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ABSTRACT

Date: 9th of June 2021

Level: Master thesis in Industrial Engineering and Management, 30 ECTS

Institution: School of Business, Society and Engineering, Malardalens University

Authors: Sandra Michael, Ali Mohsen

Title: Drivers and barriers in future implementation of the EU’s Taxonomy                           in a bank – A qualitative study of the bank’s sustainability work 

Supervisor: Sofia Wagrell 

Keywords: CSR, Taxonomy, Customer behavior, B2B, Driving forces, Barriers,                                                                Real estate, Sustainability

Research questions: 1. What potential driving forces and barriers exists to implement the EU’s Taxonomy at Sparbanken Alfa? 2. How will customer behavior and the relationship with the real estate customers be affected if the EU’s Taxonomy is implemented at Sparbanken?3. In what ways will Sparbanken’s CSR-work potentially be affected by the EU’s Taxonomy?

Purpose: The purpose of the study is to analyze the driving forces and barriers that arise in the potential implementation of the European Commission’s Taxonomy at Sparbanken Alfa. Furthermore, it has the purpose to analyze how the Taxonomy will affect customer behavior in various forms. In addition, an analysis of Sparbanken’s CSR-work from a sustainable, economic, and social perspective will be carried out. This will in its entirety provide a basis for a future work in environmental awareness and credit loans to customers at Sparbanken Alfa.    

Method: To answer the questions and achieve the purpose of the study, a qualitative research method is applied with an inductive or abductive research approach. To increase the understanding of the chosen field, the literature study and the theoretical framework will be the basis of this study. The empirical material has been provided through qualitative semi-structured interviews with five real estate companies. The interviews contributed to unique observations that drew general reviews. In the data collection, secondary data have been used in the form of sustainability reports, annual reports, and EU’s reports on Taxonomy.

Conclusion: The potential driving forces that may arise in a future implementation of the EU’s Taxonomy are divided into three categories. The first category includes CSR and sustainability, driving forces are clarity in the sustainability strategy, enabling new products and services. The vision of Sparbanken is similar to the definition of CSR and Sparbanken’s Sustainable Development Goals. In addition, customers demand inspiration, support in sustainability work, sustainability analysis, curiosity and interest, new legalizations from EU, encouraging work with CSR and a philanthropic and social heart. The barriers that can arise in this category are among other things, uneducated staff, unmotivated customers, lack of information, lack of work with climate change, customers are only interested in the financial perspective, customers change bank, lack of development, customers do not find any experience in the relationship whilst Sparbanken prioritize social issues. Furthermore, customers mean that Sparbanken should not be alone in this change and environmental awareness is not prioritizing due to housing shortages.  The second category includes business-to-business and customer behavior. Increased trust leads to minimization of uncertainties and increased trust, development of the relationship, honesty and integrity, social responsibility, and simplicity. Increased loyalty helps to understand customers’ CSR perceptions, customers contribute with social factors, Sparbanken Alfa becomes financially strong, value and quality increases in the relationship and a reward system becomes current. In addition, formal contracts become long-lasting. The balance of power is strengthened through no coercion on the customers, a strong dependence, and a hierarchical control according to Sparbanken Alfa. If trust becomes a barrier, Sparbanken risks going bankrupt, customers questioning, lack of social responsibility, termination of business relationship and restrictions of development. If loyalty is lacking, this leads to customers going to competitors, short-term business relationships, business optimization, lack of information exchange and high interests’ rates. If the power becomes unstable, this leads to no lock-in effects, not a strong dependence and the hierarchical control becomes problematic according to the customers. The third category presents EU’s Taxonomy. The potential driving forces are that Taxonomy’s environmental objectives is like Sparbanken’s Sustainable Development Goals. There are also indirect factors such as bonds and energy efficiency. The Taxonomy also leads to active and better conditions and increases customers motivation. On the other hand, the barriers for the Taxonomy are that the concept applies to a company with 500 employees whilst Sparbanken only has 100 employees. Furthermore, it leads to high costs for restructuring, threats with risks such as competition and losing market share, lack of courage and political impact.