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European Savings Banks Group "CSR Lab"on Business involvement to enhance social inclusion at local level European Savings Banks Group “CSR Lab” on Business involvement to enhance social inclusion at local level I. G ENERAL BACKGROUND 1. The European Alliance on CSR At the occasion of the adoption of the Communication on CSR in March 2006 1 , the European Commission launched the European Alliance on CSR. It invited enterprises to publicly express their support and commitment to CSR by joining the Alliance. More than 260 companies now formally support this initiative 2 . In the Communication, the European Commission also recommended that companies supporting the Alliance should set up “open coalitions for cooperation“ to “explore and develop joint operational projects, in partnership with relevant experts and stakeholders”. The objective should be to define concrete CSR solutions/projects, in a number of priority areas, such as innovation and entrepreneurship in sustainable technologies, products and services which address societal needs, CSR and SMEs, integration of social and environmental considerations in business operations, improving and developing skills for employability, diversity and equal opportunities, dialogue and engagement with all relevant stakeholders etc. These working groups are referred to as “laboratory meetings” (“labs”). 2. ESBG member banks’ commitment to CSR Savings banks embody a “stakeholder” model, seeking at the same time to be profitable, but also to bring value and return to the whole community of stakeholders which surround them - suppliers, customers, employees and the local community in which they operate. Community investment activities (improvement of living conditions, support to greater social cohesion, education projects etc) are therefore an integral part of savings banks’ identity throughout Europe and one of their distinctive features amongst retail banking institutions. It is nowadays only one of the pillars of their broader, balanced and comprehensive CSR approach, which increasingly include all the various CSR components –human resources, human rights, relations with suppliers and customers, corporate governance, environment, community and society- and cover a whole range of fields, such as financial literacy, proximity banking and access to finance, microcredit, transparency and corporate governance measures, workforce training and life-long learning, targeted actions to support SME clients business, CSR raising awareness activities, introduction of ethical criteria in financial products, etc. As genuine and long-standing socially responsible actors, European savings banks proved able to adjust and to innovate, to diversify their socially responsible initiatives to anticipate stakeholders’ needs and demands, in the evolving context and concerns of the society in which they operate 3 . 1 http://eur-lex.europa.eu/LexUriServ/site/en/com/2006/com2006_0136en01.pdf 2 http://www.csreurope.org/pages/en/supporters.html, or http://www.businesseurope.eu/content/default.asp?PageID=439 3 http://www.esbg.eu/uploadedFiles/News/2006-00688.pdf II. ESBG INVOLVEMENT WITH THE ALLIANCE 1. Public support to the Alliance On behalf of its member banks, the European Savings Banks Group (ESBG) expressed its public support to the Alliance at an early stage, reflecting their belief that initiatives led by the European Commission in partnership with market players will lead to further progress in CSR engagement and achievements 4 . As for its individual members, 15 Cajas de Ahorros in Spain, Lloyds TSB in the UK, Erste Bank in Austria, OTP Bank in Hungary, Banque et Caisse d’Epargne de l’Etat in Luxembourg, Montepio in Portugal, Groupe Caisse d’Epargne in France and a number of German Sparkassen officially became supporters. 2. Contribution to the High-Level meetings of the Alliance European savings banks were represented, at the highest level, at the 2007 and 2008 High- Level meetings of the CSR Alliance, convened jointly by European Commission Vice President Verheugen (Enterprise and Industry) and Commissioner Spidla (Employment, Social affairs and Equal opportunities). This was the opportunity to highlight some of the main CSR achievements of European savings banks and to renew their commitment to the EU CSR initiatives. It was specifically underlined at this occasion that ESBG and the European savings banks: - support the voluntary approach of CSR promoted by the European Commission and the creation of an EU enabling environment, rather than a binding framework. They are convinced that this approach will encourage EU companies, including savings banks, to integrate CSR principles in their strategy and implement CSR processes at their own pace and following their own priorities. Besides, this