Money-Maker or World Saviour?
– Compromising Logics to Manage
Sustainability in Banking
Master’s Thesis 30 credits
Department of Business Studies
Uppsala University
Spring Semester of 2019
Date of Submission: 2019-05-29
Annelie André
Molly Larson
Acknowledgements
First and foremost, we would like to thank Nordea and all the respondents for taking the time to participate in our study. Your contribution is truly appreciated and your insights made it possible to fulfill the purpose of this thesis. We would also like to thank our seminar group for giving us constructive feedback throughout the process. Your comments and suggestions have certainly helped us along the way. Last but not least, we would like to thank our supervisor Jaan Grünberg for challenging and supporting us during this journey. Your precious help has contributed with valuable guidance and improved our thesis greatly. For those who will be reading this thesis, we hope that you will find the thesis and the topic as intriguing as we do.
Uppsala 29th of May 2019
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Abstract
With the increasing demands of engaging in sustainability, the financial industry’s dominating market logic is currently being challenged. Banks are therefore experiencing demands to manage and legitimize sustainability, identified as containing both a market- and social logic, into a profit driven context. The aim of this study was thus to explore, at a micro level, how multiple logics of sustainability can be managed and legitimized in an organization where the dominant logic is being challenged. This was done by conducting a case study where the primary data was collected through semi-structured interviews with employees from Group Sustainable Finance (GSF) who are responsible for driving the sustainability agenda at Nordea. The results demonstrate that sustainability has been managed through a compromising strategy where elements of both the market- and social logic has been altered to appropriately suit the context characterized by profit maximization. During the process, an interesting finding evolved concerning how the micro perspective exposed the existence of conflicts within a single logic, defined as intra-logic conflicts. The results also contributed to identify stakeholder triggers as well as how normative-, instrumental-, and value rhetorical strategies are applied to legitimize Nordea’s sustainability practices.
Keywords: Institutional Logics, Multiple Logics, Sustainability, Compromising Strategy, Micro Perspective, Rhetorical Strategies, Legitimacy, Banking
Table of Content
1. Introduction ... 1
1.1 Background ... 1
1.2 Problem Statement ... 2
1.3 Purpose and Research Question ... 3
1.4 Thesis Disposition ... 4
2. Theoretical Framework ... 5
2.1 Development of Institutional Theory ... 5
2.2 Defining Institutional Logics ... 6
2.3 Multiple Logics in the Institutional Environment ... 8
2.3.1 Compromising and Combining Logics ... 8
2.4 Applying Multiple Logics on Sustainability ... 9
2.5 Sustainability within the Banking Sector ... 11
2.6 Institutionalization of Sustainability in Organizations ... 12
2.6.1 Legitimizing Sustainability Practices through Communication ... 13
2.7 Theoretical Summary and Model of Analysis... 14
3. Method ... 17
3.1 Research Approach ... 17
3.2 Research Design ... 17
3.2.1 Selection of Case and Respondents ... 18
3.3 Data Collection ... 19
3.3.1 Interviews ... 19
3.3.1.1 Constructing the Interview Guide ... 21
3.3.2 Secondary Data ... 22
3.4 Data Analysis ... 23
3.4.1 Thematic Analysis ... 23
3.5 Ethical Considerations ... 25
4. Sustainable Finance at Nordea ... 26
4.1 Presenting Nordea and Group Sustainable Finance ... 26
4.2 Nordea’s Perception of Sustainability ... 27
4.2.1 Sustainable Finance as a Business Opportunity ... 28
4.3 Maximizing Profit and Saving the World ... 30
4.3.2 Combining Profitability with Doing Societal Good ... 32
4.3.3 Prioritizing Different Demands within Sustainable Responsibility ... 33
4.4 Nordea’s Journey Towards a Sustainable Future ... 33
4.4.1 Sustainability in Practice ... 34
4.4.1.1 Sustainable Products ... 36
4.5 Creating Acceptance for Nordea’s Sustainability Practices ... 37
4.5.1 Formalizing Sustainability Practices ... 38
4.5.2 Communicating Benefits of Sustainability... 39
4.5.3 Communicating Good Citizenship ... 40
5. Analysis ... 42
5.1 Perception of Sustainability ... 42
5.2 Managing Multiple Logics ... 44
5.2.1 Compromising Logics of Sustainability... 44
5.2.2 Combining Logics of Sustainability ... 45
5.2.3 Managing Intra-Logic Conflicts ... 46
5.3 Sustainability Practices ... 47
5.3.1 Institutionalization of Sustainability Practices ... 47
5.4 Legitimizing Sustainability ... 48
5.4.1 Normative Rhetoric ... 49
5.4.2 Instrumental Rhetoric ... 50
5.4.3 Value Rhetoric ... 51
6. Conclusions ... 53
6.1 Limitations and Future Research ... 54
7. References ... 55
Appendix ... 61
1. Introduction
1.1 Background
Sustainability has become a popular topic in today’s society. The fast consumption of resources is making consumers more concerned of their own environmental impact as well as the impact by other actors (Butler, 2018). Governments and media have also enhanced their awareness on sustainability issues which has contributed to organizations experiencing higher demands regarding their engagement in environmental and societal concerns (Borglund et al., 2008; Hunoldt et al., 2018). Among organizations, the idea of sustainability has previously been associated to organizational initiatives concerning ‘Corporate Social Responsibility’, CSR (Carroll, 1999; Sheehy, 2015). Lately, however, the idea has developed into a more holistic perspective involving all actors and their care for creating a sustainable future (Butler, 2018). The increased global awareness of sustainability issues has therefore made it essential for organizations to communicate their sustainability engagement in order to be perceived legitimate (Furusten, 2013; Marais, 2012). By not conforming to the external pressures of addressing sustainability issues, an organization’s reputation might become damaged which can jeopardize its chances for future success and survival (Marais, 2012).
In the banking sector, the increased demands on sustainability became particularly evident after the financial crisis in 2008 when a strong wave of criticism was raised towards the banking sector’s narrow focus on short-term results and lack of corporate responsibility (Borglund et al., 2008; Jacob, 2012; Lauesen, 2013). Before the crisis, the financial industry’s engagement in sustainability issues was in the shadow of other industries which were considered to have a more direct environmental impact (Branco & Rodrigues, 2006; Cai et al., 2012; Thien, 2015). The banking sector has thus previously received limited attention although banks possess an influential role in societal and environmental concerns through investing and lending capital to various industries and infrastructure projects (Kell, 2018; O’Sullivan & O’Dwyer, 2009). As a result of the increased attention towards sustainability, financial leaders have begun to recognize that success is not only measured by profits and costs, but rather by also taking environmental, social and governmental (ESG) aspects into account (Raza, 2018). Sustainability engagement has thus become increasingly important in the financial industry and contributed to the establishment of ‘sustainable finance’.
