The case for CSR/ Sustainability Reporting Done Responsibly


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Insights on how you can protect the environment, maintain and increase the value of your company, through a structured process.

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Case study: How Arab Bank promotes sustainable procurement

Headquartered in Amman, Jordan, Arab Bank has one of the largest global Arab banking networks, with over 600 branches spanning five continents. Realising procurement practices have both economic and environmental impacts on communities, Arab Bank is firmly committed to supporting local and environmentally responsible suppliers.  Tweet This!

This case study is based on the 2018 Sustainability Report by Arab Bank published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.

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Managing its resources effectively helps Arab Bank optimise its systems, decrease its environmental footprint and reduce costs. Promoting sustainable procurement practices, along with working on reducing the environmental footprint of its products and services, is, thus, a top priority for Arab Bank. In order to promote sustainable procurement Arab Bank took action to:

  • screen suppliers
  • implement a Supplier Code of Conduct
  • set contractual provisions
  • spread an efficient culture

What are the material issues the company has identified?

In its 2018 Sustainability Report Arab Bank identified a range of material issues, such as Legal and regulatory compliance, governance, accountability, and transparency, customer experience and satisfaction, information security and data privacy, talent attraction and

retention. Among these, promoting sustainable procurement stands out as a key material issue for Arab Bank.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Arab Bank engages with:

Stakeholder Group                Method of engagement
Customers ·      Service & Communication Channels

·      Feedback Methods

·      Regular Annual Reports

Shareholders ·      Annual General Assembly

·      Financial and non-financial Reports

Government ·      Regulatory Reporting and Audits

·      Regulatory Review

·      Regulations

Community ·      Social and Digital Media

·      Regular Annual Reports

·      Media

·      CSR Activities & Initiatives

Suppliers

 

·      Meetings

·      Contracts

The environment

 

·      Engaging with Clients & Borrowers on ESG Issues

·      Engaging with Environmental NGOs

·      Sustainability Reports

Employees ·      Internal Communication Channels

·      Volunteering Activities

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics, Arab Bank engaged with its stakeholders through a targeted survey.

What actions were taken by Arab Bank to promote sustainable procurement?

In its 2018 Sustainability Report Arab Bank reports that it took the following actions for promoting sustainable procurement:

  • Screening suppliers
  • The engagement and assessment of a substantial number of suppliers require considerable resources. However, Arab Bank has introduced checkpoints through its procurement process so as to ensure low impact on the environment, in addition to cost reductions. The Procurement Division often engages with suppliers to achieve these objectives by raising awareness about sustainable procurement and by supporting suppliers in their social and environmental contributions.
  • Implementing a Supplier Code of Conduct
  • Arab Bank’s Supplier Code of Conduct sets out the expectations of suppliers to make sure their behaviour aligns with Arab Bank’s It formalises and standardises Arab Bank’s approach to sustainable procurement. As part of the code, suppliers must, among other things, adhere to labour and employment standards, environmental and social legislations. The end goal is to make sure all suppliers meet Arab Bank’s expectations and those of its stakeholders to act as good responsible citizens.
  • Setting contractual provisions
  • To increase suppliers’ awareness and compliance to social values, specifically those related to human rights, Arab Bank’s Global Procurement Division sets contractual provisions in the Bank’s agreements with suppliers highlighting the fundamental principles of the Universal Declaration of Human Rights (UDHR) and the International Labor Organization (ILO).
  • Spreading an efficient culture
  • To enhance efficiency, reduce human errors and achieve a high level of security and accuracy, Arab Bank’s Global Procurement Division is working to automate the procurement processes, covering the entire Procure-to-Pay process through the implementation of an electronic procurement system expected to go live in the second quarter of 2019. This process automation will also yield paper reduction gains, which will reduce Arab Bank’s total environmental footprint and associated costs.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 308-1 New suppliers that were screened using environmental criteria

2) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken

3) Disclosure 414-1 New suppliers that were screened using social criteria

4) Disclosure 414-2 Negative social impacts in the supply chain and actions taken

 

Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.

Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.

Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:

  • Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
  • Business theme: Workplace violence and harassment
  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Labor practices in the supply chain
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Workplace violence and harassment 

Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:

  • Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
  • Business theme: Workplace violence and harassment
  • Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
  • Business theme: Labor practices in the supply chain
  • Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
  • Business theme: Workplace violence and harassment

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



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By registering for the next 2-day FBRH GRI-Standards Certified and IEMA approved Course you will be taking the first step in gaining the many benefits of sustainability reporting.

 

References:

1) This case study is based on published information by Arab Bank, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Arab Bank: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

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