Economy
Co-operative Bank customers to have their say on ethical banking policy
The Co-operative Bank has launched a survey to gauge opinions on range of ethical issues, from responsible banking to human rights, as it seeks to “refresh” and update the content of it ethical policy.
The Co-op became the first UK bank to have an ethical policy in 1992 and has since then reviewed the policy four times. As a result of the policy, the bank says it has turned down £1.2 billion of lending because requirements were not met.
Niall Booker, chief executive of the Co-operative Bank, said, “This is an important milestone in the transformation of our bank. We have a clear vision to create a smaller, more efficient, sustainable bank focused on serving individuals and small and medium-sized business, which is set apart by its commitment to values and ethics.”
He added that the Co-op’s “heritage, ethos and values” set it apart from other banks and that is why updating its ethical policy in important.
Following the bank raising capital from lenders it ethical credentials were thrown into questions. However, the bank maintained that it would stand by its values, which were written in its constitution in November last year, and the survey suggests it is taking the commitment seriously.
Ahead of the survey launch, Booker wrote in the Guardian, that trust in the banking sector was at a low and a “trusted, effective and fair” sector was needed to address social issues and regain the public’s trust.
The bank currently has five pillars in its ethical framework – human rights, international development, animal welfare, environment and economic and social development in Britain – that survey participants will be quizzed about. In addition, respondents will also be asked about their opinion in three new areas – responsible banking, transparency and treating customers fairly.
The Save Our Bank campaign is urging the Co-op to stick to its ethical roots, and one of the organisers Shaun Fensom noted that they were “encouraged by the most recent moves” at the bank.
He added, “It seems that now they have completed the capital raising they are focused on promoting the bank as genuinely different – because they know that is the only basis on which they can compete with the big banks.
“It’s all about perception, and this could mean that customers have real influence – but only if we stay organised. The customer survey on ethics, which they will conduct this week, will be the first real test of how serious they are.”
Meanwhile, responsible banking campaign Move Your Money has also praised the steps take by the Co-op to rebuild trust. It urged other big-name banks to follow suit and put the interests of wider society at the heart of their operations.
Fionn Travers-Smith, operations manager for Move Your Money, said, “With its ethical screening policy now enshrined in it constitution, many of the things that made the Co-operative Bank attractive in the first place have actually been strengthened. Meanwhile, the bank has been unfairly victimised in the media over problems that pale in significance when compared to those of its larger competitors.”
The customer survey will run from June 12 through to June 30.
Update: Simon Howard, chief executive of the UK Sustainable Investment and Finance Association (UKSIF), commented, “Engaging with customers should be a key part of any organisation’s values strategy. UKSIF therefore welcomes the Co-operative Bank’s customer poll on banking values and ethics.
“Banks remain under scrutiny following the fall-out from the financial crisis. Excessive pay, mis-selling and poor customer service in times of difficulty has left them with the huge task of renewing their businesses to regain the trust of customers and wider society. A straightforward way to do this is to ask what customers value and need, take the feedback seriously and then use it to provide a better and more responsive service.
“The Co-operative Bank turned down £1.2bn of lending because it did not meet the requirements of the ethical policy they developed based on customers’ views. That’s what customers want – evidence they come first, a set of values they would happily champion on their bank’s behalf and a service they can trust and rely on.
“I hope to see many more banks treating customers and colleagues as key partners as they set about regaining trust. This process is essential if the sector is to flourish again, and if we are to see responsible, sustainable and inclusive economic growth for the nation as a whole.”
Photo: The Co-operative via Flickr
Further reading:
Co-op Bank: we need to protect our ethical policy
Co-op Bank seeks additional £400m after £1.5bn rescue plan
Co-operative Bank’s troubles blamed on governance