 3, now it is more of a strategic requirement. For example, Nordea has made specific commitments to gender equality and they are working with each part of the company to support implementation with managers, and ultimately to see actions towards goals in individual workplans.

Nordea’s ambitions for gender equality, and other issues, were not chosen at random. Nordea undertook a rigorous process to determine its ‘material issues’—the issues that are most significant to stakeholders’ decisions about the company, and to the long-term health of the business. Nordea looked at the big picture ‘megatrends’ such as climate change and an ageing population, gathered the perspectives of a range of stakeholders including customers, NGOs and analysts, and consulted with all the main divisions in the business. In short, a robust process informed their bold step up the “CSR ladder.”

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The ‘Space Between’

Companies need both a strong brand and a good materiality process to be true leaders in a more inclusive form of capitalism that respects people and planet and is about more than the pursuit of profit.

What Nordea’s approach to brand and materiality had in common is that they were not “push” projects where they decided on a message and pushed it out to their customers. Their actions were based on an acute awareness of, and respect for, the state of the world around them—acknowledging and understanding challenges and opportunities around them at a social level, and not just a business level. Managing their vision for change, business strategy and accountability together, and coherently, puts Nordea, and other CSR leaders, in a “space between” the traditional approaches to business and nonprofit management.

Getting it right brings rich rewards and we are delighted to be working with Nordea as they continue on their journey.

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