1.2 Problem Statement
When studying organizations and how they respond to external demands, institutional theory can provide useful insights. Institutional theory implies that organizations operate in institutional environments where they need to respond to institutionalized pressures in order to achieve legitimacy (Butler, 2010; DiMaggio & Powell, 1983; Dowling & Pfeffer, 1975; Meyer & Rowan, 1977; Suchman, 1995). However, since society is composed of multiple institutional logics containing different principles for what is considered legitimate behaviour, organizations can experience and interpret different influences to their practices (Thornton & Ocasio, 2008). The institutional environment is thus characterized as being dynamic and complex, wherefore organizations may be exposed to multiple institutional logics of legitimate behavior (Thornton & Ocasio, 2008; Pache & Santos, 2013).
By applying institutional logics to sustainability, it is possible to acknowledge that there are different reasons behind organizations’ engagement in sustainability practices. Scholars have for example described how organizations can approach sustainability as fulfilling their societal responsibility (Furusten, 2013; Grankvist, 2009; McElhaney, 2009; Wang, 2014). However, there are also studies which rather emphasize that organizations engage in sustainability practices due to a strategic approach towards corporate responsibility. Meaning that business leaders have acknowledged that by integrating sustainability into their business strategy, organizations perceive themselves becoming more efficient and profitable in the long-run (McElhaney, 2009; Porter & Kramer, 2011).
The different perceptions behind organizations’ sustainability practices makes it possible to define two conflicting logics of sustainability. A market logic which considers the involvement in sustainability as driven by profit maximization, and a social logic which considers that organizations ought to engage in sustainability practices in order to contribute to the greater good. These conflicting logics of sustainability can also be related to Windell (2007) and Bakker et al. (2016) categorization of actors engaging in sustainability; containing the money-makers who perceive sustainability as a business opportunity and hence correspond with the market logic, and the world saviours who perceive sustainability as doing social good and thus conforms with the social logic. Consequently, multiple logics can make it difficult for
to successfully manage multiple and possibly contradicting logics as they function as references for appropriate and legitimate behaviour (Pache & Santos, 2013; Smets et al., 2012; Thornton & Ocasio, 2008). For example, Pache and Santos (2013) have suggested that by applying a compromising- or combining strategy, organizations may overcome challenges and conflicts that emerge in the managing of multiple logics. Furthermore, as it is essential for organizations to be considered legitimate by the society in which it operates, scholars have also established that professionals can use different rhetorical strategies to develop legitimacy for their sustainability practices (Marais, 2012; Windell, 2007). Normative-, instrumental-, and value rhetoric can therefore be applied depending on the relevant context and on what type of legitimacy an organization wishes to develop (Marais, 2012).
Although studies regarding institutional logics have received increased attention within the academia, the primary focus has been on the field level and thus overlooked the important micro level origins which arise by individuals’ actions at work (Powell & Colyvas, 2008; Reay & Hinings, 2009; Smets et al., 2012). In addition, the managing of multiple logics is poorly understood and studies regarding how organizations respond to the complexity of multiple logics are thus called for (Greenwood et al., 2010; Lindberg, 2014; Pache & Santos, 2010). Furthermore, as the financial industry has a long history of focusing on profit maximization, the context has been dominated by a market logic which has guided its organizing principles as well as the understanding of what constitutes legitimate values and behaviour (Almandoz, 2014; Davis, 2009; Thornton & Ocasio, 2008). Therefore, with the increasing demands of engaging in sustainability, the financial industry is experiencing the challenge to successfully manage and incorporate sustainability, containing both a market- and social logic, into a market driven context. As the dominant market logic is being challenged, the banking sector thus appears as a particular suitable context to study how multiple logics of sustainability can be managed and legitimized at a micro level.
1.3 Purpose and Research Question
The aim of this paper is to examine how multiple logics of sustainability can be managed in the financial industry which historically has been recognized as being dominated by a market logic. Moreover, since research within institutional logics has called for further studies exploring the micro perspective, the study intends to make a theoretical contribution by exploring how an organization can cope with multiple logics in their work. By conducting a case study, the study
also contributes with practical knowledge of how professionals responsible for driving an organization’s sustainability practices can manage multiple logics and through rhetorical strategies legitimize their sustainability practices in a context dominated by a market logic. In view of the above considerations, the study intends to answer the following research question:
- How can multiple logics of sustainability be managed and legitimized in an organization where the dominant logic is being challenged?
1.4 Thesis Disposition
The thesis will be structured as follows. Chapter 2 will present a theoretical framework highlighting the development of institutional theory, institutional logics, and how multiple logics relate to sustainability. The theoretical section will also cover the establishment of sustainability within the banking sector and rhetorical strategies which can be applied to legitimize sustainability practices. In Chapter 3, the methodological considerations will be further described, including the selection of case and respondents as well as how data was collected. Chapter 4 will present the study’s empirical findings which in Chapter 5 will be analyzed following the thesis’ model of analysis. Lastly, in Chapter 6, the main conclusions will be presented and discussed together with limitations and suggestions for future research.
2. Theoretical Framework
This section begins with an introduction to institutional theory and the development of institutional logics. Following, a discussion concerning the management of multiple logics and the notion of sustainability in the banking sector is described. Thereafter, the institutionalization of sustainability and legitimization of sustainability practices through communication is presented. Finally, the chapter ends with a theoretical summary and an illustration of the thesis’ model of analysis.
2.1 Development of Institutional Theory
Institutional theory has for several decades been representing a dominant approach when analyzing the interaction between an organization and its environment (Alvesson & Spicer, 2018; Guth, 2016). The study of institutions began with Selznick’s (1948) empirical research on organizations and how they become affected by influences in their institutional environment. In the seventies, Meyer and Rowan (1977) entered the institutional arena and emphasized the role of modernization when rationalizing rules that are taken for granted by the society and captured the process of isomorphism. The notion of isomorphism, which is organizations tendency to become similar to each other, was further developed by DiMaggio and Powell (1983) who placed it in a setting of organizational fields. DiMaggio and Powell’s (1983) approach of isomorphism developed into ‘the new institutionalism’ which involved an emphasis on legitimacy rather than efficiency. The authors thus argued that the success and survival of an organization was dependent on the society’s perception of organizational legitimacy. More specifically, by obtaining legitimacy, the organizational behavior is perceived desirable and appropriate by the society (Dowling & Pfeffer, 1975; Suchman, 1995). Consequently, although some scholars have criticized institutional theory for being vague and include over-reach concepts (Alvesson & Spicer, 2018), the theory is considered a valuable theoretical lens for analyzing how organizations are influenced by, and manage external expectations from their institutional environment (Gauthier, 2013; Scott & Meyer, 1994).