will avoid any costly and additional legal requirements imposed on companies, which could prevent development and innovation; - welcome the fact that the European Commission identifies companies as primary actors on CSR. But the CSR concept must mirror the diversity of business practices developed throughout the European Union, and put on an equal footing the achievements of multinational, listed companies and the contribution of all other business actors -SMEs, local companies, non-limited stock companies, publicly-owned companies, foundations, etc They are an integral part of and contribute to the dynamism, growth and competitiveness of the corporate European landscape. Diversity is also an asset as regards CSR and there is a need for a better EU recognition of the local, medium and small-scale dimension of CSR, as developed by savings banks. 4 For example of CSR initiatives developed by ESBG members: www.savings- banks.com/uploadedFiles/ESBG/CSR_Activities/study%20esbg%20november%202007screenview.pdf and specifically on the Environment: http://www.esbg.eu/uploadedFiles/Announcements/resolution%20screen%20view%20with%20UN%20logo%20. pdf and http://www.esbg.eu/uploadedFiles/Events/proceedings(1).pdf 2 On this basis, ESBG and European savings banks are convinced that CSR can be a key driver for social and economic development of the local communities and European regions, leading to job creation and sustainable growth, thus contributing to strengthening the EU competitiveness. III. DEVELOPMENT OF AN ESBG-LED LAB 1. Scope and objectives of the Lab With the support of its members and interested stakeholders, ESBG has decided to bring an active contribution to the Alliance, through the facilitation of a laboratory meeting around the theme “BUSINESS’ INVOLVEMENT TO ENHANCE SOCIAL INCLUSION AT LOCAL LEVEL”. This topic will fall under the EU priority “fostering innovation and entrepreneurship in sustainable technologies, products and services which address societal needs”. As part of their support to local and regional communities, European savings banks have a long-standing experience of developing solutions to contribute to greater social cohesion, in partnership with local stakeholders. Their involvement is directed to long-term, comprehensive and innovative schemes, which focus on providing means to encourage people’s autonomy and initiative, rather than simply giving out financial aid. They target people in fragile situations or who are seeking to attain self-reliance and benefit from long- term programmes with a specific mentoring along the various steps. Most of the projects combine the purely social dimension with other initiatives -e.g. support to small business launch or job seeking, social integration through the preservation of natural and cultural heritage etc, always aiming at a balanced, more equitable and enterprising society. Since social and financial exclusion are so closely connected, banking support and access to basic banking services are important components of the programmes developed, as well as financial education. Microcredit is also increasingly included, either for the benefit of microentrepeneurs or for social purposes. Microcredit in Europe – Experiences from savings banks Microcredit has become a key topic on the European social and economic agenda. It is increasingly recognized by European actors –EU institutions, National Governments, the financial sector and civil society organizations-, as one of the solutions to improve access to finance for micro and small enterprises and to fight social exclusion. Indeed, microcredit in Europe plays a significant role in expanding access to financial services of micro and small enterprises, but it also has a strong social component allowing people at risk of social exclusion to engage in an economic activity. In this sense, microcredit contributes to reaching the goals of the Lisbon agenda, tackling the issues of business development, job creation and social cohesion through the expanded provision of access to finance. European savings banks are important players in their regions both in providing access to credit to micro and small-sized companies and in putting in place social financial schemes that specifically target individuals at risk of financial exclusion. On their role towards micro and small enterprises, savings banks have - for more than a century -provided easily accessible small-scale loans ranging, for example, from a very small loan for a start-up needing hardware to develop its business, up to a larger amount for a migrant entrepreneur wishing to set up a shop. Thanks to their proximity, savings banks are close partners of these businesses, providing not only a 3 full range of financial services (credit, savings, payments and insurance) but also dedicated