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64 Mapping the Field

16
strategy’. Yet, despite the motives for engaging in it, CSR initiatives are nonetheless
of instrumental value to the firm in that research has over and again found that these
initiatives are related to reputational returns and an overall better financial perfor-
mance. 17 Box 3.1 presents a case study of the Co-operative Bank in the United
Kingdom, an organization that places CSR at the heart of its business operations and
market strategy.

Box 3.1 Case study: the Co-operative Bank and
corporate social responsibility

The Co-operative Bank PLC is a mid-size clearing bank operating in the United
Kingdom. By the mid-1980s the enviroment and context of the Co-operative Bank
had changed dramatically because of the financial service revolution where deregu-
lation had removed barriers to entry (e.g. building societies), new technology had
become the basis of competition and the consumer had become more sophisticated.
In short, there was at that time an increase in competition both between the banks
and within the financial sector as a whole within the UK. As a result, the major banks
(including Barclays, NatWest and the Bank of Scotland) turned to a more selective
positioning strategy, placing the Co-operative Bank PLC at a major competitive dis-
advantage because of the high awareness that these other banks enjoyed through
size, high street presence and advertising expenditure. Hence, the Co-operative Bank
PLC needed to find itself a niche or secure a long-term positioning strategy.
The Bank started a soul-searching exercise and reinterpreted the Co-operative
philosophy that lies at its foundation. The Bank asked itself whether it can ‘conduct
its business in a socially and environmentally responsible manner while being consis-
tently profitable at the same time’ and concluded that it could. As the Bank’s web-
site now states: ‘In fact we believe that, in the years to come, the only truly successful
businesses will be those that achieve a sustainable balance between their own inter-
ests, and those of society and the natural world … The Co-operative Bank is seeking
to achieve this balance’.
The Co-operative Bank PLC is indeed now well known within the financial and
banking industry for its unique ethical positioning and CSR reporting that distin-
guishes it from its competitors. This ethical positioning strategy, according to some
academic commentators, is not so much a moral affair but needs rather to ‘be seen
as a pragmatic response to the Bank’s conundrum relating to its positioning strategy’,
where ‘the Bank could promote itself as a proponent of people’s capitalism, an ethical
bank, in contrast to the images of the big banks tainted by association with Third
World debt, South African involvement, city scandals and huge profits’. 18
Whether its ethical policy is indeed based on more pragmatic and economic rather
than purely moral reasons, the Bank’s strategy has nevertheless been successful on
many accounts. Since launching its ethical positioning in May 1992, the Bank has
attracted large numbers of customers who do not wish their money to be used in
ways that they object to ethically, as the Bank will not do business with certain organi-
zations deemed ‘unethical’. The Bank also generally believes that it has sharply posi-
tioned itself within an increasingly homogeneous financial services industry and
estimates that around 15 to 18 per cent of annual profits is directly due to its respon-
sible stance and behaviour. And Sustainability, a consultancy that evaluates CSR