Interpreting banks’ sustainability initiatives as reputational risk management and mechanisms for coping, re-embedding and rebuilding soceital trust
AffiliationUniversity of Bedfordshire
reputational risk management
Subject Categories::N310 Banking
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AbstractThe financial crisis and increasing concerns around climate change and global warming have combined to shatter societal trust in the banking sector worldwide. Consequently, there is an urgent need for banks to rebuild trust among their stakeholders and enhance their reputations. This paper contributes 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. We 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. The interviewees’ utterances are interpreted through a sociological theoretical lens derived from the work 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. Further, 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.
CitationSaeudy M, Atkins J Barone E (2021) 'Interpreting banks’ sustainability initiatives as reputational risk management and mechanisms for coping, re-embedding and rebuilding soceital trust ', Qualitative Research in Financial Markets, 14 (1), pp.169-188.
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