Interpreting banks’ sustainability initiatives as reputational risk management and mechanisms for coping, re-embedding and rebuilding societal trust

Mohamed Saeudy, Jill Atkins and Elisabetta A.V. Barone

Qualitative Research in Financial Markets, 2021, vol. 14, issue 1, 169-188

Abstract: Purpose - This paper aims to contribute to a growing literature in sustainable and green banking by exploring the views of senior banking representatives towards the implementation of sustainability initiatives through extensive interview research. The authors explore the extent to which such initiatives are embedded within the banking industry, whether they represent risk management mechanisms and whether they are imbued with reputational risk management rather than a genuine response to ethical societal concerns. Design/methodology/approach - Qualitative semi-structured interviews were conducted with UK bank managers. The interviewees’ utterances are interpreted through a sociological theoretical lens derived from the study of Giddens and Beck, allowing us to conclude that external initiatives such as the Equator Principles seem to be adopted as re-embedding mechanisms that can rebuild societal trust, as well as representing mechanisms of reputational risk management. Findings - The analysis suggested that internal sustainability initiatives were interpreted as coping mechanisms whereby bank employees can recreate their protective cocoon, reinstating their ontological security in response to the high consequence risks of climate change and other related systemic factors that create overwhelming feelings of engulfment. Originality/value - Using Beck’s risk society theory as a theoretical lens through which to interpret the interview data allows a number of concluding comments and suggestions to be made. The findings resonate with earlier research into institutional investors’ attitudes towards climate change that found their engagement and dialogue with companies around climate change issues to be imbued with a risk discourse: their initiatives and actions were dominated by risk management motivations.

Keywords: Sustainability initiatives; Equator Principles; Societal trust; Sustainable and green banking (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-02-2021-0024

DOI: 10.1108/QRFM-02-2021-0024

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