The Co-operative Bank can maintain its world leading ethical policy if customers continue their business instead of switching their account, according to the organiser behind a campaign to save the ethics.
With the Bank being owned in the majority by private investors, and the parent Co-operative Group maintaining only a 30 per cent stake, it is uncertain whether the Bank will follow the same ethical principles. Though, the Bank has revealed that ethics will be enshrined in its new constitution. But it is up to the customers to exercise pressure to ensure the bank sticks to its ethical principles, says the Rob Harrison, one of the driving forces behind the Save Our Bank campaign.
Rob Harrison, also the editor of Ethical Consumer, is encouraging customers to continue to bank with the co-operative and use their collective influence to shape its the future. Switching the account somewhere else would not help ensure the Bank’s ethical policy is preserved, he argues. Instead, customers can join the campaign to set up a “union of customers” that can negotiate with a single voice.
Since starting the Save our Bank campaign in October this year, the team at Ethical Consumer has been overwhelmed by the interest shown by individual customers as well as various organisations and charities.
“It was just ourselves saying 'this is a rare thing, we need to protect it' and wondering if anyone wanted to join in and help.”
More than 20 other organisations have joined the campaign so far, which hold significant funds within the bank. “We’re not seeking to try and dominate the discourse but to contribute to it,” adds Mr Harrison.
He believes there is an inextricable link between ownership and the Bank’s ethical policy. In the future, it is doubtful the Bank's ethical policy will survive if it continued to be owned by private investors, he adds.
Referring to the Bank’s new Recapitalisation plan, Mr Harrison says he welcomes the Bank’s commitment to annual reporting, but that customers who signed up for the campaign wanted an external audit party to assess the implementation process, not one of the big four audit firms. He says the Bank’s constitution did not include any specific references to the current ethical policy, but instead mentions an ethical code.
Every year Ethical Consumer ranks banks according to their ethical policies, the Co-operative Bank being one of the highest ranted banks. Although it was premature to say whether the Bank would be downgraded, the rankings would depend on what other activities the shareholders would be involved in, said Mr Harrison.
Mr Harrison expressed concerns that hedge funds were not sustainable on long term, but said he did not exclude the possibility of the Co-op Group increasing their stake again. Customers have suggested various other options, such as re-mutualising the bank or establishing customer trusts, similar to supporters trusts.
Other concerned customers have also proposed setting up a new bank under mutual ownership. Although these options need to be taken into consideration, Mr Harrison thinks it would be premature for customers to give up the Co-operative Bank.
“All is not lost with the Co-operative Bank; it makes sense not to reinvent the wheel or create it,” he said, encouraging customers to speak with a single voice.
“Ultimately, switching your account somewhere else is the ultimate sanction that you’ve got when things go wrong – you can only use that once — if people disappear then that’s not necessarily going to have an impact,” added Mr Harrison. “From our point of view, at the moment, the co-operative, on paper, is still an ethical bank.”
• To find out more, visit: saveourbank.coop