During the nineties, a new approach to institutional analysis was created and it posited institutional logics as defining the content and meaning of institutions (Friedland & Alford, 1991; Thornton & Ocasio, 1999). In contrast to previous studies, institutional logics discover the effects that logics have on individuals and organizations, and thus disregard the notion of isomorphism. Researchers adopting this approach consider the concept of institutional logics
to shape rational and mindful behaviour, while also allowing organizations to shape and change institutional logics as well (Thornton & Ocasio, 2008). In parallel with the establishment of institutional logics, another framework which also conceptualizes and explores institutional dynamics has been developed. Lately, this has made the conversation of institutional theory to become dominated by two schools of thought, namely institutional logics and institutional work (Zilber, 2015). Institutional work, which was coined by Lawrence and Suddaby (2006), has a bottom-up focus and emphasizes how individual action affects an institution or set of institutions (Lawrence et al., 2011). Therefore, as this study aims to analyze what and how multiple field level influences may impact organizational practices, institutional work is not the most equipped framework to use due to its focus on creating, maintaining and disrupting institutions. Institutional logics, however, remain central within institutional theory and is applicable in this thesis as it highlights the importance of social context when shaping the behaviour of social actors (Lindberg, 2014). Previous research has however primarily studied institutional logics as a field level concept and relatively few studies has taken organizations as the level of analysis (Lindberg, 2014; Pache & Santos, 2013; Smets et al., 2012; Zilber, 2015). Important micro level dynamics have therefore been disregarded which in turn has contributed to a lack of understanding of how logics are perceived and managed (Lindberg, 2014).
2.2 Defining Institutional Logics
When Friedland and Alford (1991:248) developed the concept of institutional logics, they defined it as “a set of material practices and symbolic constructions - which constitutes its organizing principles and which is available to organizations and individuals to elaborate”. Institutional logics can therefore be explained as the way social reality is constructed and is central in shaping the interpretations that people have on their own work, as well as the actions by others. Following this view, society is considered to be composed of multiple institutional logics which are available to individuals and organizations as bases for their actions (Lindberg, 2014; Thornton & Ocasio, 2008). As a result, individuals within an organization will have to consider and manage these different logics in their daily activities. Applying the approach of institutional logics is therefore fruitful in this thesis when aiming to enhance the understanding of what guides action, as well as how organizations can manage being influenced by several different logics.
To simplify and make institutional logics more applicable in research, Thornton et al. (2012) developed seven categories for ideal types of institutional logics. By systematically developing categories and highlighting the characteristics behind each type, the typology contributes with a generalizable understanding of institutional context and provides a framework to portray its otherwise rather complex nature. The seven majortypes of logic differ in a number of aspects, such as their sources of legitimacy, the basis of norms, and the control mechanism employed (Thornton et al., 2012; Scott, 2014). Table 1 represents the typology of institutional logics and further demonstrates the differences between them. Scott (2014) emphasizes that by considering how organizations commit to multiple institutional logics, studies can come closer to the understanding of the dynamics within organizations and organizational fields. However, it is important to note that this study does not consider the existence of institutional logics as given, but rather as constructed by researchers and an applicable approach to enrich this thesis’ understanding for how organizations can relate to the phenomenon of sustainability.
Table 1. Ideal Types of Institutional Logics
Categories Family Community Religion State Market Profession Corporation
Root Metaphor Family as firm Common boundary Temple as bank State as redistribution mechanism Transaction Profession as relational network Corporation as hierarchy Sources of Legitimacy Unconditional loyalty Unity of will Belief in trust & reciprocity Importance of faith & sacredness in economy & society Democratic participation
Share price Personal expertise Market position of firm Sources of Authority Patriarchal
domination Commitment to community values & ideology
Priesthood
charisma Bureaucratic domination Shareholder activism Professional association Board of directors Top management Sources of Identity Family reputation Emotional connection Ego-satisfaction & reputation Association with deities Social & economic class Faceless Association with quality of craft Personal reputation Bureaucratic roles Basis of Norms Membership in household Group membership Membership in congregation Citizenship in nation Self-interest Membership in guild & association Employment in firm Basis of Attention Status in household Personal investment in group Relation to supernatural Status of interest groups Status in market Status in profession Status in hierarchy Basis of strategy Increase family honor Increase status & honor of members & practices Increase religious symbolism of natural events Increase community good Increase efficiency profit Increase personal reputation Increase size diversification of firm Informal Control Mechanisms Family
politics Visibility of actions Worship of calling Backroom of politics Industry analysts Celebrity professionals Organizational culture
Economic System Family capitalism Cooperative capitalism Occidental capitalism Welfare capitalism Market capitalism Personal capitalism Managerial capitalism
2.3 Multiple Logics in the Institutional Environment
Organizations operating in complex and dynamic institutional environments can come across institutional pluralism (Pache & Santos, 2013; Reay & Hinings, 2009; Thornton et al., 2012). Kraatz and Block (2008:243) explain institutional pluralism by making the following metaphor, “if institutions are broadly understood as ‘the rules of the game’ that direct and circumscribe organizational behaviour, then the organization confronting institutional pluralism plays in two or more games at the same time”. Organizations that are managing institutional pluralism are therefore subject for multiple demands coming from more than one logic (ibid).
Although it has been acknowledged that several institutional logics can co-exist within an institution, the predominant view has been that there is one dominant logic that guides organizational action (Lindberg, 2014; Scott, 2014). Lately, however, there has been an increase of studies showing how fields are guided by multiple logics, which has contributed to a quest for research concerning how organizations experience and practically respond to the complexity arising from multiple institutional logics (Greenwood et al., 2010; Pache & Santos, 2013). In current studies of multiple logics, researchers have found both competitive and cooperative aspects of logics (Goodrick & Reay, 2011; Lounsbury, 2008; Swan et al., 2010). The multiplicity of logics, as well as the degree to which such logics are incompatible, ultimately influences an organization’s possibility to practically manage multiple logics (Lindberg, 2014; Scott, 2014).
