Commonwealth Bank and HSBC Bank: Two Different Banks in the Banking Sector
Commonwealth Bank and HSBC Bank both are in the banking sector; however, they belong to the different countries. Commonwealth Bank has it headquarter in Sydney, whereas, Commonwealth Bank has it headquarter in London.
Commonwealth Bank of Australia is a multinational bank, established in the year 1911 as a government bank. Commonwealth Bank has its branches in more than 1150 locations and it mainly provides a variety of financial products and services to the customers. Commonwealth Bank provides finance and insurance, corporate banking, consumer banking, global wealth management, investment management and private equity to the customers. Commonwealth Bank reached the revenue of AUD 26.05 billion in 2016 and it had more than 51,900 employees in 2017 (Commbank.com.au, 2018). Core business activities of Commonwealth Bank are associated with accepting deposits from the customers; give loans and providing investment products to the customers. Core activities of Commonwealth Bank are related to Australia’s leading provider of financial services, business and institution banking and retail or premium banking along with funds management, insurance, superannuation and share-broking services and products.
HSBC Holdings is a public limited company and it is in the industry of banking and financial services. HSBC was established long back in the year 1865; however, it was registered as HSBC Bank in 1991 in London. HSBC mainly provides retail banking, investment banking, corporate banking, private banking, mortgage loan, credit cards and insurance service to the customers (Hsbc.com, 2018). HSBC had the revenue of US$51.445 billion and numbers of employees in 2017 were 228,600. HSBC has more than 3900 branches in 68 countries along with 38 million customers. Core business activities of HSBC are associated with principal business activities, group and divisions. HSBC does the business in customer-facing activities mainly dividing the business into four segments; commercial, global, retail and global private banking (Hsbc.com, 2018). Commercial banking of HSBC operates in 53 countries and commercial banking is associated with global trade, global liquidity, global banking, cash management and insurance and investment.
Commonwealth Bank led to $2.8 billion in renewable energy projects and Commonwealth Bank also spent $1.02 billion in climate bonds arranged. Commonwealth Bank provided training to 2,790 employees on responsible leading to investing and procuring. Since 2009, Commonwealth Bank reduced 48.5% of direct emission in Australia and more than 570,000 students got enrolled through financial education programme for the youth (Commbank.com.au, 2018). Corporate social responsibility has its relation to three aspects, profit, planet and people. In the case of business, Commonwealth Bank provided a salary of $6.3 billion in 2017 and they spent $4.8 billion as an operational expense. Commonwealth Bank provided a tax of $3.9 billion in 2017. For the betterment of the society, Commonwealth Bank has been following the global megatrend of providing better customer experience, diversity and inclusion, financial stability, disclosure, workforce well-being and responsible leading. In addition, Commonwealth Bank also provides the security of digital innovation privacy and data security, macroeconomic and betterment in the case of climate change. Commonwealth Bank educates the children with a value of money and helps the people to prepare the workforce of the future (Buckler, 2017). In case of innovation, Commonwealth bank uses the innovation and capability to empower the people and the community. Most importantly, Commonwealth Bank plays important role in limiting the climate change.
Commonwealth Bank: A Multinational Bank Focused on Financial Products and Services
HSBC Bank follows mainly two elements corporate social responsibilities, the first one is promoting education to the community and to the employees and the second one is environmental sustainability. Corporate social responsibilities of HSBC Bank demonstrate the social and economic development of communities making safeguarding to the environment (Parsa et al., 2015). Community investment of HSBC is significant which leads to the education to the community and sustainability of the community as well. Promoting education is associated with the employment enriching vocational training, empowering women and cultural and language understanding. Environmental sustainability is related to the freshwater sustainability, access to safe water and water and sanitation. 240 of the largest suppliers accepted Ethical and Environmental Code of Conduct of HSBC and sustainability operation is the main focus of HSBC, supply chain collaboration, HSBC Eco-efficiency fund, energy, waste, green building, data centre and paper usage (Hsbc.com, 2018).
Climate action goal is relevant to Commonwealth Bank as there is no such country which is not experiencing first-hand drastic effect of climate change and countries are facing the issue of greenhouse gas emission. Greenhouse gas emission issue is 50 per cent higher than the 1990s. Global warming is also causing the long-lasting issue to the climate change; therefore, the countries are facing the problems like a tsunami, flooding, cyclone and storm (Undp.org, 2018). Commonwealth Bank is trying to focus on zero emission economy by 2050 and they want to associate the opportunity and mitigate the risk of climate change. In addition, industry, innovation and infrastructure goal is another target for Commonwealth Bank as these factors are crucial drivers to the development and economic growth of the economy and organisation. In any part of the world, people do not live in cities and the people do not have mass transport; renewable energy is getting famous (Plambeck & Taylor, 2015). Commonwealth Bank uses the innovation to empower the human resources, business and communities so that they can improve the social outcomes along with financial wellbeing.
Quality education goal is relevant to HSBC as the main focus of the social report is based on education programmes given to the young generation. Many of the regions are trying to reach the target of universal primary education. Literacy rate has been increased in the last five years and progress has also been seen in the field of education (Undp.org, 2018). HSBC focuses on providing education to the disadvantaged young children to empower them. Clean water and sanitisation is another goal appropriate for HSBC as HSBC in developing countries is trying to provide environmental sustainability particularly focusing on the accessing to safe water and sanitation. Water scarcity can affect more than 40% of the people across the world and since 1990; almost 2.1 billion people have gained access to the drinking water (Russell-Smith et al., 2015). HSBC is trying to improve the condition of supplying of renewable freshwater.
