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Triple Bottom Line

In: Business and Management

Submitted By neale1989
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Triple Bottom line.
Corporate sustainability involves meeting the needs of today’s stakeholders in a manner that protects the environment and resources needed for future generation.
It is directed at improving a company’s triple bottom line, which covers its performance on economic environment and social metrics.
Economic.
Barclays demonstrated significant success in delivering much better financial results between 2002 to 2005. They improved the cost-to-income ratio by right sizing the business in terms of head-count, and stream-lined process and systems to extract economies of scale, including taking back-offices out of the branches and centralizing them.
By 2005 they were operating on capital of about 250 Million pounds and delivering about 125 million profits per annum.
Although the case study talks about the improvements delivered by the team between 2002 and 2005 it makes no mention of what caused the drop in financial performance between 2001 and 2002, which can be seen on exhibit 8 i.e. a drop in PBT from 116 million pounds to 83 million pounds; A drop of 28.4%. This all came from the income side of the Profit and loss summary but is not explained in the case at all.
From 2002 to 2004, per exhibit 8, income grew 19% from 235 million pounds to 301 million pounds while costs were held at an 11% increase from 152 million pounds to 169 million pounds. This led to the 27.7% increase at the PBT level. Note the PBT of 106 million pounds in 2004 is still below that of 2001, which was 116 million pounds.
So although the case is successful if looked at using 2002 as a start, the answer is different if 2001 is used as the starting point.
Going Forward.
With the acquisition of ABSA being such a large South African operation it would become by far the dominant contributor to the Barclays Africa economic story.
So the focus would have to be to extract the benefits from the acquisition namely: * The growth in corporate and international, that can be gained by ABSA by adding these strengths from the Barclays team, as these were a weakness at ABSA. * Using the strength of the South African presence to follow clients into Africa and service them from the other Africa countries. * Access what systems and process could be migrated from the Barclays network to ABSA giving better efficiency and scale benefits. * Given the size of ABSA and its market position, access what systems, processes and products it has that may be best practice that can be shared across the Barclays network for mutual benefit.
Given the scale of ABSA operations there is also benefit to be gained from use of the large Barclays processing hubs. Here ABSA would have to go through a similar business case assessment to that of a process outsources decision but in this case it would be outsourcing to a parent.
Environment.
Barclays seem to have paid no attention to this aspect of the triple bottom line.
Although it may seem that banks have little impact on the environment it is important for every business to do as much as they can in this regard.
Areas where Barclays could have made a positive difference in terms of the environmental metric include: * Ensuring that their premises are environmentally designed so that they are energy and water efficient. * Reducing the use of paper and ensuring maximum recycling. * Ensuring proper disposal of office waste to minimise environmental damage and maximise recycling. * Raise the level of awareness regarding environmental issues for staff, communication and clients. * Consider applying environmental “no go” criteria in terms of desirability of clients. Hence adding pressure on clients to behave better in terms of the environment.
Social.
Barclays performed well on this metric. They set it as a core pillar of their vision i.e. one of the “five C’s” * “Community – to be the leading contributor to the communities in which we operate”
Socially responsible behaviour however also featured in two of the other “ five C’s” namely customer and Colleagues.
Having set very explicit aspirations in the vision, which then found their way into the objects and plans at all, levels ensured the successful execution against the social metric. The success included: * Establishment of a good working environment for staff. Premises, uniforms, HIV/AIDS, programme including family members. * Taking care of customers by improving their experience of the bank. * 1% of pre-tax profit to community projects concentrated on HIV/AIDS, education and supportive services for people with visual impairments. * 68% of employees participating in voluntary community projects.

Going forward.
A refinement of the approach to the community activities given the growing size of the 1% of PBT and the differing needs by country could be to allow more ownership of both the identification of community and their oversight by local country management. This has the benefit of ensuring projects are more relevant to local country needs and that there is more commitment to their success from local management. There could also be a consideration to recognise staff that are participating in volunteer programmes by publicising them.

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