The Co-operative Bank’s ethical image has taken a hit in recent weeks, after being placed at the centre of events including the collapse of a deal to take over 632 Lloyds branches and the unveiling of a rescue plan to plug a £1.5 billion shortfall in its balance sheet. For some customers, it has all been too much, including Jo Owen, who writes about why she’s ditching the bank for Nationwide.
Eighteen months ago I made the decision to switch my current account away from Santander (where I experienced poor customer service and constant attempts to sell me unwanted products), to the Co-operative Bank, the flagship of ethical banking. And yet, here I am, in the middle of opening another new account, this time with Nationwide.
Although I’m not closing my Co-op account, I am moving everything across to the new account, so the Co-op is effectively losing my business. Why? Well, in May this year the news broke that the Co-op are in serious trouble.
There is a massive capital shortfall in its accounts, possibly as much as £1.8 billion. This ‘black hole’ was caused by the Co-op’s takeover of the Britannia in 2009. Britannia was struggling with a large portfolio of bad loans, and the Co-op had to absorb these into its own accounts.
This news followed the announcement in March that the proposed Co-op takeover of 632 Lloyds branches had collapsed, and the bank had suffered a surprise fall in profits of £634m in the 2012 financial year. To cap it all, in May the ratings agency Moody’s downgraded the Co-op’s credit rating by an incredible six notches to ‘junk’ status as a result of these figures.
All this bad news left me shocked and baffled – how could the Co-op allow itself to be dragged into this unholy mess?
When I joined the bank, it was with a feeling of (it has to be said) rather smug satisfaction that I was getting my money out of the so-called casino banking system, where customers’ money is effectively used to gamble on the stock markets. I had long ago realised that the big banks no longer had their customers’ interests at heart; it was all about profit and huge payouts for their directors.
The Co-op seemed like a haven of good sense and ethical business practice, where customers’ deposits and investments were as safe as they can be in an uncertain financial climate. It all sounds very naive now, doesn’t it?
If we look more closely at the Britannia deal, it is clear that the Co-op’s directors were also somewhat naive in taking on a business that was in serious trouble. Britannia had been forced to write off bad debts of more than £40m shortly before the takeover, and then assured the Co-op that its commercial property portfolio (which had caused the problem) was ‘low risk’. As we now know, that was clearly not the case; hence the huge increase in the Co-op’s losses.
This all serves to underline just how precarious a state our banking system is in. The fact that a bank in a good state of financial health can be brought down by the debts of another institution shows how intertwined everything is.
It seems all but impossible for any bank to keep itself completely free of the mountain of bad debt which is threatening to bring down so many banks around the world. Surely if one bank falls, many others will follow as a result.
The news on Tuesday that Barclays bank has a £12.8 billion shortfall in its accounts (a far greater figure than had been expected) is just another example of this instability.
My feeling is that most people are only just waking up to this situation, but far too many are happy to ignore it and carry on as before; their money sitting in banks which are in turn sitting on huge piles of debt.
While the Co-op may well stagger on in some form, it can no longer be held up as a shining example of ethical banking, particularly as it has announced that some of its bondholders may have to accept a loss on their holdings. It’s becoming increasingly difficult to know where to put your money, which is why credit unions are looking a better option almost by the day.
My decision to open a Nationwide account was based in its status as a building society, in the hope that its first duty is towards its customers and not its directors’ bonuses. As I mentioned at the start, I’m not closing my Co-op account as I feel that it’s prudent to have more than one account these days; if one bank has so-called ‘IT glitches’ you have another one to fall back on.
All this goes to show that it may be easy to switch accounts, but the hardest part is knowing where to switch to. Ethical banking is not the simple choice that it used to be, but credit unions will surely benefit, as will building societies. Let’s hope they are up to the challenge.
Jo Owen is a part-time volunteer with the Birmingham Museum Trust, and has worked mainly in the voluntary/public sector as an administrator and housing adviser.
5 Easy Things You Can Do to Make Your Home More Sustainable
Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.
1. Weather stripping
If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.
Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.
Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.
2. Programmable thermostats
Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.
Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!
3. Low-flow water hardware
With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.
Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.
Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.
4. Energy efficient light bulbs
An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.
New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.
5. Installing solar panels
Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.
Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.
From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!
These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.
How to Build An Eco-Friendly Home Pool
Swimming pools are undoubtedly one of the most luxurious features that any home can have. But environmentally-conscious homeowners who are interested in having a pool installed may feel that the potential issues surrounding wasted water, chemical use and energy utilized in heating the water makes having a home swimming pool difficult to justify.
But there is good news, because modern technologies are helping to make pools far less environmentally harmful than ever before. If you are interested in having a pool built but you want to make sure that it is as eco-friendly as possible, you can follow the advice below. From natural pools to solar panel heating systems, there are many steps that you can take.
Choose a natural pool to go chemical free
For those homeowners interested in an eco-friendly pool, the first thing to consider is a natural pool. Natural swimming pools utilise reed bed technology or moss-filtration to naturally filter out dirt from the water. These can be combined with eco-pumps to allow you to have a pool that is completely free from chemicals.
Not only are traditional pool chemicals potentially harmful to the skin, they also mean that you can contaminate the area around the pool if chemical-filled water leaks or is splashed around. This can be bad for your garden and the environment general.
It will be necessary to work with an expert pool builder to ensure that you have the expertise to get your natural pool installed properly. But the results with definitely be worth the effort and planning that you have to put in.
Avoid concrete if possible
The vast majority of home pools are built using concrete but this is far from ideal in terms of an eco-friendly pool for a large number of reasons. Concrete pools are typically built and then lined to stop keep out any bacteria. This is theoretically fine, except that concrete is porous and the lining can be liable to erode or break which can allow bacteria to enter the pool.
It is much better to use a non-porous material such as fibreglass or carbon ceramic composite for your pool. Typically, these swimming pools are supplied in a one-piece shell rather than having to be built from scratch, ensuring a bacteria-free environment. These non-porous materials make it impossible for the water to become contaminated through bacteria seeping into the pool by osmosis.
The further problem that can arise from having a concrete pool is that once this bacteria begins to get into the pool it can be more difficult for a natural filtration system to be effective. This can lead to you having to resort to using chemicals to get the pool clean.
Add solar panels
It is surprising how many will go to extreme lengths to ensure that their pool is as eco-friendly as possible in terms of building and maintaining it but then fall down on something extremely obvious. No matter what steps you take with the rest of your pool, it won’t really be worth the hassle if you are going to be conventionally heating your pool up, using serious amounts of energy to do so.
Thankfully there are plenty of steps you can take to ensure that your pool is heated to a pleasant temperature while causing minimal damage to the environment. Firstly, gathering energy using solar panels has become a very popular way to reduce consumption of electricity as well as decreasing utility bills. Many businesses offer solar panels specifically for swimming pools.
Additionally, installing an energy efficient heat pump or boiler to work in conjunction with your solar panels can be hugely beneficial.
Finally, it is worth remembering that there are many benefits to investing in a pool cover. When you cover your pool you increase its heat retention which stops you from having to power a pump or boiler to keep it warm. This works in conjunction with the solar panels and eco-friendly heating system that you have already had installed.
Additionally, you cover helps to keep out dirt and other detritus that can enter the pool, bringing in bacteria. Anything that you can do to keep bacteria out will be helpful in terms of keeping it clean.