Development Crossing

Corporate Social Responsibility (CSR) and Sustainability

With a strong focus on corporate social responsibility (CSR), Lars Pehrson, CEO of Merkur Cooperative Bank in Denmark, and a member of Development Crossing, was kind enough to share a few quick thoughts with us. A big thank you to Lars for taking the time out of his busy schedule...

1. Could you briefly explain your role and responsibilities within the organization?


2. What do you feel has driven the increased C-level focus on CSR initiatives in today’s business world?
I think it is (for some companies) a growing awareness of co-responsibility. For other companies it is fear to be left behind and get bad reputation.

3. What are the top three challenges facing you as a CSR executive over the next 12-18 months? Why?
To make our profile as social bank known to a wider public, because the financial crisis is a unique opportunity to show the strength of our approach to banking.

4. What role, if any, do you see corporations playing in poverty alleviation in the developing world? Any specific examples at your company?
Doing business with the in a fair way. Merkur Cooperative Bank is now launching a separate entity, Merkur Developing Loans Ltd, aiming to give loans at fair conditions to SME’s and cooperatives in developing countries.

5. What recent CSR initiative or project are you most proud of, and why? How have you measured its success?
We do not do specific CSR initiatives or mention initiatives as CSR. The societal approach in integrated in our business model right from the founding 26 years ago (when nobody spoke abut CSR)

6. Given the current economic climate, how do you see the role of CSR in corporate strategy adapting, if at all?
Only companies with a responsible societal approach will survive in the future!

7. Any additional thoughts?
See and find more on social finance and socially and environmentally responsible banking.

Views: 435

Reply to This

Replies to This Discussion

hi, thank you for posting this interview, this is a very interesting topic, and social banking is a great business model. I would have welcomed fuller responses from Mr Pehrson as i am sure he as more valuable insghts which we could all benefit from. The areas i would have liked to hear more about are :
** Processes in place, beyond certification by the list of bodies detailed on the Merkur website, to ensure that those receiving sustainable credit are actually upholding their commitments - I wonder if Merkur audits these organisations
**Impact of the current financial crisis on Merkur. eg reduction in rate of new accounts, defaults on loan repayments etc and how this compares with regular banking models
** Position of women in Merkur - % of women on the Board and in the Executive management team

One final point - I dont think the fact that Merkur is a social bank exempts Merkur from adopting a CSR approach. Like NGO's, whose core operation is inherently social or enviromnental, there is still a range of CSR aspects such as responsible workplace, governance , ethics, ethical supply chain issues, community involvement and reporting/transparency which are part of the WAY a social business does business and impacts all stakeholders which are all very relevant.

thank you
warm regards, elaine,
I agree. A fuller response from Mr Pehrson would have been welcome, including answers to the questions you have raised. Personally for me (going by my understanding of the banking system in India, including regional rural banks and cooperative banks), I find CSR and banking rather opposed to each other. The banking system, at least in the developing world, is so designed as to keep out the poor, whether in terms of physical accesability or in terms of literacy (filling up endless forms, etc), in spite of the fact that the poor are more inclined to repaying loans as compared to the rich.

I found it quite funny that CitiBank had recently sponsored a topic on Changemakers about "Banking for the Poor!"

I found the interview of Mr. Lars very interesting. However I would like to know what are the mechanisms put in place to practically controle or appraise the sociatal approach of the SME's which obtain lonas at fair conditions from Mercur Bank? May I have the complete address of the Mercur Developing Loans? What are the criteria to be eligible? Is there any possibility of getting loan from this Bank for NGOs practicing in agricultural development?

Dr. Kamara Nangnigui David
Especially seeing what current financial practices have done to the world (will we not learn?), this is a great shining light as an example. And even more impressive is this is not a knee jerk reaction, or CSR 'lip service'....they have been doing it for so long. Great stuff...need more of it!
Lars sent along some additional thoughts that touch on several of your follow up questions:

"Dear friends,

Thank you for your comments. In fact I was not aware that my answers were for an interview on the site, I thought it was a questionnaire. I hope this explains the very short answers. I am pleased to deepen a bit:

- We depend on good client relations, and as a fully licensed bank, we stay in daily contact with our clients. We visit them in their own premises before we enter into a relationship. We have to rely on that the clients tell us the truth about their businesses and projects, and we have during the 26 years of existence only a handful of examples, that this approach did not work. We do not have resources to do a full environmental or social audit. In some cases we can rely on certifications, for instance as organic farmers, fair trade companies etc., where such an audit is done by external parties.

- The financial crisis has given us, and other social banks, a very good opportunity to position ourselves as a real alternative to the high street banks. Our depositor influx is all time high for the moment. Since our loans are all in the "real economy" we have not been hit at all from the first wave of losses. But if and when the crisis creeps deeper into the economy and if unemployment will start to rise more severely than we have seen till yet (in Denmark), we will certainly also be exposed higher risks (as any bank). We try to prepare ourselves for such scenarios. However, I am convinced that many of our clients activities and businesses have a character that makes them more sustainable, also from a financial point of view - they will have a tendency to keep their turnover, since their costumers stay loyal and do not want to miss the good organic, basic and non-expensive food (as an example).

- Our staff is more or less equally composed of men and women. On the management and middle-management level the female share is 25%.

- We report on the banks own environmental and social issues as well, see our annual report. The 2008 annual report will soon be ready, also in English.

- Merkur development Loans is a new initiative and not yet operational. We are in the share launch period (until June 12th) and have to get at least 1 m Euro. You are welcome as a shareholder if you want to be sure, we get started on this operation!"
thank you for your detailed responses.Very interesting insights. warm regards, elaine
I like how he sees the financial crisis as an opportunity for them and other social banking enterprises. Perhaps mainstream banks should look at it that way as well? Or at least position themselves to take advantage and make the necessary changes to their processes once the dust has settled.
Just a heads up, we'll be relaunching the interview series in the coming weeks!


© 2020   Created by Development Crossing.   Powered by

Badges  |  Report an Issue  |  Terms of Service