2.3.1 Compromising and Combining Logics
In the beginning of institutional research, authors suggested that organizations could manage conflicting logics through decoupling (Meyer & Rowan, 1977). Decoupling involves the process of separating formal structure from actual organizational practices as a response to institutional pressures and for legitimacy purposes (Boxenbaum & Jonsson, 2008; Meyer & Rowan, 1977). However, as more studies have been conducted, the structure of decoupling has received less attention and new approaches involving compromising or combining multiple logics have been establishedto reconcile conflicting demands (Kraatz & Block, 2008; Oliver, 1991). By compromising conflicting demands, organizations can perform practices that are influenced by multiple logics which elements have been altered in order to create a balance
elements of the conflicting logics together, or by influencing institutional referents to alter their demands (ibid). The compromising approach can thus ease an organization’s ability to be perceived legitimate by different referent groups by incorporating elements of each logic. Nevertheless, holding an approach to constantly compromise between competing logics can also cause weaknesses as it does not allow organizations to obtain complete support from its referent groups since some of their expectations are disregarded. The approach may also be inapplicable when the multiple logics imply goals or practices that are not compatible with each other, and thus results in an inability to meet the institutional referents’ expectations (Pache & Santos, 2010).
By applying an approach of combining conflicting logics, rather than to compromise them, an organization can try to take advantage of how multiple logics can create opportunities for a broader range of appropriate behaviour (Greenwood et al., 2010; Reay & Hinings, 2009). This approach thus contributes to organizations performing a combination of activities that are drawn from each logic in an attempt to secure support from different referent groups. Consequently, in contrast to the compromising approach where certain elements of the logics are incorporated, this approach entails combining the different logics without modifying them (Pache & Santos, 2013). There are however some limitations to this approach as well. Similar to the compromising approach, the combination of several logics involves the challenge of fulfilling competing demands while also being perceived legitimate by the audience (ibid). Nevertheless, successful attempts of combining logics at an organizational level have the capacity to influence the organizational field which might contribute to the creation of altered institutionalized practices (Smets et al., 2012).
2.4 Applying Multiple Logics on Sustainability
As emphasized in the introduction to this thesis, the phenomenon of sustainability can be interpreted and managed differently. Scholars have for example described the reason behind engaging in sustainability as contributing to social good or performing it based on business reasons (Grankvist, 2009; McElhaney, 2009; Wang, 2014). Relating the different approaches on sustainability to the scheme of institutional logics presented in Table 1 by Thornton et al. (2012), it is possible to apply the view of sustainability as driven by either a state logic of citizenship and welfare, or from a market logic driven by maximization of shareholder profit. This interpretation of sustainability is also applicable to Windell (2007) and Bakker et al. (2016)
categorization of different actors engaging in sustainability, involving the money-makers and the world saviours. The money-makers and world saviours have divergent perspectives of the meaning and implications of sustainability. Actors that can be defined as money-makers are practicing sustainability driven by its perception of enhancing business opportunities. The practices are therefore conducted as a response to market demand as well as the opinion that sustainability contributes to increase profitability; something which can be related to the characteristics of the market logic. In contrast, the world saviours can be related to the social logic and involves practicing sustainability to contribute to social good and change the world for the better. The profitability of engaging in sustainability practices is hence not considered the most significant reason (ibid).
Drawing on the divisions of logics emphasized by Thornton et al. (2012), as well as Windell (2007) and Bakker et al. (2016) categorization of actors engaging in sustainability practices, this thesis study sustainability from a market- and social logic perspective. The market logic is similar to the one described by Thornton et al. (2012) although it is adjusted to the literature of sustainability. Furthermore, by analyzing influences from a social logic rather than a state logic perspective, the thesis adds on to Thornton et al. (2012) logics by incorporating a global perspective. The reason behind the usage of a social logic is hence based on the perception that sustainability issues are not limited to states nor country borders. Although the market- and social logic are simplified approaches of sustainability, the logics entail elements that are commonly discussed in regards to sustainability and will therefore constitute the foundation for this thesis when analyzing how an organization perceives, manages and legitimizes sustainability in the financial industry. Figure 1 represents the market- and social logic and further demonstrates the differences between them.
2.5 Sustainability within the Banking Sector
As the financial industry has a long history of focusing on optimizing financial return, the context has been dominated by a market logic which has guided the understanding of what constitutes legitimate values and behaviour (Almandoz, 2014; Davis, 2009; Thornton & Ocasio, 2008). In terms of sustainability practices, banks have previously experienced limited stakeholder expectations concerning the involvement in sustainability issues (Borglund et al., 2008; Kell, 2018; Sun et al., 2011). Investors were for example initially reluctant to sustainability practices, claiming that their fiduciary duty were limited to the maximization of shareholder profit. The banking sector’s engagement in sustainability issues have thus previously been in the shadow of other industries which are considered to have a more direct environmental impact (Branco & Rodrigues, 2006; Cai et al., 2012). The lack of attention towards banks’ corporate responsibility has therefore contributed to a literature gap within financial research (Branco & Rodrigues, 2006; Kell, 2018).
Lately, however, the demands on the financial industry have changed and banks are nowadays expected to engage in practices for social and environmental sustainability (Borglund et al., 2008; Kell, 2018). This became particularly evident after the financial crisis in 2008 which raised a strong wave of criticism towards the banking sector’s narrow focus on short-term results and lack of corporate responsibility (Borglund et al., 2008; Jacob, 2012; Lauesen, 2013). The dominating market logic’s focus on profit maximization thus became challenged and required banks to incorporate and engage in new practices to fulfill their stakeholders’ sustainability demands. The demands that evolved in the aftermath of the crisis strengthened the regulations wherefore banks had to a wider extent engage in sustainability and increase disclosures regarding their sustainability practices (Chelli et al., 2014; Lauesen, 2013).
Within the banking sector, banks also possess a wider responsibility since they are involved in investing and lending capital to various industries and infrastructure projects which may have an impact on societal and environmental concerns (Cai et al., 2012; Kell, 2018; O’Sullivan & O’Dwyer, 2009). As a result of the increased responsibility, as well as the acknowledgement that banks can be involved in controversial investment decisions, the notion of sustainable finance has become an established concept within the industry (ibid). The European Commission (2019) defines sustainable finance as the provision of finance to investments while taking environmental, social, and governmental aspects into account. Even though sustainable finance has become a common occurrence, it is still rather unclear how banks can approach the
concept and how sustainability activities are applied in practice (Chelli et al., 2014; O’Sullivan & O’Dwyer, 2009). Consequently, this type of study is requested (Branco & Rodrigues, 2006; Smets et al., 2012; Thien, 2015) and the financial industry is of particular relevance since the incorporation of sustainability, which holds both a market- and social logic, can contribute to insights in practices that will influence the market logic dominating field.
