Green swans and pink washing: Promoting a strong culture of environmental and social responsibility in financial institutions

Abstract

Anyone trying to build a strong culture of social and environmental responsibility within a financial institution must choose from a range of fundamentally different values, not only from legislation, but also from public opinion, experiences of underprivileged groups, religious beliefs and from the world of science and academia. One way to identify, understand and reconcile different values is through a system drawn from across the social sciences known as the theory of the convention. Applying this framework to the range of relationships needed to deliver financial intermediation allows financial professionals to prioritise key values. Many of these key values stem from the technical disciplines needed to evaluate risk and perform the core functions of a financial intermediary. However, institutions must also maintain long-term relationships with clients, staff and a range of groups at higher risk of vulnerability within their community, and that involves adopting a creative approach to combining the values of the technical expert with empathy and a sense of stewardship toward human and environmental resources. An understanding of the relationships and values at play can help actors to create and modify conventions that, in turn, contribute to a strong culture of social and environmental responsibility.