Case study: How Krungsri creates economic value for its stakeholders
Established on April 1, 1945 and listed on the Stock Exchange of Thailand on September 26, 1977, Krungsri is ranked Thailand’s fifth largest commercial bank in terms of assets, loans, and deposits. Krungsri adheres to the highest principles of ethical conduct and is committed to responding to the expectations of stakeholders, communities, and society, creating sustainable value for all.
This case study is based on the 2021 Sustainability Report by Krungsri, prepared in accordance with the GRI Standards, 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.
Abstract
Generating economic value for all its stakeholders, proactively engaging with them to achieve society’s goals, is a key priority for Krungsri. Tweet This! In order to create economic value for its stakeholders Krungsri took action to:
- create economic value for employees
- create economic value for providers of capital
- create economic value for the government
- create economic value for society
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With this case study you will see:
- Which are the most important impacts (material issues) Krungsri has identified;
- How Krungsri proceeded with stakeholder engagement, and
- What actions were taken by Krungsri to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2021 Sustainability Report Krungsri identified a range of material issues, such as responsible lending and ESG consideration, risk and crisis management, cybersecurity, good governance and anti-corruption, customer experience and market conduct. Among these, creating economic value for its stakeholders stands out as a key material issue for Krungsri.
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:
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 Krungsri engages with:
| Stakeholder Group | Method of engagement |
| Executives and staff members
| · New employee orientation · Town Hall Meeting held once a year · Krungsri Leadership Meeting held once a year · Meetings for discussion among executives and staff members in the same and different divisions on a regular basis · Monthly message from the President and Chief Executive Officer · Internal communications via diverse channels, e.g., the intranet ‘One Krungsri Portal’, e-magazine ‘Krungsri Life’, e-newsletter ‘Around Krungsri’, e-mails of ‘ESG Simple to Share’ or ‘ESG Flash’, announcements via a public address (PA) system, etc. · Year-round communications among the Human Resources Management Division, executives and employees through diverse activities and/or channels, such as the ‘HR Inspires’ e-mail, the ‘Humans of Krungsri’ Line account, ‘KarE’ Application, etc. · Activities to promote organisational culture and core values · Engagement activities of the Bank, executives and employees in diverse opportunities, e.g., New Year parties, the Songkran Festival, retirement parties, and team building or engagement activities, all of which have been adjusted to comply with the COVID-19 preventive measures for ultimate safety · Employee opinion surveys · Regular meetings with representatives of Bank of Ayudhya’s labour union · View sharing between external experts and the Bank’s executives and employees |
| Customers (Retail, SME, and Corporate)
| · Provision of officials to facilitate customer convenience and to socialise with customers, including customer visits as appropriate and needed, such as relationship managers (RMs) · Annual customer satisfaction survey conducted at least once a year · Communication about product and service information via diverse channels including the website ‘Krungsri.com’, online and social media accounts of ‘Krungsri Simple’, leaflets, brochures, marketing activities, etc. · Year-round activities to build strong relationships with customers, e.g. seminars, business matching activities, which have been adjusted to comply with the COVID-19 preventive measures for ultimate safety · Customer visit activities on an as-needed basis, including communication activities that convey information of sustainability performance, ESG trends, e.g., ESG knowledge sharing activities for JPC/MNC customers, etc. · Krungsri Call Center 1572 · Communication about assistance measures for customers impacted by the COVID-19 crisis via the Bank’s branches, website, and social media channels |
| Shareholders
| · Annual and/or extraordinary general meeting of shareholders (at least once a year), of which process has been adjusted in compliance with COVID-19 preventive measures for utmost safety · Dissemination of the 56-1 One Report and the Sustainability Report (once a year) · Information dissemination through the website www. krungsri.com · Information disclosure through the SET Portal Straight Through system of the Stock Exchange of Thailand |
| Suppliers or vendors
| · Regular news updates via e-mail, e.g., Krungsri Group’s The Spirit and The Letter, environmental and human rights disclosure statement · Meetings between the Bank and suppliers or vendors · Disclosure of suppliers’ and vendors’ codes of conduct via the website www.Krungsri.com · Communication of the Thai Private Sector collective Action Against Corruption (CAC) via e-mail · Notification of the gift and entertainment policy at least once a year particularly during the New Year festival via e-mails · Supplier or vendor site visits |
| Creditors
| · Company visits · Meetings for view sharing and taking advice on diverse occasions |
| Regulators supervising commercial banks and listed companies
| · Regular meetings and cooperation with, and reporting to regulators · Meetings in important occasions for view sharing and taking advice · Transparent performance disclosure via the Bank’s channels |
| Investors and analysts
| · Regular meetings with investors and analysts · Teleconferences · Holding year-round meetings and roadshows at home and abroad · Holding securities analyst meetings · Holding meetings with credit rating agencies which rate Krungsri and its subsidiaries · Organising company visits at Krungsri Group’s subsidiaries · Holding press conferences on performance, business expansion, and key developments · Preparing press releases presenting Krungsri Group’s financial status · Reporting quarterly operating and financial results through the Stock Exchange of Thailand and the website www. Krungsri.com · Notifying news about the Bank’s key developments via e-mail on a year-round basis |
| Other commercial banks and financial institutions
| · Regular meetings with member banks, at least once a month, through the Thai Bankers’ Association (TBA), as well as meetings with the Payment System Office (PSO), the Thailand Banking Sector Computer Emergency Response Team (TB-CERT), and the Thai Banking Academy (TBAC) under TBA’s supervision · Meetings with member banks through the TBA’s clubs including the CSR Club, and Compliance Club · Year-round communications among member banks through the TBA’s clubs · Regular meetings and communications among member banks of the Association of International Banks (AIB) |
| Communities and society
| · Provision of financial products and services that respond to community and society needs · Organising corporate social responsibility (CSR) activities with CSR staff joining local communities in participating in the activities · Creating value for communities and society using the organisation’s expertise to organise financial literacy projects that help develop and promote the economic strength of communities and social enterprises, such as signing memorandum of understanding with the Social Enterprise Thailand (SETH) · Discussion and cooperation with local units to promote activities that help enhance communities’ quality of life |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Krungsri engaged with its stakeholders through meetings, seminars, interviews, and materiality surveys.
What actions were taken by Krungsri to create economic value for its stakeholders?
In its 2021 Sustainability Report Krungsri reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2021, Krungsri paid 26,717 million baht in employee expenses (salaries, wages, overtime pay, bonuses, cost of living subsidies, employee benefits, the Bank’s contribution to provident funds, welfares and other benefits e.g., health insurance, annual health check-up).
- Creating economic value for providers of capital
- In 2021, Krungsri paid 27,341 million baht to providers of capital (dividends paid to shareholders and interest expenses).
- Creating economic value for the government
- In 2021, Krungsri paid 8,010 million baht in duty tax and income tax, excluding deferred tax income/ expenses.
- Creating economic value for society
- In 2021, Krungsri paid70 million baht in donations to charitable organisations, donations for education support, service activities and disaster reliefs.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Krungsri, 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 following link:
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