2.6 Institutionalization of Sustainability in Organizations
Sustainability practices can neither be seen as a fixed script, nor a tool that can guarantee organizations to obtain legitimacy (Sahlin & Wedlin, 2008; Schultz & Wehmeier, 2010). Instead, the institutionalization of sustainability rather represents a dynamic process where the outcome reflects the interplay between actors, actions, and expectations in the relevant context (ibid). It is also important to be aware and consider how each actor’s own interpretations and personal values influence and shape the institutionalization process (Schultz & Wehmeier, 2010). Consequently, to gain a better understanding for how practices become institutionalized within organizations, it is necessary to view the interplay between actors in their current context and how they reinforce and influence each other (Sahlin & Wedlin, 2008).
As an idea of new practices travels through an organization, it will encounter existing practices and ideas which will influence the translation process. Schultz and Wehmeier (2010) have described the process of how new ideas of sustainability enter corporate life, and how it begins by being translated to the organization’s context. However, as organizations begin communicating and performing their sustainability activities, the idea will become modified and hence change from its original form. Nevertheless, the translation of ideas is an ongoing process in the sense that it never becomes finalized. This is a result of what is being translated constantly changes as it travels through different fields, settings and encounters already embedded practices (Sahlin & Wedlin, 2008). Although the institutionalization process of sustainability practices can be described as an unpredicted process dependent on the individual’s own interpretations, prior research has found that it is possible to influence what becomes legitimate sustainability practices through strategic communication (Marais, 2012; Schultz & Wehmeier, 2010).
2.6.1 Legitimizing Sustainability Practices through Communication
As strategic communication has been identified as an influential tool to legitimize sustainability (Schultz & Wehmeier, 2010), it is for the purpose of this thesis relevant to look further into how professionals can communicate their sustainability practices to make them legitimate. Windell (2007) has explored how professionals can spur the legitimization of sustainability practices and hence contribute to the institutionalization of sustainability. Windell’s (2007) study of commercializing and mobilizing CSR entails three stages: labelling fluffy ideas, packaging fluffy ideas, and mobilizing a label. In the first stage, the various labels of CSR are reduced to one common label in order to raise awareness for businesses’ social responsibility and to create a market demand for services addressing CSR. Stage two involves packaging fluffy labels wherefore the concept of CSR is packaged into sellable products and services. In the last stage, the label of CSR is mobilized by using rhetorical strategies built on economic arguments which aim to convince the business community about the values of performing CSR. The arguments are thus based on profit and efficiency improvements and contributes to make CSR a comprehensible business idea.
The rhetorical stage in Windell’s (2007) study also relates to Marais’s (2012) study which highlights three rhetorical strategies that can be applied to legitimize sustainability practices. Marais’ (2012) three rhetorical strategies are labelled normative-, instrumental-, and value rhetoric, and these are applied depending on what stakeholder the organization is communicating with and what type of legitimacy the organization wishes to develop. The normative rhetoric is used to develop corporate cognitive legitimacy and focus on creating trust among the stakeholders by emphasizing the organization’s willingness to follow accepted sustainability norms and standards. In order for an organization to create legitimacy based upon trust, top management will thus need to communicate statements to the stakeholders regarding the organization’s sustainability position and activities. The second strategy, instrumental rhetoric, is applied to develop pragmatic legitimacy which concerns the self-interest of the organization’s stakeholders. Instrumental rhetoric thus aims to demonstrate how the stakeholder may benefit by the organization being engaged in sustainability practices. If the organization satisfy stakeholders’ utility, the stakeholders will support the organization and the practices will be considered legitimate. This rhetoric is thus similar to Windell’s (2007) third stage which also aims to establish legitimacy by communicating how the organization’s sustainability involvement may benefit the stakeholder. Marais (2012) last strategy, the value rhetoric, entails approaching the stakeholders’ feelings and emotions which contributes to
create moral legitimacy. In this rhetorical strategy, organizations gain legitimacy for their sustainability practices by emphasizing attributes of good citizenship as their communication evolves around values and shared moral principles. This contributes to make the stakeholders approve the practices and hence consider them legitimate.
For the purpose of this study, the authors have incorporated Windell’s (2007) stages, involving the establishment and commercialization of sustainability, with Marais’ (2012) rhetorical strategies to examine how sustainability practices can become legitimate through communication. Although Windell’s (2007) study focuses on how consultants have managed to establish and sell CSR services to corporations, the strategy can also be applied on actors within an organization as they aim to legitimize and implement sustainability in a profit driven context. Furthermore, while Marais’ (2012) study focuses on top management, the rhetorical strategies can provide valuable insights when analyzing how professionals responsible for driving an organization’s sustainability practices can gain legitimacy through their communication.
2.7 Theoretical Summary and Model of Analysis
The literature review has introduced institutional theory and presented the development of institutional logics which has shed light on some of the challenges associated with multiple logics that organizations have to successfully manage in order to legitimize their practices. By exploring the perception of sustainability, this thesis will consider the conflict between the market- and social logic, while also analyzing how rhetorical strategies can be applied to legitimize sustainability practices. The empirical research in this thesis will hence be conducted at a micro level, although the logics that are influencing the work are emerging from the macro level. By adding a contribution to Thornton et al. (2012) division of logics, and by incorporating the categorization of actors engaging in sustainability (Bakker et al., 2016; Windell, 2007), this thesis will apply the market logic as characterized by profit maximization and money-makers, and the social logic featured by social welfare and world saviours. These two logics will thus constitute the foundation in the analysis for how a bank perceives and manages multiple logics of sustainability.
Figure 2 illustrates how multiple logics, existing at a macro level, approach an organization
and demands the micro level actors to effectively manage the logics arising conflicts and perform practices that are considered legitimate. In this thesis’ area of research, the financial industry has traditionally been dominated by a market logic which has influenced the motives of a bank’s operations and activities. Therefore, an analysis of how sustainability professionals legitimize the concept of sustainability can provide fruitful insights to how sustainability practices, containing conflicts of the market- and social logic, can be managed. Ultimately, if the incorporated practices are considered legitimate, they can eventually also influence the field level conception of sustainability. The figure thus illustrates the interplay between the macro and micro level of sustainability based on literature by Bakker et al. (2016), Lindberg (2014), Marais (2012), Pache & Santos (2013), Scott (2014), Smets et al. (2012), Thornton et al. (2012), and Windell (2017).
Figure 2. Interplay Between Macro and Micro Level of Sustainability
Managing multiple logics
Macro level/ Field level Micro level/ Organizational level Market logic Social logic • Profit maximization • Short-term • Business opportunity • Money-makers • Social welfare • Long-term • Contribute to
the greater good • World saviours
Perception of Sustainability Sustainability Practices
Conception of Sustainability
Figure 3 illustrates the thesis’ model of analysis. Based on the above literature review, the
study’s model of analysis will focus on the micro level aspects of managing multiple logics and how sustainability practices can become legitimized. The first part of the analysis model will explore how the concept of sustainability is perceived and how sustainability professionals, through compromising or combining multiple logics of sustainability, adapt sustainability to suit the financial industryand its dominating market logic. The second part of the analysis will focus on the sustainability practices and how sustainability professionals legitimize their practices through normative-, instrumental- and value rhetorical strategies.