business support services to accompany the enterprise in its development or possible expansion. In this context, ESBG, as the European voice of savings and retail banking, fully supports and encourages the increasing development of microcredit initiatives in Europe. In particular, ESBG stands ready to share its members’ best practices and explore ways to collaborate with other microcredit providers, in order to further increase the level of access to financial services, for all European citizens and entrepreneurs. ESBG publication on Microcredit provides an overview of the current practice of microcredit within the European savings banks sector. The case studies presented show these types of interventions and are grouped in four main models: the microcredit subsidiary model, the balance sheet-based model, the agency-based model, the off balance sheet-based model 5 . Projects are developed on a local level, based on the banks’ close relationship with stakeholders and beneficiaries and their thorough understanding of the local socio-economic context. The multiplicity of these focused actions creates decisive input for local economic and social dynamism. Through the Lab, European savings banks wish to share with interested parties, stakeholders and other businesses the key success factors and lessons they have learnt when getting involved in local social projects, seeking to empower socially and financially excluded people. They hope they could serve as guidelines for other European savings banks, intending to get involved in social schemes or as references for those considering extending their existing programmes. They could also inspire other businesses interested to join and enrich existing schemes or to launch new ones, e.g. temporary employment agencies, insurance companies, services companies (telephone, gas, water) etc, as well as stakeholders e.g. social proximity networks, start up networks, local authorities etc. 2. Process and deliverable of the Lab An analysis was made on the basis of national social inclusion schemes/experiences developed or supported by European savings banks, at national or local level 6 : - Parcours Confiance (« Fresh Start » programme), Groupe Caisse d’Epargne (France) . Mid 2006, Groupe Caisse d’Epargne launched a prevention of banking exclusion programme, Parcours Confiance. It temporarily supports individuals and professionals who face social or financial difficulties and cannot find solutions in the “conventional” banking system. It provides a two-year comprehensive support package, including tailored banking services that are essential to maintain social integration (account-keeping, means of payment) or to run microenterprises, and microcredit facilities. In addition, it offers personalised social support through the intervention of social workers and/or specialised voluntary organisations, and an educational dimension through workshop on budget management and banking products. 5 http://www.esbg.eu/uploadedFiles/Publications_and_Research_(ESBG_only)/brochure%20screen%20view.pdf 4 6 See Annex 1 for an overview of each the schemes analysed. More information from www.federation.caisse-epargne.fr/parcoursconfiance.htm - Die Zweite Sparkasse (“The Bank for the unbankable”), ERSTE Foundation (Austria). At the end of 2006, a new savings bank started to operate in Vienna with one objective: to provide bank accounts to those people who are no longer banked, because of economic and/or social difficulties such as unemployment, overindebtness, homelessness etc. ERSTE Foundation initiated and financed this project and works in close cooperation with counseling and charitable organisations, primarily Caritas and debt counseling services, to identify eligible people. The service provided is a basic account with a bank card, which does not offer overdraft facilities. It also includes a basic insurance coverage. It is offered for three years with the hope that after this period, clients can reintegrate the “conventional” banking system. More information from: http://www.erstestiftung.org/?projectID=7 - Support for employment of young people, BBK Gatze Lanbidean Foundation (Spain). The BBK Gatze Lanbidean Foundation programme aims at promoting the creation of jobs amongst the young people in the region of Bizkaia. It offers support for the self employed, through assistance to start up business projects, including the financing aspects, until the consolidation of these projects. It also provides job counseling services and facilitates access to first jobs, and extends its services to recycling programmes for qualified and unqualified younsgters. More information from: https://portal.bbk.es/servlet/Satellite?pagename=Negocio_Ext/GenericoPI/GenericoPITe mplateExt&c=GenericoPI&cid=1222942609807&localizador=%231158929044991&hizkunt