Approach & Reporting Challenges & Responses
Challenges & Responses
Credit Suisse was faced with numerous challenges in 2015.
Challenge: Credit Suisse has said for years that it was well capitalized but then carried out a capital increase in fall 2015. Why was this additional capital needed?
Response: We have completed a capital increase to ensure we have a strong capital position to implement our new strategy, capture the most promising growth opportunities and be prepared for future regulatory changes. The capital increase was approved by approximately 95% of Credit Suisse’s shareholders. In addition, we intend to implement actions to strengthen our internal capital generation, including right-sizing our investment bank, reducing fixed costs and winding down our non-core assets.
Challenge: Which steps is Credit Suisse taking to address the advances in digitalization and its impact on client needs?
Response: The evolving digital landscape is one of several factors transforming the way clients interact with their bank. As clients increasingly seek access to mobile banking services in real time, the expansion of digital services has become an important topic for all financial institutions. Credit Suisse is in the process of enabling a digitally empowered business and service model. As part of these efforts, we implemented a new digital private banking platform for clients in Asia Pacific in March 2015 to provide them with continuous access to portfolio intelligence, customized market insights and trading tools. We also launched a new mobile and tablet app with a broad range of functions and services in Switzerland in April 2015. Going forward, we plan to further enhance digital forms of client interaction with the bank and to roll out an expanded digital platform in Switzerland, beginning at the end of 2016 and continuing throughout 2017.
Challenge: Credit Suisse works with a number of suppliers from a broad range of sectors, some of which may potentially face challenges with regard to environmental and social issues. Which measures is the bank taking to manage the associated risks in order to prevent negative social and/or environmental impacts on its supply chain?
Response: Our Code of Conduct for Suppliers defines our requirements relating to business integrity and ethics, environmental protection, and labor and social standards, as well as general business principles and management systems. These requirements may go beyond local legislation in certain cases. A dedicated “Know Your Supplier” process has been established to identify and assess environmental, labor and social risks, as well as other risk aspects that may be related to the goods and services we procure. It forms an integral part of the procurement process and examines aspects such as the environmental and employment standards of our suppliers and service providers. Risks are assessed using a range of criteria, and risk mitigation measures are implemented where necessary.
Challenge: In 2014, Credit Suisse signed up to the UN’s Principles for Responsible Investment (PRI) – a voluntary, investor-led framework that helps signatories to better understand the implications of sustainability and incorporate environmental, social and governance information into investment decisions. What steps is Credit Suisse taking to implement the PRI?
Response: As a signatory to the PRI, we emphasize our commitment to acting in the best long-term interests of our clients by incorporating ESG criteria into our investment processes and decisions. In addition to financial data, investment managers also look at non-financial ESG information to gain a more complete picture of a company and its operations, thus reaching more informed investment decisions. In line with our commitment to PRI and ESG integration, Credit Suisse has also developed capabilities to screen the carbon intensity of equity investments. Our approach to carbon screening was described in a research brief titled “Investing in Carbon Efficient Equities” and released in fall 2015 in the run-up to the United Nations Climate Change Conference (COP 21) in Paris.
Challenge: In the face of ever fiercer competition from other financial centers around the globe, what contribution did Credit Suisse make toward further strengthening Switzerland’s position in 2015?
Response: During the year, Credit Suisse once again actively engaged in a dialogue with politicians, regulators and legislators in Switzerland to support the development of a strategy to preserve the competitiveness of the financial center. We also participated in discussions about appropriate financial market regulation and the need to ensure that favorable framework conditions in Switzerland – such as legal certainty, the tax environment and the available infrastructure – are preserved. Other important topics addressed in 2015 range from measures to stabilize Switzerland’s relationship with Europe in order to secure long-term access to third markets for Swiss financial institutions, the establishment of an international renminbi hub in Switzerland and the need to intensify investments in the fintech sector.
Challenge: As a committed partner to Swiss businesses, how did Credit Suisse support companies such as export-oriented SMEs that were impacted by the abolition of the minimum EUR/CHF exchange rate in January 2015?
Response: The decision of the Swiss National Bank (SNB) on January 15, 2015, to discontinue the minimum exchange rate of CHF 1.20 per euro resulted in a significant strengthening of the Swiss franc and dramatically altered the market environment for Swiss companies. Export-oriented firms with direct exposure to the euro were particularly affected, as was the tourism industry. Credit Suisse helped these companies to navigate this challenging period by advising them on how to manage their finances efficiently and offering support in the form of cash management, credit, leasing and factoring. It also advised them on currency management. In addition to these measures, many companies took steps to diversify their business abroad or developed new markets. With its strong international network and extensive expertise, Credit Suisse supported them in connection with acquisitions or partial sales and assisted them in their foreign business dealings by providing trade financing and other services.
Challenge: How can we combine our economic and social commitments with our efforts to foster the individual development of our employees and our corporate culture?
Response: We not only provide our partner organizations with financial contributions but also with the expertise of our employees. Our new Board Training Program, which started in the US and was rolled out globally in 2015, helps interested employees to prepare for their role as members of the boards of charitable organizations as well as with the referral of such mandates. The Global Citizens Program enables employees to develop their personal and professional skills in the context of international assignments with our partners. Programs such as these lead to stronger partners, employees and corporate culture.
Challenge: Make responsible use of resources and ensure that our work is performed by employees in the most appropriate locations. What impact does this have on the structure of the company?
Response: In view of the ongoing transformation of the financial services industry, as well as low interest rates and rising costs, we transferred additional services from regional headquarters to our captive Centers of Excellence (CoEs) around the world in 2015. This meant that we reduced the number of positions in regional headquarters while at the same time moving functions and services to our captive CoEs, which now account for 19% of our workforce. Targeted training to further enhance the expertise and management skills of our employees provides increased career development opportunities and helps us to attract and retain the best talent for our CoEs, actively strengthening their role by assigning them functions with greater responsibility.
Challenge: With the Sustainable Development Goals (SDGs), the UN adopted the core element of its ambitious and transformative 2030 Agenda for Sustainable Development in 2015. The SDGs encompass a number of goals linked to environmental sustainability. How is Credit Suisse applying this important framework to its business model?
Response: The SDGs consist of 17 goals and 169 targets that apply universally to all nations. As a global financial institution with a strong regional focus, Credit Suisse can contribute to the SDGs in a variety of ways. With regard to environmental sustainability, for example, we seek to use our expertise in the area of capital market transactions or investment solutions to support the development of technologies for renewable energy, and we offer products to clients that invest in the conservation of natural ecosystems. We also take measures to further improve the energy efficiency of our buildings and our real estate investment portfolio. Our publication “Aiming for Impact: Credit Suisse and the Sustainable Development Goals” presents case studies of how we address these challenges.