Our responsible business strategy
Provident Financial’s responsible business strategy was launched five years ago. It is to operate our business of lending to our customers in a responsible manner and act responsibly and sustainably in all our other stakeholder relationships.
This strategy makes clear that our primary role as a business is to provide credit to our customers, many of whom are not well served by other lenders, or are excluded by them altogether. We do this by responsibly providing our customers with appropriate amounts of credit, maintaining close contact with them throughout the term of their loan and supporting them sympathetically if they experience difficulties.
This strategy is also about dealing with the issues that matter most to Provident Financial’s other key stakeholders, whether that is through the provision of a working environment for our colleagues that is safe, inclusive and meritocratic, the fair treatment of suppliers, investing in the many communities that the Group serves, engagement with the investment community on sustainability matters or the delivery of our business model in an environmentally friendly way.
Our purpose and strategic drivers
To help us to balance delivering responsible and sustainable products, services and partnerships to our customers, maintaining high levels of regulatory compliance, and providing a stimulating and rewarding workplace for our employees, while generating appropriate, sustainable returns for our shareholders, we invested time and effort throughout 2018 into building a blueprint for the future of the Group which is aligned to our existing responsible business strategy.
Our blueprint brings together why Provident Financial exists as an organisation, framed in the context of the role that our business plays in the lives of our customers. It also sets out the strategic areas of focus and the key priorities that will drive both competitive advantage and commercial success for the whole Group. Finally, it articulates how these focus areas and priorities will be delivered and sets out the behaviours that will be needed to succeed.
We also engage with our stakeholders to ensure that we manage and report on the CR issues that matter most to them and our business. We do this by undertaking materiality assessments at least every two years to identify and prioritise the CR issues that are material to the Group. This exercise helps to inform our purpose and CR strategy, and ensures that our CR reports respond to the interests of our stakeholders and comply with the Global Reporting Initiative’s G4 reporting guidelines. Our most recent materiality assessment undertaken in early 2019, was, as in previous years, carried out by the independent sustainability management consultancy Corporate Citizenship. The issues that were identified as a result of the materiality assessment exercise have been plotted below.
The most significant changes in topics that stakeholders deem material to our business are the shifts of ‘environmental impact’ from the bottom left corner of the matrix to the top right corner, meaning that stakeholders believe that we should be doing much more to protect our environment, and the slight shift right of ‘customer vulnerability’. Although the topic of customer vulnerability has always been a priority to us, this shift shows us that a wider range of stakeholders now have a more sophisticated understanding of vulnerability and an increased awareness of the fact that any customer can become vulnerable. You can read more about what we are doing to lower our environmental impact, and the work we are doing to support vulnerable customers, in our Corporate Responsibility report.
To read more about our CR strategy, please download the Responsible business strategy section of our CR Report.
Our commitment to The Sustainable Development Goals
The Sustainable Development Goals (SDGs) are a global call to action to end poverty, protect the planet and ensure that all people can live in peace and prosperity. The 17 goals that make up the SDGs build on the success of the Millennium Development Goals but integrate and address new areas such as peace and justice, innovation and climate change.
To achieve the targets of the SDGs, working in partnership with others is crucial. Governments, businesses and communities around the world need to commit to making changes to improve life and ensure a sustainable future for generations to come, and this is why we have decided to play a part.
During 2018, we undertook two pieces of work, with the objective of identifying the Group’s ‘priority goals’, this meaning the SDGs where we feel we can have the biggest impact because they align with our blueprint, responsible business
strategy and Social Impact Programme.
Firstly, we commissioned a consultancy with SDG expertise, to undertake industry research that examined the public disclosure of 16 businesses of interest to us. Key points of interest were to determine what commitments they had made
to the SDGs, if any, as well as how they reported, or planned to report, on their progress. These businesses were made up of our competitors, our investors, relevant businesses outside of the financial services industry, and global corporations
which are considered to be leaders in sustainability.
Following this piece of research, we then undertook a series of questionnaires that compared our own corporate responsibility strategy and businessobjectives to the targets that make up the 17 SDGs, in order to determine what our priority goals could be. In early 2019, we finalised this piece of work and are putting a process in place to consult with
stakeholders across the Group to determine what our targets should be. We look forward to reporting what are our priority goals and targets are in 2020.