za=_cast&idVolver=1158929044991&tipoVolver=Page - BEM, financial services and communication centres for migrants, Caja Castilla de la Mancha (Spain). Caja Castilla de la Mancha is the main banking partner of BEM Centres. BEM Centres offer one single space where tailored services for migrants are available, with the objectives to promote the social and financial integration and development of new residents, accompanying them and helping them in the process of adaptation and personal growth. These include financial products (e.g. personal loans, giros and transfers, debt consolidation etc) and communications services (facilities for long distance calls or recharging mobile phones), as well as insurance or legal assistance services. More information from: http://portal.ccm.es/ and http://www.grupobem.com/quienes_somos/partners.php?idioma=es 5 - Caixanova advice and reception programme for immigrants (Spain). Caixanova programme seeks to help migrants in a social exclusion risk to cover their basic physical, housing, education, psychological and social needs in order to increase their autonomy and independence, allowing them to settle in a satisfactory way. It offers support for temporary housing, labour inclusion -including through microcredit- and cultural integration, as well as legal information and advice, language classes etc. More information from: http://www.centrosocialcaixanova.com/obs/es/index.php/accion_social/detalle/08_02_cen tro_de_iniciativas_sociales_caixanova - Ostpol-Credit scheme for microenterprise start-ups to revive the eastern inner city of Offenbach, Savings Bank of Offenbach (Germany). The Ostpol-Credit scheme supported by the Saving Bank of Offenbach targets microenterprise start-ups, and also young graduates from the local University of Art and Design. Beneficiaries from the scheme are based in a business start-up campus located in the structurally weak eastern inner city area. The Ostpol loan is part of a package of services, including training, business advice, offices, network and contacts etc, provided through a local network of professionals. The involvement of the local public authorities (City of Offenbach, regional young entrepreneurs and industry- related associations, local Chamber of commerce and industry etc) reflects the importance of the scheme to support the economic and urban development of the city and of the region. More information from: www.ostpolkredit.de Two other initiatives were also part of the overview: - The “4 Wände und mehr” (“4 walls and more”) project launched by the Austrian Bausparkasse, which will support institutions working with homeless people or those threatened by homelessness (www.sparkasse.at); - the work currently being developed by Lloyds TSB in the UK with the Community Finance Development Association, which seeks to identify a different model for addressing financial inclusion. Core principles shared by the different schemes which, in the savings banks’ experiences, were key building stones to reach their objectives, were identified. They were discussed with a group of stakeholders including mainly social NGOs – Caritas Europe, European Liaison Committee for Social Housing-Cecodhas, European Consumer Debt Network, Secours Catholique - Réseau mondial Caritas, Finances et Pédagogie, Réseau France Active as well as CSR Europe, and DG Employment, Social Affairs and Equal Opportunities of the European Commission, and were enriched based on their experience developed both at European level and at national level 7 . A summary of the key success factors and lessons learnt is presented below. 6 7 See Annex 2 for the full list of stakeholders involved. IV. SUMMARY OF THE LAB FINDINGS 1. There is ground to develop specific support programmes for the population at risk of social exclusion A pragmatic approach to fight social exclusion leads to the recognition of the benefits of schemes targeting groups specifically at risk. This should however not be read as a position of principle in favour of differences of treatment for different types of clientele. It is important not to fully detach services provided for groups “at risk” from regular clients, which could increase further the feeling of exclusion. The overall objective of the involvement of savings banks is to work towards inclusive financial sectors and to increase the level of banked people. Through the development of specific support programmes, packages of adapted services and support, in a variety of fields, are made available at a single “counter” enabling beneficiaries to access comprehensive and tailored programmes, combining prevention, accompaniment and follow-up. Besides, services are offered in a way which matches the specific needs of the population targeted e.g. opening hours of centres for migrants, language skills of staff. The