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Handelsbanken: ‘our only target is keeping the customer satisfied’



With roots in Sweden and an emphasis on decentralisation and personal customer relationships, Handelsbanken has quietly become one of the most attractive sustainable banking alternatives on the market. Its UK head of communications, Richard Winder, talks to Blue & Green Tomorrow.

This article originally appeared in The Guide to Sustainable Banking 2013. 

Tell us about Handelsbanken.

Handelsbanken has been around since 1871. It grew as a fairly normal bank but in the late-60s, it and most other banks in Europe were experiencing milder versions of some of the problems banks are having today, and I suppose rather daringly, the board of Handelsbanken at the time contemplated quite a radical change in the operating structure of the organisation.

They had seen a smaller provincial bank in Sweden that was eating into Handelsbanken’s market share by running a very decentralised organisation with local branch managers taking the day-to-day decisions. The board was interested in talking to the person who made that happen, and so spoke to the CEO of that smaller provincial bank, Jan Wallander, and from those discussions, asked him if he would consider doing the same but at Handelsbanken.

Thankfully, he said yes, as long as he was able to implement this decentralised model in full, which was a tall order. The board agreed to this, and in the early-70s, Wallander and a small team of people led a complete turning upside down of the banks’ structure.

What is the theory behind this decentralised model?

Wallander’s central thesis was that there are only two things you need as a service organisation to be more profitable than your competitors. One is to have more satisfied customers than your competitors, and the other thing is to have lower costs.

On that basis, there is no choice if you’re prepared to put your money where your mouth is, but to devolve decision making to local branches. Once that decision has been taken, then there are two reasons why it makes no sense whatsoever to have targeting sets in the centre.

One is that the centre has a much less clear view on what is realistically achievable, so those targets may be under or overambitious. But secondly, if the point is really about customer satisfaction, the targets are completely irrelevant. The only target is that you make sure that you keep your customer satisfied.

Why is the model successful?

Our measure of success has absolutely nothing to do with growth. We don’t target growth. If it happens, it’s very nice, but it’s not what we’re looking for.

We have one relative target and that is, in any given year, be more profitable than the average of our banking competitors in our home markets.

The only two ways we seek to achieve that are through happier customers over the longer term, and lower costs – that’s the other part of the equation. If you put people in genuine control, they do take very personal control over things like costs.

Is there a typical Handelsbanken customer?

We don’t have a ‘typical’ customer as each of our experienced local branch teams each decide who they do business with. However, we do not see size or wealth, and instead our customers tend to reflect our own values here at Handelsbanken: they tend to be in very good control of their finances; they tend to be financially prudent; and almost all of them want a long-term banking relationship.

We’re quite honest in saying that there are lots of people who don’t see the benefit of a banking relationship as such, and at different stages in life, people’s need for that may well vary.

To become a Handelsbanken customer, you have to get to know the bank. If you’re someone who actually just wants an overdraft facility and to draw money out of a cash machine, often you’ll say that a relationship bank is not what you need.

How does sustainability relate to your model?

We would probably come from the other side than the norm when we hear sustainability. Does the business model lend towards sustainable behaviour? And obviously, in so many ways ours does.

It is a very low risk business; it tends to be countercyclical. When there’s a boom, we tend to put the brakes on because the decisions are being taken at a local level so our managers can clearly see when things are getting a bit risky.

But of course, when a crash comes as it did in 2008, we were in a very good position so didn’t have to take any help from shareholders, the state or taxpayers.

Are you an ethical bank?

We very much hope that we are a bank that happens to behave ethically, but wouldn’t set ourselves in a pigeon hole to say we’re an ethical bank in capital letters. We’re a bank that has a sustainable model because it’s good, sound business sense and commercially it works as well.

If people look at scandals and the like, then the obvious trigger point would be an internal thought process around ethics. And then it would be quite natural to look for an ethical provider, and a lot of good can be said for such players.

You have to remember, though, that there are those who are not using what they read in the newspapers to have to look for alternative banks, but actually they’re being arbitrarily forced to do that having been a good banking customer often for generations. They may not be led first and foremost by a disgust of the organisation’s values. They might just need a bank that can support them and that they can build a relationship with locally, rather than remotely.

There are dark greens and there are lighter greens. We would be lighter greens in the sense that our business model doesn’t start at the point of ethics. We take that as a given. It’s more that we must satisfy our customers, and if you start there, you tend not to do things like proprietary trading or only dealing with foreign call centres or paying egregious bonuses. Why would our customers be happy with that?

Further reading:

Has your bank been naughty or nice in 2013?

Big five’s banking monopoly at risk, with 2.4m closing accounts in 2012

Small is beautiful: why alternative banks need to step up to the mark

The Guide to Sustainable Banking 2013


New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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How Going Green Can Save A Company Money



going green can save company money
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What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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