HSBC Bank: Retail Banking, Investment Banking, Corporate Banking, Private Banking, and Insurance Services
Social accounting helps to promote accountability and it facilitates and establishes the organisation’s objectives (Zadek et al., 1997). There are eight principles of SEAAR (Social and Ethical Accounting, Auditing and Reporting).
Inclusivity principle in social and ethical accounting reflects the accounts and views of stakeholders. Inclusivity principle accommodates the diversity of objectives and values (Zadek et al., 1997). Commonwealth Bank wants to excel at improving and securing the business, people and community. Diverse stakeholders hold various issues and views which impact the business decision. Stakeholders’ values of accountability, integrity, collaboration, service guide and excellence help the Commonwealth Bank to get success. On the other side, HSBC Bank segments the stakeholders as dormant stakeholders, dominant stakeholders, dependent stakeholders, demanding stakeholders and dangerous stakeholders. Comparability principle enables the work process and performance of the organisation on the basis of the assessment prior periods of the external benchmark. Commonwealth Bank has set the external benchmark through stock performance. Performance of HSBC bank has been done through NPS benchmark and it follows Six Sigma benchmark (Suliman et al., 2016). Completeness principle is stated that every aspect of the company’s activities should be systematically and deliberately excluded from the assessment. Commonwealth Bank publishes the report of corporate social responsibility assessing every aspect of the business. HSBC Bank also shares all aspects of the social responsibility and financial information each year. Evolution principle covers up the company’s social responsibilities and footprint; this may vary with time with significance. Commonwealth Bank shows progress in the range of social initiatives and it is included its long-standing investment for the children and youth programme. HSBC Bank supports the responsible global transition to net zero emissions by 2050 (Hsbc.com, 2018). Management policies and systems principle are about organisational learning which is required systematic process and policies covering the area for the accounting itself. Commonwealth Bank has its department to publish the social accounting policies and the responsibilities. HSBC Bank also publishes the systematic processes for the social accounting each year. Disclosure is the conflict between external audiences and internal needs which is determined for the extent and nature of disclosure (Uhrich, Koenigstorfer & Groeppel-Klein, 2014). Commonwealth Bank always measures the internal management needs as well as the external agencies so that they can provide the community support. HSBC bank publishes the social report to disclose the matter to the audiences and the customers get to know about the new stance of the bank. Externally verified principle depends mainly on putting stress on SEARR as the management tool and it can also be taken as the organisational learning. Therefore, Commonwealth Bank takes the account of the externally verified agency to measure the social impact. On the other side, HSBC strengthens the accountability on legitimacy in social activities. Continuous improvement aims to assess the development of social approach rather just a retrospective view on the performance of the organisation (Roy, Sarkar & Parvez, 2015). Commonwealth Bank has a team of delivering the best for corporate social responsibility and they state the objectives of the organisation on social aspects. On the other side, HSBC does not just segregate the performance on a team basis; it also sets the goals of the organisation.
Corporate Social Responsibility Initiatives: Commonwealth Bank and HSBC Bank
Commonwealth Bank of Australia follows the stated values of collaboration, integrity, accountability and excellence in the field of banking. Commonwealth Bank commits to uphold the guiding framework of the vision of the organisation. Integrity leads to the trustworthiness of everyone. In addition, accountability means understanding and delivering the best to the customers (Cooper, 2017). Collaboration with Commonwealth Bank means to speak and act respectfully to the customers. Excellence means get the basic at first on profitability and in social responsibility. Service also means to help community people in need. These values also reflect on the social report of the organisation Commonwealth Bank where the bank measures and provides data on the customer experience, diversity inclusion, assistance on climate change, financial stability, workforce wellbeing, responsible leading, digital innovation and macroeconomic condition as well as climate change issue. External bodies to measure the social responsibility of Commonwealth Bank are an external advisory planet, customer advocate council and indigenous advisory board (Commbank.com.au, 2018). Commonwealth Bank updates opportunity initiative scoreboard, CDP submission and reconciliation action plan and tax transparency code.
Values of HSBC Bank starts with acting with courageous integrity. HSBC is a dependable bank and it is standing firm delivering a commitment to the customers. HSBC is open to various ideas and cultures that listens and treats to the people (Watson, 2018). In addition, HSBC is connected to the communities, customers and regulators that build a connection with external issues. First, HSBC showcased the carbon emission which is getting reduced with time and HSBC did the charitable donation to different regions. The economic benefit of HSBC shares to the communities and environment, employees, the government in taxation, shareholders and suppliers (Hsbc.com, 2018). HSBC also started the programme or initiative of the climate change so that the communities can live happily. In the profit section, it makes different strategies to improve insurance, commercial banking and financing in long-term sustainable development.
6. Conclusions and reflecting on groups’ discussions of these companies
Commonwealth Bank’s social reports explain continuing progress of the banks across different ranges of initiatives. Commonwealth Bank invests socially to provide financial help in education programme for the youth and children. Commonwealth Bank shares the detail of the investment for the betterment of the people and planet to limiting the climate change issue. Commonwealth Bank also wants to develop the sense of money management in the early years of people lives and people can equip with financial skills. Renewable energy is another key side of the future of the organisation. Commonwealth Bank spent $16 million in education and 6,000 customers got assistance in hardship. Commonwealth Bank commits to improving the condition by doing something better for the community. On the other side, HSBC Bank has its own set of social and economic development agenda where the communities can feel safe with the safeguard of the environment. In case of environment sustainability, HSBC does not do a charitable donation for society and environment and it does right balance between society and bank’s business. HSBC focuses on the social development, consumer education, staff volunteering and ethical banking.
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