Barclay's Group CEO on being a good corporate citizen

This is the text of John Varley's speech on 31st May at the Fifth Ethical Corporation Summit in London

Imagine that you're a big organisation, making good returns on capital. Employing a lot of people. Serving a lot of customers. Doing business under a well-known brand.

If you're these things, then you have choices to make.

Choices about what you do. And choices about how you do it.

You can make choices that are irresponsible ... but lucrative.

You'll get away with that for a while. Your profit growth may even exceed what you can make by running your business in a responsible way.

But bit-by-bit, as the values that bind your organisation together are compromised through irresponsible choices, and the trust of your customers is diluted, your brand will suffer.

And let's be sure about this: brands are far more important to stock market value and sustained growth, than short term profits.

Brand equals soul

The brand of an organisation is the outward manifestation of its soul.

"Soul" is an unfashionable word in the 21st Century.

But with soul goes purpose and values; with soul goes commitment, and energy, and creativity, and the drive to serve and to help.

Corporate responsibility, the subject of this summit, is more than anything else about soul.

I am delighted to join you today for the fifth Ethical Corporation Summit. I note that the theme this year is "Ethical Leadership - how to communicate and embed values in your organisation".

So, over the next ten minutes, I'll talk about our corporate responsibility activities in Barclays and their fundamental importance to our strategy as a bank.

In particular, I'll take a look at why corporate responsibility is important to our customers, our employees, the governments of the countries in which we operate, and to our investors.

Beyond financial results

In February of this year, when we announced our results for 2005, Barclays reported a record financial performance.

A few weeks ago I was able to report another record performance - in the area of corporate responsibility.

Many of you will have seen the recent results of the Business in the Community "Companies that count" index in the Sunday Times.

This is one of the main ethical indices in which we participate. It's a thermometer for the health of our corporate responsibility.

Last year we were in 32nd position. This year we're 3rd - our highest ever ranking.

That's more like it.

Our top three ranking reveals something important: a strong performance as a responsible corporate citizen does not conflict with strong financial performance.

Business-wide responsibility

Corporate responsibility is an intrinsic part of our strategy.

Our business activities span branch banking in the UK and overseas, credit cards, investment banking, asset management and wealth management.

And so do our corporate responsibility activities.

CR attaches to every facet of our business: our strategy, our product development, the way we treat our employees and the way we serve our customers.

It covers everything from: treating customers fairly to playing our part in addressing climate change, to championing equality and diversity, to using our skills and resources to address issues such as financial and social exclusion.

We can't (and shouldn't) separate our corporate responsibility activity from our daily business.

Nor can we separate corporate responsibility from our brand.

That's because the people we seek to reach with our brand expect us to be responsible.

Our stakeholders - customers, employees, regulators and investors are becoming more sensitive to our changing world.

They are intensely interested in ethical, environmental and social issues, and business conduct.

For customers making buying decisions, corporate responsibility is a point of difference.

For talented people looking to move organisations, corporate responsibility is a point of difference.

So our corporate responsibility activity is our way of showing, to our diverse stakeholders, that we are sensitive to the issues that cause them to make choices about Barclays.

The long-term sustainable success of Barclays is inextricably woven with the long-term success of our employees and our customers.

Which is why we refer to our CR activity simply as "Responsible Banking": marrying what we do, banking, with how we do it responsibly.

There is no mutual exclusivity, or conflict, between doing business in an ethical and responsible way, and making money.

We make our biggest contribution to society by being good at what we do.

Our contribution is to deliver products and services that help our customers achieve their financial goals, create wealth and facilitate economic growth.

Spreading success

The fact that we are successful at what we do means a number of things to the stakeholders of Barclays.

Because we're successful we create employment in the 60 countries around the world where we do business ... and we employ over 110,000 people ... who in turn have hundreds of thousands of dependents.

Because we are successful we pay large amounts of tax: if I add the tax we paid last year on employee compensation to the tax we paid on our profits, it totalled more than £3bn.

I know we are a big company, and big companies pay tax. No news there.

But think again of that figure, and imagine how many schools and roads and hospitals you can build for £3bn.

Because we are successful, we can pay big and growing dividends to our shareholders: and our shareholders are mostly the pension funds who look after millions of citizens of both this country and others in their retirement.

So for us the debate should not be about companies making profits and being successful.

It should be about the choices that successful companies make, and how companies use their success to improve the lives of those who are touched by them.

Really making a difference

One example of where we in Barclays have made such choice is climate change.

I've always considered our environmental practices to be strong.

But with the growing importance of climate change as a corporate responsibility issue, we've renewed our focus.

One step that we are planning is to make our UK operations carbon neutral by 2007 - offsetting our emissions by investing in renewable, sustainable energy projects that use solar power and wind energy.

Another example of where we have taken an important lead is our involvement as a founder member of the Equator Principles.

The Equator Principles form a framework for a thorough independent environmental - and social - assessment of the impact of project financing, for major infrastructural programmes, such as dams and pipelines and mining.

We're a leading provider of financing of this sort.

So it's an important area of business for us. But we have made a choice about how we are going to participate in this business.

And by doing so, we are influencing other participants. More and more governments and construction companies are making the same kind of choice.

They realise that financing will be easier to obtain if the project complies with the Equator Principles.

Accessible banking

Another area where we've made choices about how we do business is in financial inclusion.

Financial inclusion is about creating access to banking services for people in society who have not always been well served by our industry in the past.

Over the last three years we've opened about 380,000 basic bank accounts in the UK for such customers.

In addition, in 2005 we launched Barclaycard Horizons, a programme to help indebted single parents.

We also launched an initiative in central London to extend basic banking facilities to the homeless.

And we've taken the same thinking into Africa, where we have been piloting micro finance programmes.

Africa is home to almost 40% of Barclays' employees. Following the acquisition last year of our majority stake in Absa (the South African bank), we now have 40,000 employees working in 12 countries across the continent.

Any business operating in Africa has to be concerned with health care.

We have an extensive programme.

It works on three levels: we offer free advice, testing and treatment to our own staff and their family members.

We help our business customers plan for, and cope with, the economic consequences of HIV/Aids.

And we invest in projects that benefit the whole community.

But don't think, please, that I am standing here in a halo of self satisfaction at what we've achieved.

Our stakeholders' expectations are rising. Our aspiration, to be one of the world's leading banks, is stretching. And so we must continue to be impatient, and energetic, about our performance in the area of CR.

But I do stand before you today telling you that we're serious about corporate responsibility, about "responsible banking".

And if you're a single parent receiving debt counselling through the Barclaycard Horizons programme; or if you're an employee in Botswana whose child is receiving treatment for HIV/Aids; or if your son or daughter is an 11 year old goalkeeper in the village children's football team, and he or she is wearing a kit that has been provided by Barclays as part of its Spaces for Sports programme; then you feel touched by Barclays.

You feel, I hope, the benefit of Barclays power. You see the choices we have made as a responsible corporate citizen.

You understand what our corporate responsibility programme delivers. You understand that it's about soul.

And it matters.

This is the text of John Varley's speech on 31st May at the Fifth Ethical Corporation Summit in London