Strategy & management
Sustainability at DZ BANK AG and across the DZ BANK Group: How do we cooperate, and what are the hallmarks of ‘responsible’ corporate governance?
Sustainability topics are coordinated by the Communications, Marketing and Sustainability division of DZ BANK AG. The head of the division reports regularly to the Chief Executive Officer on the progress being made in specific areas. A sustainability working group, made up of representatives from different departments, supports our sustainability team with its operational sustainability management tasks.
The DZ BANK AG sustainability program provides an overview of our goals. We compare these goals against market conditions and the needs of our stakeholders on an ongoing basis, report on measures that have been taken or are planned to be implemented to achieve our goals, and set ourselves new goals.
To step up the dialog on sustainability in the DZ BANK Group, we brought together the group’s sustainability activities and founded the Group Corporate Responsibility Committee (CRC) in 2014. The committee is made up of the sustainability coordinators of the DZ BANK Group. The Group CRC provides input for the departments so that common standards can be developed. Our objective is to exploit market opportunities and avoid risk while enhancing corporate citizenship.
By signing up to the United Nations Global Compact in 2008, DZ BANK AG committed to ten universally accepted principles covering human rights, labor standards, the environment, and the fight against corruption. In 2013, DZ BANK AG extended this commitment to the following DZ BANK Group companies: Bausparkasse Schwäbisch Hall, DZ HYP, DZ PRIVATBANK, R+V Versicherung, TeamBank, Union Investment, and VR Smart Finanz. All of these companies use the Global Compact principles as an important guide for their behavior. They support the principles comprehensively and apply them in all areas of their business.
The basis for responsible corporate management is provided by a broad set of components that cover all parts of the business. These range from our general guidelines for business operations and for the investment and lending business in particular to our responsible HR policy, sustainability training courses, sustainability targets, and climate strategy. The resulting framework enables all employees to engage in sustainable practices in their day-to-day work.
DZ BANK attaches particular importance to achieving effective corporate governance. For us this principally means compliance, risk management, reputation management, and transparent decision making.
Compliance plays an important role in the financial sector and is something that DZ BANK and the DZ BANK Group have viewed as a natural part of their activities for many years. Governments as well as national and international regulators are calling on the financial services industry for cooperation and support in the battle against insider trading, market manipulation, corruption, and other criminal behavior, and for the imposition of financial embargoes. Additional rules regulate transactions and subject institutions to disclosure requirements and stringent inspection. This restrictive statutory environment has a fundamental effect on the way we do business as a bank. Furthermore, lawmakers and regulators have made increasing demands on banks’ compliance functions in recent years. At all sites, our staff receive regular compulsory training in banking compliance, the prevention of money laundering, the ban on market price manipulation, and fraud prevention. This compliance training also covers how to fight corruption.
DZ BANK’s code of conduct, introduced in 2012, contains various measures to prevent fraud. These include guidelines for dealing with gifts, written procedures for fraud prevention, a whistleblowing hotline, and training.
DZ BANK AG makes this statement under the provisions of the Modern Slavery Act 2015 (the “Act”). The Act requires the Bank to state what actions it has taken during the financial year ending 31 December 2018 to ensure that neither slavery nor human trafficking took place in its operations or supply chains.
Respect and Protection for Human Rights
DZ BANK is committed to democracy, tolerance, equality of opportunity and to human rights. This conforms with the cooperative values which underpin our activities: Mutuality, partnership and responsibility for the community.
As the central institution of the cooperative banks in Germany, we make an important contribution towards a functioning financial system. We are very conscious of our special responsibility towards customers, business partners, shareholders, employees and society as a whole. Against this backdrop, exactly what business activities we focus on and how we operate these is of central importance.
On signing the Global Compact of the United Nations (UN) in 2008, DZ BANK committed itself to ten globally applicable principles in the field of human rights, labour norms, environment and the fight against corruption. These basic principles form a binding framework for our operations. The prevention of slavery and human trafficking is part of our understanding of human rights. DZ BANK has taken several steps to ensure that slavery and human trafficking does not take place in its supply chain, nor in any part of its business during the financial year.
Human rights and customers
DZ BANK subjects both its own investments as well as those made with the loans and finance it provides to a sustainability assessment which also includes respect for human rights. Since 2009, we have worked with a sustainability checklist for lending and project finance based on the UN Global Compact and the Equator Principles. Using this list, we evaluate all factors relevant for finance as regards their environmental and social risks, also including respect for human rights. Finance for companies which breach internationally recognised principles in the field of human rights and labour law is excluded as a matter of principle. Our training sessions on sustainability in lending also take account of human rights.