Figure 3. Model of Analysis
Social logic Macro level/
Field level
Micro level/
Organizational level Sustainability Perception of Sustainability Practices
Managing multiple logics • Compromising • Combining Legitimizing sustainability • Normative rhetoric • Instrumental rhetoric • Value rhetoric Market logic
3. Method
This section begins with a presentation of the thesis’ research approach and design followed by a description of how primary- and secondary data was collected. This part also entails how the interviews were conducted and how the operationalization was made. Finally, the chapter ends with a discussion of the data analysis and ethical considerations.
3.1 Research Approach
In order to gain insights into the micro level perspective of managing multiple logics, this thesis has been conducted as an exploratory research. An explorative design was considered appropriate since it clarifies the phenomenon of sustainability and how multiple logics may influence sustainability practices. Moreover, Bryman and Bell (2017) argue that an explorative research is a suitable method to use when the area of study is poorly addressed; which is the case for this thesis (Greenwood et al., 2010; Lindberg, 2014; Pache & Santos, 2010; Powell & Colywas, 2008; Reay & Hinings, 2009; Smets et al., 2012). Furthermore, the thesis has applied an abductive approach where the authors have moved back and forth between theory and research in order to gradually understand the multiple logics of sustainability and how the managing of these influences’ organizational practices. This approach enabled valuable reflections between existing theory and practice, and was of particular relevance for this study since research exploring the micro level perspective of institutional logics is limited. The study has hence been steered by a theoretical framework while also allowing the findings to be fed back into the stock of theory (Bryman & Bell, 2017; Saunders et al., 2016; Yin, 2014). Moreover, in an attempt to enhance reliability, the authors have aimed to explicitly explain how the phenomenon of sustainability is applied in the research. Consequently, this transparency intends to make it possible for other researchers to perform a similar set of study (Saunders et al., 2016).
3.2 Research Design
As the aim of this paper is to examine how a bank can manage multiple logics of sustainability and legitimize their sustainability practices, the research has been conducted as a qualitative case study. A qualitative case study has proven to be appropriate since it allowed the studied organization’s perception, as well as the respondents’ experiences, to become prominent (Saunders et al., 2016; Yin, 2014). The research design has therefore contributed to the
possibility to draw inferences out of the perceptions of sustainability, the managing of multiple logics, and how the bank’s sustainability practices are legitimized through rhetorical strategies. Due to criticism concerning the external validity of case study results (ibid), the findings are not interpreted to reflect the perception and managing of multiple logics across the financial field. The performed case study rather provides a practical example and aims to contribute with a deeper understanding for the complexity of managing multiple logics through studying it in one relevant organization. The research design is therefore considered appropriate for this study and its intended purpose.
3.2.1 Selection of Case and Respondents
The Nordic bank Nordea constitutes the case of this study and exemplifies how multiple logics of sustainability can be managed in a context that historically has been recognized as being driven by a market logic. Nordea was selected due to their increased involvement in sustainability initiatives which are reflected in the organization’s continuous development of new sustainable products such as sustainable funds and green mortgages (Nordea, 2019a). Furthermore, Nordea has as the only Nordic bank been ranked as one of the world’s top 100 most sustainable corporations (Corporate Knights, 2019). In addition, having access to in-depth insights to Nordea’s sustainability work facilitated a sufficient data collection which further contributed to make the bank an appropriate case to study. Therefore, in view of Nordea’s engagement in sustainability, the bank is considered a proper organization for analyzing how sustainability, consisting of multiple logics, can be managed and legitimized in a market driven context.
In order to answer the research question, professionals responsible for setting and driving the sustainability agenda within Nordea Group has been interviewed. At Nordea, Group Sustainable Finance (GSF) is responsible for integrating sustainability throughout the organization, as well as driving the sustainability agenda both internally and externally. Professionals within this team were therefore relevant to interview in order to explore how multiple logics of sustainability are managed, and how rhetorical strategies are being used to legitimize sustainability practices in a market driven context. In accordance to Bryman and Bell (2017) and Jacobsen (2002), the authors have applied a purposive sampling as the aim of the
research. However, the authors are aware that the purposive sample venture that potential respondents who possess important information in other parts of the organization might get excluded from the study (Bryman & Bell, 2017). Nevertheless, the benefits of interviewing people from GSF who drives Nordea’s sustainability work exceeded the drawbacks as their responses contributed to a profound analysis and represents Nordea’s take on sustainability.
3.3 Data Collection
3.3.1 Interviews
The study’s primary data consisted of ten interviews with respondents from GSF. Studies conducted on a limited number of interviews are often criticized for their lack of external validity as such studies are not considered to represent a wider population (Bryman & Bell, 2017). However, since this study aims to investigate the management of conflicting logics and how Nordea legitimize their sustainability practices, the authors consider the chosen respondents as able to contribute to a sufficient analysis for the thesis’ intended purpose. Additionally, similar answers were identified already after five interviews wherefore ten interviews were considered to represent a proper number of interviews in order to reach a saturation for the studied topic. Table 2 will further elucidate the interview details.
Table 2. Description of Interviews
Respondent Position at Group Sustainable Finance (GSF) Date Duration
Respondent 1 Head of Thematic Research 2019.03.18 55:33 min
Respondent 2 Sustainability Expert & Executive Advisor 2019.03.18 53:51 min
Respondent 3 Sustainability Expert & ESG Advisor 2019.03.19 50:40 min
Respondent 4 Business Area Lead, Personal Banking 2019.03.21 49:00 min
Respondent 5 Business Area Lead, Commercial and Business Banking 2019.03.21 47:48 min
Respondent 6 Business Area Lead, Wholesale Banking 2019.03.22 41:36 min
Respondent 7 Deputy Head of GSF, Business Development 2019.03.22 53:56 min
Respondent 8 Sustainability Reporting Expert 2019.03.26 52:27 min
Respondent 9 Communication Manager 2019.03.26 49:50 min
Respondent 10 Business Area Lead, Asset & Wealth Management 2019.04.04 43:43 min
The interviews were conducted by applying a semi-structured approach which according to Jugesten and Mik-Meyer (2011) is appropriate when performing an exploratory research. The interviews were thus following an interview guide which were established prior to the
interviews and operationalized upon the theoretical framework. The guide was used during all occasions to entail a similar structure and it is presented in Appendix A. The semi-structured interviews thus facilitated the possibility to ask open questions concerning sustainability and how GSF manages and drives the concept within Nordea. Furthermore, in accordance to Saunders et al. (2016), the semi-structured approach made it possible for the authors to deviate from a set structure of questions and insteadmake room for new insights which emerged during the interviews.
