The Rating of the Social and Ethical Responsibility of Banks: a Sector at the Crossroads

Over the last decade, companies from the banking sector have made the headlines with numerous allegations and record fines totaling several hundred billion Euros. In addition to unethical business practices and failures of internal control systems, large sums of money are withheld from tax authorities, representing 2 to 5% of global GDP. Financial companies are also criticized for the lack of consideration given to environmental and social impacts of their financing and lending operations. Vigeo Eiris' rating of the social responsibility of more than 350 financial institutions around the world confirms that the sector is still struggling to fulfil its compliance obligation, and to prevent ethical and sustainability risks. The average overall rating of banks and financial institutions remains limited (30.8 out of 100), although it is higher than the average score of the 4,000 rated companies across all sectors (24.2 out of 100). The sector appears to be at the crossroads: behind a minority of leaders with innovative commitments and practices, the majority of operators in this sector have difficulty in committing and reporting on their efforts towards sustainability.