The environmental sustainability and the performance of Barclays bank

 Critically analyse the sustainability and the performance of Barclays bank, with a focus on environmental sustainability, and the effectiveness of environmental management approaches and tools.

What are the opportunities and threats that the sustainable development agenda is posing to the company?

What are the opportunities presented by the company’s development agenda?

Appraising the company’s management of environmental opportunities and threats.

Critically evaluate the Company’s overall sustainability business practice

Introduction

With presence in more than fifty countries and providing financial and other integrated services of similar concerns, Barclays bank has employed more than 135,000 people while offering its services to millions across the globe as well. The following paper looks at Barclays bank with a central view of giving a critical analysis of its sustainability performance in terms of its commitment towards a sustainable environment.  In essence, this paper looks at the environment management approaches that the Bank has employed in the endeavor to manage its impacts as well as those of its clients on the environment. Equally, just as its financial departments try to analyze their incomes against their expenses so is there a parallel long term plan to ensure that this progress is matched by similar advancement in its environmental management policy.

Ideally, today banks play a very significant role in the economies of all countries as an institution that bridges the gap between the capital surplus and the capital deficient people. This has an imperative role in driving the economy through accelerating investment through channeling savings to the most appropriate areas of the economy. Therefore as banks strive to generate this interest income on their products and services, across major platforms such as corporate, online, electronic, agency, commercial and even investment banking, there lies great concern in their responsibility towards ensuring a sustainable environment.

According to Barclays bank, Group Operating Committee and the policy owner who is the Group Head of Environmental Sustainability all its branches are required to meet threshold guidelines on managing environmental impacts through integrated environmental aspects that are incorporated into the business policy and decisions. These guidelines are therefore an essential part of their supply chain.

It is therefore under the above background that this paper assesses the environmental sustainability and the effectiveness of environmental management approaches and tools that Barclays bank has taken into concern as well as offering a critical analysis of how and by what extent has it been able to deliver on this responsibility.

PART 2: The opportunities and threats that the sustainable development agenda is posing to the company.

 The following part identifies the opportunities as well as the threats that Barclays Bank faces in its operations. It specifically highlights the services that are geared towards environmental sustainability, the threats that come along as well as products and policies that have been developed to respond to these concerns.

First, we identify the sustainable development agenda that the company has embarked onto. This agenda can be summarized into the following points;

A policy towards achieving carbon neutrality.

The company has identified policies to fight global warming as embedded in its development agenda since the year 2007, which is aimed at reducing carbon emissions through increasing energy efficiency across the UK and the entire Europe. The company has committed itself to supporting the purchase of clean energy as opposed to other fuels that act as environmental pollutants. It has offered products and services that have incentives for the purchase of low carbon emitting fuels.

Absa Capital building in South Africa based on SO 14001 standards.

One of the most notable undertakings in this regard is the building of Absa capital building in South Africa. This building marked the serious beginning of a new standard for sustainable building. The building has indeed incorporated sustainable environment features such as solar heating, rain water harvesting, and the use of recycled materials, natural air conditioning and other energy saving approaches as well. It has been estimated that the business complex at Sandton Court in Johannesburg is 34.2% more energy efficient as compared to an average business building. More so Wilmington complex among many buildings have green roofs for environmental sustainability.

Launch of the Barclaycard

In its launch of the carbon footprint, Barclays bank launched a credit card that provides good incentives to its customers who shop for greener products and at the same time using half of the proceeds from the Barclaycard sector to contribute towards initiatives geared at a sustainable environment. In the first year itself the company donated a million USD towards environmental projects coupled with its decision to avail the car to all its corporate customers.

Integrated services to SMES and investors

Barclays Bank has launched services where investors and as well as small and, medium enterprises who are their customers can access services on environmental assessment of their investments and as well as other tools to assist them develop environmentally conscious investments.

Opportunities presented by the company’s development agenda;

 Decreased resource use

As noted by the above initiatives such as the use of green energy fuels as well as the construction of more efficient buildings, costs on fuel, and other resources such as water are reduced. Additionally, the externalities that arise from environmental degradation such as the sustained potential of land to maintain high productivity as a result of green investments are reduced thereby generating huge savings as a result.

 Improved human health

The company benefits from a healthier population, who can work, generate more lending power and investment opportunities as well.