Nine of the interviews were made at the respondents’ workplace in Stockholm, and one interview was conducted through a video-chat due to the respondent being positioned in Finland. All the interviews were conducted in Swedish in order to make the respondents feel more comfortable while speaking their native language. The intention was thus to create a calm atmosphere which hopefully would result in more detailed answers (Bryman & Bell, 2017). During all ten interviews, both authors were present although it was mainly one who was leading the interview in order to secure an active conversation involving follow-up questions. The other author was in charge of making sure that the discussion had covered the questions in the interview-guide while also taking some notes and contributing with follow-up questions if something had to be further elaborated. All respondents gave their consent to become recorded during the interview which enabled both authors to give their full attention to the discussion. The recordings also made it possible to transcribe the interviews word-by-word which facilitated the possibility to go over the material and make sure that all data was taken into consideration; which increases the reliability of the study (Bryman & Bell, 2017; Saunders et al., 2016).
Since recordings have been used during all interviews, the authors have considered the possibility that the respondents have chosen to express themselves more carefully. However, considering that the thesis does not wish to explore individual opinions concerning sustainability, but rather represents the organization’s take on sustainability, the interviews have not been of a sensitive character wherefore the recordings should not have had any major impact on the responses. Furthermore, since one of the interviews was performed through a video-chat, the authors were aware of the risk that some of the personal interaction may have become
3.3.1.1 Constructing the Interview Guide
The interview guide was, in addition to the opening questions, divided into four main parts; Perception of Sustainability, Managing Conflicting Logics of Sustainability, Sustainability Practices and Legitimizing Sustainability Practices. The questions thus follow the thesis’ model of analysis and the interview guide can be found in Appendix A.
The first part of the interview guide concerned the perception of sustainability and aimed to explore how the respondents apply Nordea’s perception of sustainability to the financial industry. The first question was therefore asked in order to understand the respondent’s opinion of incorporating sustainability in the banking sector which emphasized the logic related to sustainability. Moreover, the respondent was given the opportunity to describe Nordea’s purpose of engaging in sustainability which associated to the market- and social logic (Thornton et al., 2012) as well as Bakker et al. (2016) and Windell’s (2007) definition of actors engaging in sustainability: the money-makers and the world saviours. The questions therefore enabled the authors to draw inferences out of the responses to get a deeper understanding of Nordea’s perception of sustainability and connect it to the literature concerning market- and social logic.
The second part of the interview guide involved the managing of conflicting logics, wherefore the authors wished to explore the respondents’ opinions concerning different elements in the market- and social logic together with challenges of implementing sustainability. Therefore, this part included questions concerning how GSF manages conflicting logics which is connected to literature that emphasize how organizations can incorporate different strategies in an attempt to reconcile conflicting demands (Kraatz & Block, 2008; Oliver, 1991). This is primarily related to Pache and Santos (2013) and Reay and Hinings’ (2009) discussion of compromising and combining conflicting logics. Consequently, these questions made it possible to identify the difficulties that GSF is experiencing when incorporating their sustainability practices, as well as how the challenges of multiple logics are being managed.
The third part involved questions regarding Nordea’s sustainability practices and this section of the interview aimed to gain a further understanding of what is included in Nordea’s sustainability work. To receive a deeper understanding of how the sustainability practices are implemented in the organization, this section also included a specific question regarding how the sustainability practices are integrated in the bank. This question facilitated the possibility to explore how the practices could be connected to the co-existence of multiple logics discussed
by Lindberg (2014) and Thornton et al. (2012). The questions therefore explored Nordea’s sustainability practices and contributed to the possibility to understand how GSF integrates sustainability throughout the organization.
The last part of the interview guide covered the legitimizing of sustainability practices and strived to explore how the practices become legitimized and how the respondents choose to communicate in order to develop legitimacy. The questions thus explored how Nordea’s sustainability practices are communicated and if the used rhetoric depends on which stakeholder Nordea approaches. This part relates to Marais’ (2012) three different rhetorical strategies which can be applied in order to legitimize sustainability practices. The questions also relate to the third stage in Windell’s (2007) study which concerns how rhetorical strategies, founded on appealing arguments for the relevant stakeholders, are applied by actors to legitimize sustainability. This part has therefore contributed to insights of how Nordea’s sustainability practices are being rhetorically communicated to gain legitimacy and acceptance by their stakeholders.
3.3.2 Secondary Data
Apart from the interviews, secondary data consisting of documents produced by Nordea have been utilized to enrich the understanding of how multiple logics of sustainability are managed in the organizational context. In order to gather data regarding Nordea’s sustainability practices and how these relate to the market- and social logic, the study included information available on the organization’s website, reports such as “Sustainability Report 2018” as well as brochures communicating Nordea’s engagement within sustainability, e.g. “Sustainable Finance at Nordea”. In addition, the secondary data consisted of Nordea’s Sustainable Finance YouTube videos and LinkedInposts as these also constitute an essential part of Nordea’s communication regarding their sustainability practices.
By combining different sources of data, the authors have been able to compare the results obtained in the interviews with the findings from the secondary data (Bryman & Bell, 2017). This facilitated the possibility to identify common approaches towards sustainability and how the managing of multiple logics is conducted at Nordea. Complementing the interviews with
Consequently, by using several sources of data when conducting the research, the authors have applied triangulation which increases the study’s reliability (Patel & Davidson, 2011; Saunders et al., 2016).
3.4 Data Analysis
As the research aims to study the managing of multiple logics at a micro level, the unit of analysis is on an organizational level. The coding process involved reviewing all collected data and labelling data that seem to be of theoretical significance or that appear prominent within the social worlds of those being studied (Saunders et al., 2016). The collected data was thus reviewed and the authors searched for concepts, phrases and keywords that were considered relevant in relation to the thesis’ purpose and model of analysis. Nevertheless, the authors have acknowledged that their own interpretations can have influenced the data analysis as they are the only ones deciding what is considered to be of interest in the collected data which can affect the study’s validity (Braun & Clarke, 2006; Bryman & Bell, 2017). The authors have however tried to avoid being biased by analyzing the data independently and then combining their findings which contributes to improve the analysis of the data since it involves diverse perspectives (Patel & Davidson, 2011).
