Green banking the value of ISO 14001 certification in the financial sector by Otti Bisang In brief Good environmental practice and good financial performance go hand in hand, says Otti Bisang of Environmental Management Services at the Credit Suisse Group, which was reportedly the first major financial services institute worldwide to have achieved ISO 14001 certification. In 1995, in collaboration with four other banks and a major insurance company, the Group published its Guiding Principles on Energy Use, based on the Energy 2000 conservation programme launched by the Swiss Government. Now widely accepted as good management practice, the guiding principles establish environmental objectives concerned chiefly with energy consumption, long recognized as having the greatest environmental impact of all the bank s operations. In his article, Mr. Bisang outlines quantitative goals to reduce electricity, heat and paper consumption and stabilize waste production, and describes some aims of the Group s eco-controlling strategy involving environmental measurement, auditing and reporting in accordance with ISO 14001. He reveals that certification of the bank s offices in Switzerland offers substantial benefits, particularly in its relationships with suppliers, investors and the media. ISO 14001 certification represents external confirmation that we are doing the right things in the right way, says Mr. Bisang, commenting that it makes us more attractive to investors and portfolio managers with green leanings. The Group has found negotiating environmental issues with its suppliers and outsourcing partners much easier as a certified company, in some cases requiring such partners to establish their own EMS as a condition of business. He predicts that EMS integration into normal management systems will gain in importance as companies realize they can cut costs, manage risks and maximize earnings potential by doing so. The author, Otti Bisang, is Head of Environmental Management Services, Credit Suisse Group. ISO 14001 certification makes us more attractive to investors and portfolio managers with green leanings Credit Suisse Group: the company As a leading global financial service company, Credit Suisse Group 1) is present in more than 470 locations worldwide and in every key financial centre. The Group employs some 64 000 people, of whom 28 000 work at 370 locations in Switzerland. Since April 1997, our Swiss banking offices have been operating with an ISO 14001-certified environmental management system the first granted to a major financial services institute worldwide. In April 2000, the re-certification was achieved and the system has now been extended to cover all banking operations (product ecology) worldwide. The company s environmental policy Credit Suisse s commitment to environmental protection and the conservation of natural resources is an integral part of the bank s corporate philosophy. The fundamental principle of our environmental policy states that we aim to create the preconditions for continuous improvement by systematically monitoring, recording and assessing our consumption of energy and natural resources, emission levels, waste and environmental risks, with particular attention paid to electricity consumption. Our environmental objectives We have long recognized that energy consumption has the greatest environmental impact of all the bank s operations, and it is the focus of special attention in our Guiding Principles on Energy Use, published in autumn 1995. This policy document was the product of a collaborative project between Credit Suisse, four other banks and a major 1) Credit Suisse Group, Environmental Management Services/CUCE, P.O. Box 100, CH-8070 Zurich, Switzerland. Tel. + 41 1 332 26 09. Fax + 41 1 333 76 33. E-mail otti.bisang@csg.ch Web www.csg.ch/ecoreport98 7
insurance company, based on Energy 2000, an energy conservation programme launched by the Swiss Government. The principles are now widely accepted as good management practice. The policy establishes a number of qualitative and quantitative environmental goals, including: We established a corporate Environmental Executive Board responsible for monitoring and documenting performance and progress and giving strategic advice on environmental issues. It is chaired by a member of the Executive Board responsible for environmental issues and one board member of each of our five business units (retail, investment and private banking, asset management and insurance). Any measures necessary as a result of failure to meet defined targets or structural changes are implemented directly or recommended to the relevant line manager. Qualitative goals: 8 to reduce energy consumption in the production of goods and services to extend recycling initiatives to maximize the sustainable use of renewable resources to avoid the use of substances which have been classified toxic Certification was a valuable aid to external communications with the media and in discussions with our outsourcing partners Quantitative goals: Electricity 10 % to 110 kwh/m 2 by 2004 Heat 10 % to 80 kwh/m 2 by 2004 Paper 15 % from 1994 by 2004 60 % of total consumption to be recycled paper by 2004 > 15 % of photocopier paper to be recycled paper by 2004 Banking in action in today s digital age: part of the information technology suite at the new Credit Suisse First Boston (CSFB) New World Building in London, which also provides the subject of the other photos illustrating this article. Credit Suisse recently went through its ISO 14001 recertification audit. As it stands now, Credit Suisse Group Switzerland plus its banking operations globally will be covered by the new certificate. Other business units were to be audited and could be also be covered by the certificate. Implementing our eco-controlling strategy Some of the aims and objectives of our eco-controlling strategy (currently limited to internal services only): to measure the extent to which specified environmental targets have been met to ensure that environmental measures are initiated and implemented to act as efficient and accessible management tools (reporting, benchmarking) to identify the relevant decision-makers to describe the necessary communications functions Environmental Executive Board Internal and external communications: environmental reporting Credit Suisse conducts active and open dialogue both internally and externally, and our environmental data is accessible. We believe that actions speak louder than words and thus regard our environmental policy as an expression of our social responsibility rather than as an element of our communications strategy. The bank plays an active role in the formulation of standards for environmental reporting and the promotion of benchmarking. We found negotiating environmental issues with our suppliers and outsourcing partners much easier as a certified company The benefits of ISO 14001 implementation The Credit Suisse Group network in Switzerland employs the majority of the Group s workforce and operates its large-scale computing centres. Thus, in environmental terms, its Swiss operations present the biggest challenge as well as providing the largest scope for action.