dedicated schemes are used as much to prevent social and financial exclusion as to support integration or re-integration into the social and economic life. Individual follow-up is required, even though beneficiaries have left the support schemes. The development of dedicated schemes is undoubtedly a way to bank people who otherwise would remain, or turn, unbanked, with the mid-term objective to enable them to (re)integrate the conventional banking system. It is important to mention at this stage the communication aspect on the existence of such dedicated schemes. It seems that for some of the targets, especially the migrants, the “word of mouth” channel and the strong links between members of a given community are the most efficient means to reach the potential beneficiaries. However, for a number of other groups, and especially for the people suffering from social exclusion in a literal sense, and living in isolation, information on these services must be made sufficiently and easily accessible. 2. The fight against social exclusion requires an integrated approach of individuals’ situation Social exclusion is directly related to banking exclusion. Citizens’ crisis situations are often not caused by a single event or occurrence, but are the results and consequences of a series of factors, all impacting on the social status of the individuals. Being banked is one pivotal part of the recovery process, e.g. regular transfers to pay basic expenses such as rent, gas and electricity bills or a bank account to which wages can be paid. That is why initiatives of a social nature developed, or supported, by European savings banks do not exclusively focus on the banking aspects. They often include a comprehensive set of services: social/education/medical/employment/housing/insurance etc, but also cultural and language support in the particular case of migrants. Banking services in this context are not a stand-alone offer but part of a package of advice and mutually reinforcing support services. 7 Banking support is a key component of these comprehensive programmes of social integration. The overall objectives of the schemes are to enable beneficiaries to actively participate in social and economic life and to reinforce their sense of responsibility, which includes helping them managing their finances with confidence. Parcours Confiance Platform of services 8 3. A network of professional partners is needed to offer comprehensive support In order to propose an efficient package of quality services to beneficiaries, savings banks involved in social schemes partner with public/private sector professional organisations, experts in non-banking fields (insurance, employment, training, psychological, housing, debt counseling service, welfare etc). Private partners can be NGOs (Caritas in Austria), but also companies such as Adecco France, the world leader in human resource solutions in the case of Parcours Confiance, or the Vienna Insurance Group, an insurance company for Die Zweite Sparkasse, or business networks (France active, Boutique de gestion in France), chambers of commerce in the case of BBK or Sparkasse Offenbach. Social foundations are also key partners in Spain. Public stakeholders can include municipalities or regions (Basque government for BBK, Offenbach City for Ostpol-Kredit, Vienna municipality’s strong involvement in the case of Die Zweite Sparkasse), as well as social services (e.g. Caisse d’Allocations familiales for Parcours Confiance) or universities (eg. University of Art and Design, HfG in Germany). Each of the partners is responsible in its own field of expertise, including banks. Complementary expertise is needed to leverage synergies. • Compulsory workshops about : relationship to banks, dealing with a budget… Education • Financial advice and coaching • Preparing loan transactions Finance Diagnosis, individual programme of action and follow up Social • Job search • Housing Local Caisse • Psychological Help d’Epargne branches • Bank accounts • Loans Finances et Pédagogie External partners • Means of payment • Cash withdrawals • Transfers • Savings accounts In this context, the professional support provided by banks is restricted to the financial field, be it banking facilities and products (microcredit, account facilities, loan, means of payment etc) or financial advice/diagnosis/coaching. No business plan for microentrepreneurs for example. It is highly important to build bridges between partner organisations, for an efficient coordination of the different dimensions of the schemes. Support measures and services must be developed in permanent cooperation with the partners, and there should be an ongoing counseling relationship between involved institutions on a given individual case. Partnership network of the BBK Gatze Lanbidean Foundation programme 9 BASQUE GOVERNMENT PROVINCIAL COUNCIL OF • LANBIDE BIZKAIA • SPRI • EMPLOYMENT AND TRAINING DEPT BBK Gazte Lanbidean Fundazioa • MENDIKOI • DEMA • DEPARTMENT OF LABOUR • BEAZ • DEPARTMENT OF EDUCATION NON PROFIT ENTITIES TOWN HALLS • CARITAS • BEHARGINTZA PROJECT • PEÑASCAL FOUNDATION • ADSIS • SARTU BUSINESS ORGANISATIONS UNIVERSITIES • CEBEK • BASK COUNTRY UNIVERSITY • ASLE • CHAMBER OF COMMERCE • DEUSTO UNIVERSITY • PROFESSIONAL TRAINING CENTRES [...]