Increased acceptance of the projects that are undertaken

The environmentally conscious projects such as buildings and other investments gain general public acceptance as they do not interfere with the interests of external parties.

 Violations of the law is avoided

Presently much governmental legislation provides regulations that aim at creating a sustainable future. Therefore, when Barclays bank and all its branches worldwide heed to this concern, legal suits are avoided.

Reduction of wasted and the efficient use of resources through recycling

Increased public awareness of the environmental concerns and need for a sustainably among the company’s employees and the society as well.

Increased business profits that arise from operating in a more efficient environment, societal acceptability, and the goodwill of stakeholders due to more efficient business operations.

 Threats posed by the sustainable development Agenda to the company

Internalizing such concerns of ensuring a sustainable environment poses an additional risk to the company. Its involvement, both in terms of ideology and financial support is neither a guarantee to increased streams of income nor public goodwill as well. Providing incentives through the Barclaycard only serves to reduce the revenues generated by the company’s operations. Therefore, ideally, such financing can better be viewed as a social responsibility but not an income generating initiative since the company faces the risk of reducing its profitability as a result.

On the same regard, only operating through the use of clean fuels and creating prohibitive policies towards environmentally unfriendly investments means losing revenue from their lending reserves while at the same time operating on an uneconomic scale as they avoid more economic fossil fuels in the global market.

PART: 2 appraising the company’s management of environmental opportunities and threats.

Banks have been previously seen as an environmentally clean sector. However, today, it can be observed that their enormous use of paper, water and energy coupled with their external associates such as the investments that it funds pose a significant environmental impact. Such indirect interrelationships therefore make it hard to estimate their overall impact on the environment as a result. That’s why a few years in the past, banks have been reluctant to internalize some of these externalities posed to their environment.

In this regard therefore, we appraise Barclays bank’s management of environmental opportunities and threats as we seek to identify how different theoretical approaches can be of use towards achieving a sustainable environment.

Environmental management practices and performance as employed by Barclays Bank.

Development of Group wide Environmental Management Systems (EMS)

Barclays bank has set up an initiative to fight global warming through reducing carbon emissions in Europe. According to recorded statistics, the company was able to reduce 173000 tonnes of carbon dioxide emissions by the year 2007. This agenda that has apparently been certified under ISO 14001 seeks to ensure that the company’s construction needs are aligned to energy saving measures and even more sustainable infrastructure. To meet such environmental standards the company has even embarked on using sensor lighting in washrooms, provided sustainable landscaping that conserves surface water runoff, created water efficient flush toilets as well as incorporated other energy efficient fittings into their buildings.

Through use of the European bank Cashback Scheme, the company was able to attract massive environmentally efficient infrastructure development projects from external businesses.

Such practices therefore have not only lead to huge savings but as well created more awareness of taking environmental concerns in creating projects and operating institutions as well. Capital allowances have been introduced for environmentally friendly capital goods such as agricultural machinery, while Small and Medium Enterprises have benefited from professional advice on taking environmental concerns in their investments.

It is therefore evident that with the above impressive performance, it has absolutely taken an extra effort for this company to achieve such milestones. This therefore means that in as much as the company has maximized on its opportunities, it has as well been able to minimize its threats.

How environmental management approaches and tools are used to maximize opportunities

Decreased resource use

Through environmental management systems geared at reducing wastes and economizing on fuel usage, such costs have been considerably brought down. As a result massive savings have contributed to a reduction in operational costs which account for a large percentage of the company’s expenses.

Improved human health

On the basis of corporate social responsibility, guaranteeing a safe environment for the people, making them healthier offers the company better stakeholder goodwill and increased productivity.

Increased acceptance of the projects that are undertaken

Proper stakeholder management has ensured that the general society, especially across Europe has appreciated the company’s initiative towards environmental conservation. Their direct and indirect involvement through Barclay card has ensured that they are supportive of the bank and so are its services and products as well. During the Prince of Wales’s May Day Business Summit on Climate Change organized by Barclay Bank, more than 1200 delegates attended to tackle global warming.

Possibility of increased business profits arising from operating in a more efficient

environment, societal acceptability and the goodwill of stakeholders due to more efficient business operations.

This can be observed under the following milestones that have been a result of, Life Cycle Analysis, (LCA), legislation compliance and monitoring;

·         Automation of customer cheques that has saved more than 1000000 pieces of paper annually.

