A French bank is trying to tally whether its business is helping or hurting society with an indicator that translates its extra-financial performance in monetary terms.
(Bloomberg) — A French bank is trying to tally whether its business is helping or hurting society with an indicator that translates its extra-financial performance in monetary terms.
Credit Mutuel Arkea, which unveiled its full-year earnings Wednesday, also published an indicator that reflects the positive and negative impact of its financing activities on society, such as job creation on the positive ledger and carbon emissions as a negative. This indicator stood at €9.4 billion ($10 billion) in 2022, up 4.1% from a year earlier on a like-for-like basis.
While the figure is tough to judge without peers, it’s a novel step in the growing debate over whether companies should think beyond just shareholders when assessing their impact. That charged discussion has drawn in BlackRock Inc. chief Larry Fink and JPMorgan Chase & Co.’s Jamie Dimon, and now a privately held bank based on the French coastal region of Brittany is trying to put a figure on its impact.
The move “says a lot about our conviction that a company’s performance can’t be merely financial, and about our ambition to be a bank with a positive impact,” Chief Executive Officer Helene Bernicot said in a statement.
According to Credit Mutuel Arkea, every €1-million loan it granted in 2022 generated, in average, a €168,000 positive impact for a €18,000 negative hit. At €150,000, the net impact on society remained stable from a year earlier.
This is the first time the lender publishes this indicator along with its full-year earnings. The bank’s extra-financial performance for 2021 and 2020 was released in October last year.
The methodology, which the lender unveiled in 2021, has been applied to 75% of its financing activities, 95% of its procurement and 94% of its workforce.
With almost €200 billion in assets, Credit Mutuel Arkea employs more than 11,000 staff. Last year, the lender saw its revenues gain 1.5% to €2.6 billion in 2022, while its net income declined 4% to €550.7 million.
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