Financial exclusion is experienced by developing and developed economies alike — and it is an issue that banks have a responsibility to address. In Africa and Asia (but not in the Far East), about 80 per cent to 90 per cent of the population do not have a bank account. Without the ability to access loans and financial information, people cannot help themselves to escape poverty. The banking sector has an unparalleled capacity to lift people out of this poverty and enhance the quality of living across the world.

However, banks must make money. With rare exceptions, such as the Grameen Bank, of Bangladesh, their focus is not usually the alleviation of poverty, leading to some scepticism about how financial institutions operate in developing markets. Therefore, any institution, financial or otherwise, must meet the needs of both its shareholders and the wider society for its work in developing economies to be recognised as truly responsible and mutually beneficial.

Both Barclays and The Co-operative Financial Services operate in developing countries, where, for example, they support local market traders and Susu initiatives in Ghana and create lines of credit in association with other international institutions to provide microfinance to the working poor across the globe.

These initiatives are relevant, realistic and robust. They work within the local infrastructure to provide banking facilities that take into account the needs of geographically diverse individuals and small businesses. This approach to financial inclusion in developing markets creates opportunities for individuals to establish businesses and work their way out of poverty. The financial institution benefits by attracting new consumers into mainstream banking.

Businesses that remain committed to sustainable, responsible practices, both at home and abroad, have reaped the rewards. Ipsos MORI recently examined the financial performance of 33 FTSE companies that have measured and managed their corporate responsibility through Business in the Community's Corporate Responsibility Index. It found that they outperformed the FTSE 350 on total shareholder return by between 3.3 per cent and 7.7 per cent throughout 2002-07. Responsible business is plainly good business.

Now, more than ever, businesses, including banks and financial institutions, must embrace sustainable practices. A relevant, realistic, robust approach to corporate responsibility will stick and continue to add value through the downturn. It is no longer an option for businesses to neglect making responsible business an integral part of the business model.

Organisations such as ours will be essential in driving the agenda forward with a renewed focus and increased engagement on issues such as incentives, rewards and governance. These are difficult issues, but it is critical that they are explored and addressed if we are to strengthen and, in some parts of the banking sector, rebuild trusting relationships.

Top banks for CSR

Platinum standard: Barclays Bradford & Bingley HBOS Lloyds TSB

Gold standard: Nationwide Building Society

Silver standard: Britannia Building Society

Source: Business in the Community’s Annual Top 100 Companies for Corporate Responsibility, published May 2008

— Stephen Howard is chief executive of Business in the Community

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