CSR in the Financial Industry: A Focus on Supply Chain and Management

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Table of contents 
 
Introduction ................................................................................................................................. 5 
1. CORPORATE SOCIAL RESPONSIBILITY  AN OVERVIEW .................................. 7 
1.1) Brief History ............................................................................................................... 7 
1.1.1. Introduction ............................................................................................................. 7 
1.1.2. The Beginning ......................................................................................................... 7 
1.1.3. Fordism, scandals and the beginning of a new-era ................................................. 8 
1.2) The Academic debate ................................................................................................ 9 
1.2.1. Friedman and the Shareholder Theory .................................................................... 9 
1.2.2. Davis, Frederick and McGuire against Milton Friedman ...................................... 12 
1.2.3. Carroll, the four dimensions of CSR and the Stakeholder’s theory ...................... 13 
1.2.4. Porter, Kramer and the Social Value Chain .......................................................... 19 
1.2.5. The Triple Bottom Line......................................................................................... 21 
1.3) Institutional Development ....................................................................................... 22 
1.3.1. Environmental, Social and Governance score ....................................................... 25 
2. CSR ADVANTAGES AND TOOLS............................................................................... 29 
2.1) Introduction ............................................................................................................. 29 
2.2) CSR Advantages ...................................................................................................... 29 
2.2.1. Greater employees motivation .............................................................................. 30 
2.2.2. Less employees turnover (attract and retain qualified professionals) ................... 31 
2.2.3. Stronger relationships with the unions .................................................................. 32 
2.2.4. Improved relationships with public authorities ..................................................... 33 
2.2.5. Improved reputation .............................................................................................. 33 
2.2.6. Reduced access credit’s cost ................................................................................. 34 
2.2.7. Improved financial performance ........................................................................... 36 
2.2.8. Cost and Risk Reduction ....................................................................................... 38 
2.2.9. Brand differentiation and reduced risk of boycott ................................................. 40 
2.2.10. Customers loyalty ............................................................................................. 40 
2.3) CSR STANDARDS AND ORGANISATIONS ..................................................... 41 
2.3.1. An overview .......................................................................................................... 41 
2.3.2. Global Reporting Initiative, GRI ........................................................................... 41 
2.3.3. ISEA: The Institute of Social and Ethical Accountability..................................... 42 
2.3.4. SAI (Social Accountability International) ............................................................. 42 
2.3.5. ISO - (International Organization for Standardization) ........................................ 43 
2.3.6. OECD Guidelines for Multinational Companies .................................................. 44 
2.3.7. EMAS – Eco-Management and Audit Scheme ..................................................... 44 
2.4) Conclusions .............................................................................................................. 44 
3. CSR AND FIRM VALUE ................................................................................................ 47 
3.1) Introduction ............................................................................................................. 47 
3.2) Firm Value ............................................................................................................... 47 
3.2.1. Does CSR affects Firm Value? ............................................................................. 50 
3.2.2. CSR Drivers for Firm Value ................................................................................. 52 
3.2.3. CSR Impact and the Tobin’s Q Approach............................................................. 54 
3.3) CSR and Investments .............................................................................................. 56 
3.4) The Concept of Corporate Financial Performance .............................................. 58

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3.5) Corporate Social Performance ............................................................................... 61 
3.6) Firm value in the Financial Services ...................................................................... 63 
3.6.1. CSR and Financial Services .................................................................................. 64 
3.7) Shared Value – Another concept of Value ............................................................ 67 
3.8) Conclusions .............................................................................................................. 69 
4. SUSTAINABLE SUPPLY CHAIN MANAGEMENT AS A DRIVER FOR CSR ..... 70 
4.1) Supply Chain Management – An overview ........................................................... 70 
4.1.1. Supply Chain and Supply Chain Management...................................................... 70 
Theoretical Background ..................................................................................................... 70 
4.1.2. Logistics and Supply Chain................................................................................... 74 
4.1.3. Green and Sustainable, different but complementary. .......................................... 76 
4.2) Sustainable Supply Chain Management ................................................................ 78 
4.2.1. Definition .............................................................................................................. 78 
4.2.2. From the dyadic approach to the business network .............................................. 79 
4.2.3. What does it mean to build a sustainable supply chain? ....................................... 82 
4.2.4. Sustainable Supply Chain – A contemporary challenge ....................................... 85 
4.2.5. Sustainable Supply Chain and Value Creation...................................................... 88 
4.3) Supply Chain in the service industry ..................................................................... 91 
4.3.1. An overview .......................................................................................................... 91 
4.3.2. The concept of Sustainable Procurement: Right approach for Financial Industry 94 
4.4) Conclusions .............................................................................................................. 98 
5. A Survey on Sustainable Supply Chain Management in the Financial Industry ..... 101 
5.1) Introduction ........................................................................................................... 101 
5.2) Review of previous surveys ................................................................................... 102 
5.3) Survey methodology and sample .......................................................................... 109 
5.3.1. Company Details ................................................................................................. 110 
5.3.2. CSR Approach .................................................................................................... 112 
5.3.3. Supply Chain and Procurement ........................................................................... 120 
5.3.4. Outcome and metrics ........................................................................................... 126 
5.4) Quantitative approach .......................................................................................... 128 
6. Conclusions ..................................................................................................................... 135 
7. References ....................................................................................................................... 138 
8. Annex – Survey ............................................................................................................... 147