·         The launch of a Paper Report Switch-Off Campaign which was a five weeks environmental campaign to end the printing of unnecessary paper reports.

·         The introduction and continual editing of environmental champions handbook.

·         Migration from paper to intranet saving over 20000 printed copies weekly.

How environmental management approaches and tools are used to minimize threats

If only operating through the use of clean fuels and creating prohibitive policies towards environmentally unfriendly investments means losing revenue from their lending reserves while at the same time operating on an uneconomic scale as they avoid more affordable fossil fuels in the global market, the company has minimized this threat as follows;

Barclays Capital has grown to be a leader in the EU emissions trading market where carbon trading generates revenue to fund its capital intensive initiatives aimed at environmental efficiency.

Supporting massive infrastructural growth for renewable energy such as wind and solar in Spain and across Africa is meant to mitigate these costs involved and generate extra income for the company.

Part 3: A critical evaluation of the Company’s overall sustainability business practice.

As seen earlier, both the internal and the external driving forces around Barclays bank have been instrumental in shaping its goals as well as its overall initiative towards sustainable environment. Essentially, such initiatives involve risks and so are the rewards as well. Therefore this presents an opportunity to take risk as well as minimize this risk where possible.  In this endeavor therefore, Barclays bank has taken into consideration the pollution aspects of its customers, itself and the outside world as well. It is in this regard therefore that this paper evaluates critically on whether this company has been effective in contributing towards a sustainable business practice or otherwise less has been done to bring this initiative to reasonable levels.

In assessing this kind of offensive banking , in which the banking institution has developed environmental investment funds and internalized its externalities to the environment, it is worth noting that such an undertaking acts in response to a strong need and therefore there is need to evaluate how sustainable has been this action.

Contribution towards sustainable business practice;

Generation of taxes and carbon trading revenues to enhance compliance and awareness

The funds generated through carbon trading have offered a future to the efforts of ensuring environmental sustainability is adhered to in the civil and corporate world as well. This is therefore presenting continuity in the efforts of raising awareness as well as enhancing compliance.

Increased capacity for growth from increased earth’s capacity to support various sectors

With the environment being kept free of pollutants and excessive demands that natural resources such as water energy cannot provide, enough capacity is created to help other sectors such as agriculture grow. This simply underlies the aspect of economic use of resources and ideally having them channeled where they are needed most.

Contribution towards unsustainable business growth

A deterrent to certain investment opportunities

The introduction of incentives to only businesses that go green and ones that are able to adopt energy efficient approaches, has undoubtedly been a deterrent to given investment opportunities such as the petroleum products industry. Additionally, energy intensive and high volume water consuming manufacturing industries have become less attractive to invest in a result. This is due to the increased costs of internalizing the acts of environmental degradation and as well setting up expensive infrastructure and technology that is environmentally sustainable. As a result, this initiative poses a threat to the future development of these industries thereby impacting negatively on people’s needs.

Loss of welfare as a result hiked prices from polluting industries

As industries pay carbon permits and invest on expensive technologies geared at ensuring that there is environmental sustainability, their production costs rise as well. Eventually, the average consumer has to pay for these increased costs through a higher price for these products. Therefore, with the high prices and a lesser demand, consumer welfare is negatively impacted on.

Improving on the sustainability of Barclays Bank’s commitment to environmental efficiency

Therefore with the above environmental sustainability approach geared at ensuring a more economical, productive and a sustainable business environment today and in the future,  Barclays bank still has more to do if it has to make a more significant impact on the people’s lives and the sustainability of  businesses’ environment. Taking this initiative to every individual therefore presents an all inclusive approach to ensure that such initiatives are embraced everywhere be it at school, home, work and even in hospitals.

Conclusion

In conclusion therefore we realize that though it is the role of different actors in ensuring that businesses have a sustainable efficiency in their environment, Barclays bank has made a significant contribution in this endeavor. Their ability to incorporate environmental awareness in their products and services and decision making too has generated more concern from people in all sectors towards this initiative. It evident from the above research that this endeavor has met success even though there is still more that is to be done if the full impact of a sustainable and efficient environment is to be felt. Otherwise despite facing risks and the ever dynamic challenges, Barclays bank has managed to spearhead this initiative to commendable levels.

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