The Credit Suisse First Boston (CSFB) New World Building, which was part of the London audit for the Credit Suisse s ISO 14001 certification, has been built to meet the highest environment and safety standards. 9
10 ISO 14001 certification of Credit Suisse Group banking offices worldwide represents external confirmation that we are doing the right things in the right way. In particular, it means that we can demonstrate continuous improvement in our environmental performance both in terms of our internal operations and the environmental impacts of our products and services, making us more attractive to investors and portfolio managers with green leanings. If a bank ensures that its own operations are carried out in an environmentally friendly manner and talks openly about it, then its employees will tend to absorb good habits and carry them beyond the confines of the bank, spreading ecological awareness and acting as ambassadors for environmental improvement. We believe that an ISO 14001-based EMS reduces the risk of environmental disasters In our view ISO 14001 implementation offers substantial benefits: The scrutiny in the months before the certification audits provided the impetus to achieve optimal environmental management. Certification was a valuable aid to external communications with the media and in discussions with our outsourcing partners, and an excellent tool to communicate what we think about good management practice. The reviews by impartial environmental specialists already assisted the further development of our EMS. Environmental goals help us to improve our facility management and thus lead to cost savings. Being certified improves the marketing of the green and ethical funds we offer to our institutional and retail customers. Relationships with suppliers We found negotiating environmental issues with our suppliers and outsourcing partners much easier as a certified company. It adds additional weight to one s arguments and for Credit Suisse it facilitated the inclusion of environmental clauses in contracts with outsourcing partners. In some cases, we even included a contractual requirement that our partners establish a certified EMS. We believe this approach to be of key importance for the future as banks and insurance companies outsource more and more services in order to concentrate on core businesses. Also, we consider it the duty of the parent company to ensure that those partners Good environmental practice (e.g. a certified EMS) and good financial performance go hand in hand comply with common environmental standards. Our experience shows that if environmental clauses are negotiated from the beginning, it is much easier to convince outsourcing partners about the benefits of having an EMS. ISO 14001 in our risk programme We believe that an ISO 14001-based EMS reduces the risk of environmental disasters. But we rely entirely on our own risk assessment tools to quantify the remaining risk and calculate the insurance premium or interest rate. Having a certified EMS speeds up risk assessment because all relevant environmental data is already available or quickly obtained. We calculate our premiums based on the data we receive from the companies. Experience shows that good environmental practice (e.g. a certified EMS) and good financial performance go hand in hand. If the data proves that this is the case for a given company, it will benefit It is much easier to select stocks of ISO 14001-certified companies for a green and/or ethical fund from reduced rates. However, since environmental risk is usually only a small factor in our entire risk management programme, we do not give preferential treatment to ISO 14001-certified firms. Making ISO 14001 a more meaningful tool for risk managers We have several suggestions in this context. Firstly, although it is not a requirement to make the results of the external ISO 14001 audits publicly available, it would be extremely helpful to our risk managers and equity analysts if companies were required to do so. Secondly, we need a system to ensure that all data published by a
company is validated by external auditors. Since we rely on up-todate information in our risk assessment, there should be a system in place to ensure that data published are (a) updated on a regular basis and (b) undergo some sort of quality control. Incentives for ISO 14001 implementation in the banking sector It is much easier to select stocks of ISO 14001-certified companies for a green and/or ethical fund. These days, we see more and more pension schemes which demand that their funds are invested in a sustainable manner. This, of course, requires a recognized standard which is accepted as proof that a company handles environmental issues in a sustainable way. In summary Integrating environmental factors into normal management systems will gain in importance as New edition of ISO 9000 Compendium companies realize they can cut costs, manage risks and maximize earnings potential by doing so. An efficient way is to implement an environmental management system in accordance with ISO 14001 or EMAS accreditation guidelines. Q EMS integration will gain in importance as companies realize they can cut costs, lessen risks and maximize earnings potential by doing so For the latest information on ISO work and activities, come and visit us at: www.iso.ch A selection of ISO 9000 and ISO 14000 brochures is available free of charge on ISO Online. For pro-active managers only. This is how ISO is advertising the newly published 8 th edition of the ISO Standards Compendium: ISO 9000 Quality Management. There s nothing preventing you from waiting until the ISO 9000 Year 2000 revisions are published before you start thinking about bringing your quality system up to the new standard, says ISO, unless you re one of those pro-active managers who believes that continual improvement is not just a slogan, but sound business practice if you want to stay ahead of the crowd. If so, the ISO 9000 revisions are just the standards for you. And you don t have to wait until they are published as International Standards before you get moving. The newly published eighth edition of the ISO 9000 Compendium includes the Draft International Standard versions of the future ISO 9000, ISO 9001 and ISO 9004. So you can get an idea now of the direction the revised standards are taking and begin planning your transition. In addition, the Compendium includes 25 other ISO 9000 and ISO 10000 documents making up the ISO 9000 family. All you need for building and bettering quality in your organization. ISO conclues: Of course, you can always sit back and wait. Even until it s too late. The ISO Standards Compendium: ISO 9000 Quality Management, eighth edition, format A4, English edition (ISBN 92-67- 10318-0) 700 pages, French edition (ISBN 92-67-20318-5) 742 pages, is available from ISO member institutes and from ISO Central Secretariat in Geneva. A full list of ISO members is posted on ISO s Web site: www.iso.ch Q 11