The Co-operative Bank has committed to maintaining the ethical policy it has built up since 1992, and from today will also cease trading with a number of companies including payday lenders.
Following a survey of 74,000 customers and staff, the ethical policy’s wording has been updated, but it keeps within a similar focus of human rights, ecological sustainability, international development, animal welfare, and support for various types of social enterprise, including co-operatives.
Run by YouGov last June, the poll showed that 80% of customers strongly believe the Bank’s ethical approach is best demonstrated by not doing business with companies and organisations that breach the policy. The updated policy states that the Bank will now not do business with those organisations involved in irresponsible gambling and payday loans. And it will not finance companies that do not responsibly pay tax in their home countries. It will still not do business with those that harm the environment, economy or human/animal rights.
The new five pledges of the policy are: promoting and protecting human rights, including equality; supporting economic and social development in the UK; protecting the environment; supporting economic and social development overseas; and promoting and protecting animal welfare.
In addition, the Bank, which is 20% owned by the Co-operative Group and the rest by private holders, said it is proud of its co-operative roots and is committed to those co-op values. Therefore, it will seek to support the sector, which includes membership of Co-operatives UK.
Ed Mayo, secretary general of Co-operatives UK, welcomed the “bold and purposeful” policy. He said: “Not only does the policy respond to what the Bank’s customers want, but it continues to demonstrate its ethical leadership and, importantly, the Co-operative Bank’s support for co-operative and community enterprise that has always helped set it apart.”
The Bank’s ethical policy also says it will “support charities and the broad range of organisations involved in the social enterprise sector that promote social and economic development in the UK”. It will also support “community development finance institutions that help finance small businesses and social enterprises whose objectives are to protect and create employment in the most socially deprived communities and drive investment in local economies”.
In the poll, customers also called for more transparency in the Bank’s operations. As such, the policy will now provide a framework for how it operates, covering the products and services offered to customers, its relationships with external stakeholders and suppliers, and its workplace, culture and ways of working for staff.
The expanded policy also includes a commitment to campaign for social and economic change. The policy says it “believes that operating with values and ethics must go beyond simply ensuring we are ethical in how we behave as a business”.
Shaun Fensom from Save Our Bank, the campaign to save the Bank’s ethical policy, said: “We’re very pleased that the Co-op Bank has not dropped any of its existing ethical commitments under its new owners. This is something the 10,000 customers who’ve joined the Save Our Bank campaign fought hard for.
“The Bank should also be commended for committing not to finance companies that don’t pay a responsible share of tax, and for making clear it will live up to both the letter and the spirit of UK legislation – although they could go further by signing up to the Fair Tax Mark.”
But he questioned why the Bank has not addressed its ownership structure.
“What the Bank doesn’t mention in the new policy is its ownership, and there’s no getting away from the fact that it is now 80% owned by private investors, including hedge funds,” he added. “That’s why we’re planning to launch a new Customers Union, which will bring customers together to buy shares in the Bank and build a co-operative ownership stake, as well as holding management to account on its ethical promises.”
The Bank’s chief executive Niall Booker said: “We know that we still have much more to do to get the Bank back on track and we know we have made our share of mistakes in the past, but the re-launch of this policy is an important step in rebuilding the Co-operative Bank as we listen to our customers and rebuild trust.
“We began the journey a year ago by strengthening the Bank’s capital and liquidity, simplifying the business and focusing on individual and small business customers. We have made some good progress in these key areas. More recently we have begun reinvesting in the brand and successfully launched our advertising campaign focused on our values and ethics.
“The implementation of the updated ethical policy starts today. Over the coming months we will be developing our plans in some of the new areas, including the products and services we offer our customers. As part of our new approach we will be involving our customers in the development of our products.”
Laura Carstensen, chair of the Bank’s Values and Ethics Committee, added: “Major global issues still sit at the heart of what our customers care about, but they also want us to address issues closer to home. During a period of sustained austerity, it’s no surprise that customers have given greater weight to supporting economic and social development in the UK. Customers want us to support communities and businesses that improve the fabric of society.
“We have already written co-operative values and ethics into our constitution to ensure that this vital aspect of our heritage is maintained. The Values and Ethics Committee will oversee, challenge and enforce the ethical policy and later this year we will be publishing a report on the progress we are making.”
The ethical policy was developed with an independent review partner, the Institute of Public Policy Research, which analysed the poll’s findings and facilitated a detailed consultation process with key stakeholder groups and campaigning organisations.
• To view the new ethical policy and the findings of the full poll, visit http://www.co-operativebank.co.uk/ethics