... for banks, without expected immediate return The savings banks model which exists in a number of countries, such as in Spain, are well suited to develop such social inclusion schemes, in compliance with their charter according to which parts of the profits are allocated to social activities and community projects The Spanish savings banks model to the service of Obra Social In Spain, the savings banks ... each savings bank In 2007, Obra Social covered social and health assistance projects for 32%, the rest being dedicated to culture and leisure (41%), Research and education (17%) and Historical and natural heritage (10%) In 2005 a study made by external consultants evaluated the impact of Savings banks social action in Spain and showed how 96% of the Spanish population was covered by savings banks ... SparCasse founded in 1819 Capital Research & Management 5% Austria Verein 5% • established as a savings- bank foundation in 2003 31% • major shareholder of Erste Bank Group: the largest foundation indigenous in the South Eastern / Central European region other institutional investors 42% employees 3% savings banks 7% Private investors 7% Seite: 3 Seite: 4 ERSTE Foundation Programme „Social Affairs“ •... unbankable • Establishment of a savings bank association with approx 40 members (“Verein”) • Establishment of as a society savings bank (VereinsSparcasse) by the savings bank society • Endowment with a capital of Euro 5.8 million by the Foundation • Subsequent (after the first 3 years) loss coverage by the participating partners (Erste Bank and other established savings banks in Austria) • managed and... members of Erste Bank and savings banks, who strongly identify with the project • a year and 4 months after its opening in October 2006, Die Zweite Sparkasse had gained widespread popularity, servicing over 1300 customers • According to estimates by experts, the number of potential customers of the Sparkasse is approx 40.000 in Austria Seite: 15 Seite: 16 Members of the Savings Banks Association „Sparkassenverein“... benefits of saving in a period marked by tough economic and social conditions LSEP are local initiatives, located in the territory of French Savings Banks 14 000 projects financed since 2001 S for Social 1895 The law dated 20th July sets up a Reserve Fund within each Savings Bank allowing them to fulfil their principal interest duties of providing finance for inexpensive housing, allotment gardens and... beyond, networks and organizations involved in the provision of social support at large Financial education must be part of the core elements taken into consideration to reach full social inclusion European savings banks commitment to Financial education Financial education is a key field of ESBG members’ contribution to society and interaction with stakeholders They play a key role in educating people... committed to social and cultural responsibility in this region: • This commitment is based on its historical roots • As successor to the savings association bank “Erste Oesterreichische Spar-Casse“, ERSTE Foundation draws its mandate from the tradition of the savings banks, which were founded more than 180 years ago to serve the common good Seite: 9 Seite: 10 Not a Really New Idea… Early 19th century... people in difficult life situations with a basis to re-start their lives and to recontribute to the overall stabilisation of society -> “set up Savings Banks! ” (Emperor Franz I) Seite: 11 www.erstestiftung.org Seite: 12 2 Programme „Social Affairs“ Project: a new savings bank what … A service for people hitherto considered unbankable In cooperation with social welfare and counselling organisations • an... of social inclusion schemes requires a strong mobilisation of banks staff, since they are operated by dedicated teams of bankers (Parcours Confiance) or a specific structure for example run by volunteer employees and pensioners Die Zweite Sparkasse is entirely managed and operated by employees and pensioners of Erste Bank and the savings banks in the provinces, on an honorary basis Staff with specific . European Savings Banks Group "CSR Lab"on Business involvement to enhance social inclusion at local level European Savings Banks Group. Public support to the Alliance On behalf of its member banks, the European Savings Banks Group (ESBG) expressed its public support to the Alliance