3.4.1 Thematic Analysis
By using a thematic analysis, the coded data was initially sorted into various themes connected to the thesis’ model of analysis. This involved the perception of sustainability, managing multiple logics of sustainability, sustainability practices and rhetoric used to legitimize the sustainability practices. These were later extended with subcategories which were identified as relevant for the thesis model of analysis, see Table 3. However, the analysis process has not been linear but rather an ongoing process where data has been reviewed and connected to the relevant themes that have emerged. In thematic analysis, it is important to make sure that the identified themes do not overlap each other (Braun & Clarke, 2006), which is challenging when studying institutional logics that are rather vague in its nature. Nonetheless, the authors strived to create as distinctive themes as possible in order to clarify and separate each theme from each other.
After the process of identifying themes, they were connected to the relevant theory and the research purpose. This approach resulted in a detailed analysis of some aspects of the data, but also an exclusion of the remaining data. Therefore, the authors have acknowledged and been aware of the thematic analysis’ risk of fragmenting data which can cause a loss in the context of what has been said; something which is considered a limitation in this type of analysis (Bryman & Bell, 2017). However, in order to minimize this limitation, the authors have performed a cautious thematic analysis, which as previously described involved reviewing the data apart and then together. Moreover, as the thematic analysis aimed to study different concepts of logics, it was important that the authors strived to identify the underlying assumptions connected to the literature.
Table 3. Coding Scheme
Main Theme Subcategory Codes Representative Quotations
Perception of Sustainability Market Logic • Profit maximization • Business opportunity • Competitive • Self-interest “Sustainability is business”
“Sustainability is about surviving and preparing ourselves for what the future holds” Social Logic • Responsibility • Social welfare • Contribute to the greater good • Long-term • Circular economy
“By being a central part of the society, Nordea has a big
responsibility to transfer capital to more sustainable solutions” “It is part of Nordea’s duty to drive the shift towards a sustainable future”
Managing Multiple Logics Compromising • Altering elements of logics • Adapting sustainability to finance
• Social concern without performing charity
“Sustainability has nowadays become correctly adapted to the financial sector”
“If it is done correctly, sustainable investments will give better returns while also contributing to something good - it is a win-win”
Combining
• Not altering elements of logics
• Two-sided purpose • Business-driven &
good corporate citizen
“The primarily purpose is to make money, but this cannot be made at any cost”
“Two-sided purpose, making money while contributing to a sustainable development”
Intra-Logic Conflicts
• Conflicts within one logic
• Prioritizing demands • Satisfy stakeholders
“Since sustainability involves environmental and societal concerns that usually are integrated, we have to find a way to manage these different demands”
“We cannot shut down the oil industry one day to another because then we would not take our social responsibility as that would make
Sustainability Practices Sustainability Agenda • Strategic direction • Leadership position • GSF’s responsibility • Integrate sustainability • Institutionalization of sustainability
”GSF sets and drives the sustainability agenda throughout Nordea by setting targets and developing position statements” ”Sustainability has to become a part of Nordea’s DNA” Activities & Products • Initiatives • Ambassador forum • E-learning • Star-fund • Green bond • Green mortgage
“We have developed an E-learning to educate all employees at Nordea. It is necessary to raise awareness and involve the employees within the organization”
“It is important to offer something concrete to our customers, show them how profitability and sustainability is compatible” Legitimizing Sustainability Normative Rhetoric • Create trust • Standards, ratings, guidelines, policies • Legislations • Global taxonomy • Corporate legitimacy
“All established standards, guidelines and policies etc. contribute to decrease misunderstandings and make the customer feel ensured that the sustainable fund actually lives up to its expectations” Instrumental Rhetoric • Communicate benefits • Engage stakeholders • Attract stakeholder’ interests • Pragmatic legitimacy
“In order for us to do this journey together with our stakeholders, we have to persuade them that
sustainability is beneficial. That is the key to succeed in this development”
Value Rhetoric
• Approach morality • Good citizenship • Everyone can make a
difference • Moral legitimacy
“It is about informing and inspiring our customers that their money can make a difference and that Nordea will with its financial position lead the change and contribute to a better world”
3.5 Ethical Considerations
During the collection of data, the authors have considered the ethical principles of doing research presented by the Swedish Research Council. The principles consist of the information requirement, the consent requirement, the confidentiality requirement and the usage requirement (Vetenskapsrådet, 2002). The authors have thus emphasized that the respondents’ participation in the study is voluntary, and that they can end the interview at any time. Furthermore, the respondents have been promised anonymity as much as it is possible considering that the bank and the positions are stated. However, since it is difficult to give complete information about the study without risking to affect its findings (Bryman & Bell, 2017), the authors have strived to find an appropriate balance when giving information regarding the study to the respondents. Prior to all interviews, the respondents were informed that the recorded and transcribed material would be treated confidentially by the authors. This was accomplished since the material has solely been managed by the authors themselves and it has only been used for the purpose of this thesis.
4. Sustainable Finance at Nordea
This section presents the empirical findings beginning with an introduction of the selected case. Following, Nordea’s perception of sustainability and the underlying motives for integrating sustainability is presented. Thereafter, the sustainability involvement is emphasized, involving Nordea’s sustainability practices and products. Finally, the chapter ends with a description of how sustainability is communicated to become legitimized.
4.1 Presenting Nordea and Group Sustainable Finance
Nordea Bank Abp is the leading bank in the Nordic region with about 30 000 employees (Nordea, 2019b). Nordea is a full-service bank divided into four business areas: Personal Banking, Commercial and Business Banking, Wholesale Banking, and Asset and Wealth Management. Through their different business areas, Nordea offers a broad range of expertise and products to meet the specific needs of private-, corporate- and institutional customers. More particularly, Nordea’s Personal Banking has the largest customer base in the Nordic region with about 9 million household customers. The second business area, Commercial and Business Banking, serves, advices and partners with corporate customers by covering their business needs through e.g. payments, cash management and financial solutions. The third business area, Nordea Wholesale Banking, provides financial solutions to the biggest corporate- and institutional customers. Lastly, Asset and Wealth Management offers investment, savings and pensions solutions to individuals and institutional investors (ibid).
Group Sustainable Finance (GSF) is responsible for setting the sustainability agenda for Nordea Group and is a Nordic team that consists of 25 people. The team works towards all business areas where they collaborate with each business area to drive and integrate sustainability throughout Nordea’s organization. Ultimately, GSF sets the strategic sustainability direction and targets while also supporting business areas and group functions in the implementation process (Nordea, 2019c).
“We [GSF] are a group function that are responsible for Nordea’s sustainability involvement by setting the sustainability agenda and driving the sustainability work”
