The Role of ‘Digitalization’ in German Sustainability Bank Reporting

Abstract

The financial services sector, particularly with respect to today’s banking industry, is aiming to make a digital transition. Sustainable reporting is a holistic new reporting approach in banking and has only become partially mandatory for the sector. Thus, this paper makes a contribution to the current analysis approach and further development of the German Sustainability Code as well as associated legal approaches. It concerns the assessment of mandatory sustainable reporting in the light of constantly changing market conditions and stricter legal requirements for stakeholder data responsibility. In specific, it focuses on a digital evolving business environment and is intended to provide an insight into the perception of the topic of digitalization in the banking sector. The assessment is based on the structure of the German Sustainability Code. Based on 113 bank reports, a multiple regression analysis of 1410 codings of the keyword ‘digital’ is carried out. The results show that banks partly and not fully address digital issues in their reporting. It transpires that the emphasis is on seven criteria, while social elements are totally ignored. The paper shows a structural inequality within sustainable bank reporting with regard to digitalization. It also shows that issues are not adequately addressed and covered in legal reporting standards and that the provision of information to stakeholders on specific issues is largely undefined.

Evaluation of the Benefits Generated by Sustainability 4.0: A Study of the Perception of Banking Sector Customers

“…The concept of sustainability in the banking sector encompasses a variety of approaches and challenges. Diener and Spacek [8] highlight that transparency is fundamental to promoting understanding of business relationships, responsibility, and decision-making, strengthening trust in companies. In this context, digitalization plays a crucial role in the transformation of financial services, leading to fundamental changes in the banking sector.…”

“…In the banking sector, historically focused on strategies aimed exclusively at generating value for shareholders and neglecting other interest groups [4], banks now face the need to adapt to environmental and social indicators. Sustainable development, as argued by [8], is not restricted to financial perspectives alone.…”

Sustainability and the Digital transition: a literature review

“…Many organizations identify such mismatch as a big to bridge gap in the business environment. However, a radical transformation that considers sustainability issues does not have to involve one big step in the planning and implementation phases [44]. Relatively, a series of incremental steps can be adopted to achieve the much-desired radical transformation.…”

Empirical Evidence of a Changing Operating Cost Structure and Its Impact on Banks’ Operating Profit: The Case of Germany

“…In recent years, for example, there has been an increasing reduction in the number of staff at financial institutions (banks); however, the actual reasons for this development have not yet been fully investigated. Nevertheless, it can be assumed that digitalisation has a fundamental influence on the positioning and management of a bank (Diener and Špaček 2020).…”