Human rights and suppliers
Respect and protection for human rights also plays a major role in DZ BANK's selection of service providers and suppliers. All procurement processes must satisfy social and environmental standards which include human rights and labour practice issues. DZ BANK requirements are based, amongst other things, on the principles embodied by the UN Global Compact and applicable conventions of the International Labour Organisation (ILO). As of 2010, we have secured commitments from all suppliers to comply with these standards and principles within the framework of a Sustainability Agreement. Breach can ultimately lead to the exclusion of the supplier.
Human rights and employees
As an employer, DZ BANK respects and promotes the human rights of its employees, the majority of which work in Germany. There, respect for human rights is guaranteed by law. In addition to this, we secure undertakings from our employees to respect human rights based on a Code of Conduct. Corresponding training programmes and seminars are obligatory. We do not tolerate any discrimination of employees or third parties on the basis of age, sex, ethnic origin, nationality, religion, political view, ideology, race, disability or sexual identity.
No complaints in 2018
In case of any questions on human rights or any grounds to suspect a human rights abuse, stakeholders or whistleblowers should contact DZ BANK Compliance, the ombudsman or the works' council. In the year 2018, there were (for the London branch) no formal complaints in relation to human rights abuses or working practices.
DZ BANK actively seeks to engage with its stakeholders and believes it is important to maintain an ongoing dialog that is based on trust. This enables their interests, expectations, and experiences to be incorporated into the way that we operate as a business. These stakeholders include customers, employees, business partners, analysts, and investors as well as associations, the media, political decision makers, non-governmental organizations, and academia. The preferences of our stakeholders and the requirements that they have of DZ BANK are fundamental to our sustainability approach and strategy and also provide the framework for the content of this yearly report.
To effectively manage sustainability at DZ BANK, we need to have as deep an understanding as possible of our stakeholders’ social, environmental, and economic interests as well as their experiences and expectations. The first group-wide stakeholder survey on our sustainability activities, conducted in 2015, provided us with key information in this regard. This online survey of the DZ BANK Group entities builds on the DZ BANK survey of external and internal stakeholders that we carried out for the first time in 2012. It was conducted in addition to the ongoing dialog that we engage in with our stakeholders.
The group-wide stakeholder survey was based on the guidelines of the Global Reporting Initiative (GRI). Our sustainability department used these guidelines to first establish the topics that were of relevance both to sustainability and to our stakeholders. We prioritized these topics in accordance with the principles of materiality and taking into account the results of the online survey and then validated them in internal workshops.
In choosing which stakeholders to survey, we took account of their diversity and their relevance for us as a company. The following key points emerged:
- Among our most important stakeholders are the cooperative banks (which are both our customers and our owners), the corporate and retail customers of the group entities, and the employees of DZ BANK and the DZ BANK Group.
- Suppliers and service providers as well as trade associations and investors are highly relevant to us from a commercial perspective.
- We also listened to critical opinions from non-governmental organizations (NGOs) and rating agencies as well as from academia and politics.
The 2015 survey covered five areas of action, each broken down into various topics, and was based on analyses of the prevailing social sustainability trends. With a response rate of 46 percent, it provided valuable input for core areas of our work and reporting systems.
The materiality matrix below provides an overview of the topics and their weighting.
The individual entities then carried out their own analysis of the group-wide results. At DZ BANK AG this was done in a workshop organized by the sustainability working group, in which representatives of various departments discussed the stakeholders’ answers and compared them with the company’s own perspective. The result is a materiality matrix that shows how much relevance the internal and external stakeholders assign to the different areas of action.
Implications for us as a business (102-44)
Our stakeholders’ opinions again underlined the importance of strategically integrating sustainability into DZ BANK’s core business across all areas of our operations. The respondents assigned the greatest relevance to sustainable corporate management and to sustainable products and services. Within these areas, they gave the highest scores to ‘cooperative principles and values’ and ‘corporate strategy and success’.
The results show that sustainable products and services, corporate social responsibility, and a business model that is based on cooperative values are particularly important for both employees and stakeholders. For DZ BANK, this means that we need to continue to integrate into our systems the principle of sustainability that lies at the core of the cooperative model. We will place it at the forefront of our business activities and continually align it with the cooperative values in order to meet our stakeholders’ expectations in terms of sustainability. We will also use the results of the survey as guiding principles when selecting the topics for our future sustainability reporting. The next survey is scheduled for 2018.