THE Co-operative Bank has revealed that it lost £ 4.38 million worth of business last year due to its principled stance on ethical trading.
According to its recently-published Partnership Report, the bank refused to deal with a number of companies as a result of ethical and ecological considerations. However, on the plus side, the report's annual customer value analysis shows that the bank's ethical ethos was worth £ 30 million last year or up to 24 per cent of its bottom line profit of £ 122.5 million.
The bank cannot name the companies it has turned away, though ? for the first time ? it has disclosed the rationale behind its decisions and revealed what it cost in lost income.
In 2002 alone, refusing to provide banking services to companies involved in fossil fuel extraction cost the bank £ 1.13 million in lost income. Declining to do business with arms businesses that supply oppressive regimes lost it more than £ 240,000 and turning away business for animal welfare reasons cost more than £ 157,000.
The bank also turned away business from companies and organisations associated with exploitative labour practices, nuclear power, deforestation and genetic modification, costing a total of £ 673,000.
Director of Corporate Affairs Simon Williams said: "We decided to reveal this level of detail in response to requests from our customers, who wanted to know more about what business we are turning away.
"I think it demonstrates that, while our ethical stance clearly leads to lost business, the customer value analysis shows that it has a very positive impact on our overall profits. About a third of all new personal customers join us precisely because we are prepared to turn away certain sorts of business and also go out of our way to attract others."
The Partnership Report sets out in detail the bank's financial, social and ecological performance. The report highlights that of the 64 improvement targets set last year, the bank has fully achieved 45, made acceptable progress against 11, and has not yet achieved eight.
However, the 94-page report pulls no punches on the targets that have not been achieved. For instance, the bank has yet to address the rapid growth in paper consumption arising from printed copies of electronic messages (copier paper usage has increased by 24.2 per cent since 1998). However, it has been much more successful at reducing the volume of marketing literature, which was down 231 tonnes (23 per cent) in 2002 alone.
Among the targets achieved was the development of the UK's first "green" branch, which uses electricity from 100 per cent renewable sources, sustainable timber and pollution eating plants.
In the bank's annual employee survey, staff showed high levels of satisfaction in the Co-op Bank as an employer, though fewer staff said they were satisfied with their pay and benefits, even though total remuneration increased.
During 2002 the number of staff from ethnic minorities increased from 2.5 per cent to 3.5 per cent, but this still means that the bank is not fully representative of the local communities in which it is based.