As a concept, sustainability has been around for a long time. Nowadays, it has – unfortunately – become one of those buzzwords with which the media bombard us ad nauseam. As a result, there is no real common understanding of the actual scope of meaning of the term sustainability, neither among companies nor among customers, shareholders or policymakers. In addition, goals such as growth, rising prosperity and companies as drivers of job creation were prioritised in the economy and in society, especially in the years after WWII. Some elements of sustainability are reflected in those goals. But now that the western world has reached high levels of prosperity, the focus is increasingly shifting to the question of whether companies should conduct their business in a way that is not only economically viable and socially acceptable, but also environmentally sustainable.
Sustainability, corporate social responsibility, total societal impact, corporate governance, ESG (environmental, social and governance aspects) – the field and its sub-domains go by many names and we have all heard some of them in one context or another. In most cases, however, these names only cover a fraction of the field as a whole. In its entirety, sustainability – or rather sustainable development – is quite a complex topic.
The concept of sustainable development has its origin in the environmental sphere, more specifically in the forestry sector, but now it covers a much wider range of topics and areas of influence. Sustainability can roughly be organised into three pillars or dimensions that focus on social, environmental and economic aspects. However, there are also further dimensions, such as political sustainability.
At Baloise, sustainability also means value management
You may wonder why I, the chief financial officer (CFO), am applying myself to this subject. In short: to show that Baloise is approaching sustainability in a way that takes account of all aspects which ultimately have an impact on our results. At the end of the day, a sustainable business performance is part of our value management. At Baloise, we’ve been taking a closer look at this topic for a while, with the aim of defining what sustainability means for us and our business model. This should help us to develop a common understanding of sustainability across the company. Consciously or not, we are and always have been operating in a sustainable manner in many areas. Our core business is a case in point: We offer life insurance products that help people to protect themselves from risks related to invalidity and death, and we also provide occupational pensions plans. Especially with regard to the second pillar, our customers expect us to invest their employees’ pension contributions intelligently and safely over a long time horizon. Short-term approaches are not helpful here. We need to think on a long-term basis – i.e. sustainably. There are many personal and business risks that individuals and companies can only take because they have insurance cover. By their very nature, insurance products thus facilitate sustainable economic and social development.
For decades, we have also been committed to being a reliable partner for our employees. But we have not always consistently communicated our activities in a transparent and well-structured manner. This is something we need to focus on in order to make progress. Being more transparent about our efforts is key if we want to engage in a fruitful dialogue with external stakeholders – a dialogue that is central to our sustainability activities. After all, sustainability is not something anyone can achieve on their own.
Sustainability goes beyond environmental protection
Sustainability is a topic that plays a part in almost all departments of Baloise. The area of logistics touches on many aspects of the environmental dimension. This department prepares our environmental audit and handles all matters relating to the company’s use of resources, energy supply and transportation. Our procurement team manages aspects of sustainable sourcing, which also form part of the environmental dimension. Our activities as a top employer, sponsor and art collector and the volunteer work performed by our employees as part of our corporate social responsibility initiatives address the social pillar of sustainability. Our key concern in the economic dimension is the long-term continuity of our business. Risk management, information security, IT compliance, customer satisfaction and corporate governance all play a part in this area.
Responsible investing is a topic that is handled by our asset management team and that relates to all three dimensions. Investments that comply with ESG criteria take account of environmental, social and governance issues. Product management can also be an area that covers more than one dimension, depending on the product.
Political sustainability includes aspects such as promoting Switzerland’s milizsystem, in which members of the society perform public duties alongside their work. Flexible working models enable employees to participate in political processes and get involved in public life. This is beneficial both to society and to us as an employer.
All of this goes to show that sustainability is a fairly complex topic. But at the end of the day, our various measures all serve the same purpose – to achieve sustainable development. To be able to contribute to the economic, environmental and social development of the countries in which our company operates, we need to ensure that our company will continue to exist for another 150 years.
In the words of Baloise: If we practice sustainability across all areas of the business and have the backing of management, it will work. It’s ‘Simply Responsible’.
For further information, please refer to the chapter ‘Sustainable Development’ in the 2018 annual report of the Baloise Group.