You might be wondering why The Cooperative Bank have been described as the ethical choice on the high street. We chatted to Colin Baines from the Cooperative Bank's Ethical Policy Unit, getting his thoughts on their ethical policy, student debt and switching your account.
How is the Cooperative Bank different to other banks on the high street?
There are many respects in which the bank is just like other high street banks, in that we can offer the same variety of products and services. There is however, one important difference, that is we are the only high street bank that gives our customers a say in how their money is managed, most importantly by our ethical policy.
In Ethical Consumer magazine this summer, they described the Coop as the only bank with a credible ethical policy on the high street. What is your ethical policy and how does it work?
It is based on extensive consultation with our customers, and reflects their ethical concerns about how their money should and should not be invested. It is more than just a nice piece of paper; it dictates each and every business decision we make. New business customers are screened to ensure compliance with the Ethical Policy and if the business’s activities conflict with the policy, we will not offer our services to them. In 2005 this resulted in £10 million in lost income to the Bank.
And how did you get that information from them?
Every few years we will approach them with questionnaires, to score the present policy and to suggest new additions, we generally look for a response of over 70% of customers backing a particular issue to make it a part of the official Ethical Policy. We also do more one to one research. We will take a cross section of customers and they will be asked more in-depth questions. We will take quite a chunk of our customer base to explore what their ethical considerations are.
What issues does your Ethical Policy cover?
It covers quite a variety of issues; amongst others it covers human rights, the arms trade, global warming, global trade and animal welfare. We will make specific statements on where we will or won’t invest our customer’s money. If we take human rights as an example, we state that we will not invest in any government or business that fails to uphold basic human rights. We will not invest in any business whose links to an oppressive regime are continuing causes for concern. The policy also makes positive statements such as we seek to support businesses involved in fair trade for instance, or recycling and renewable energy.
If a young person put £50 into a Co-op account could they or you trace where it was invested and how? How specific could you be in terms of where that money would go?
We can’t follow individual deposits, pound for pound, where it comes into the bank and where it leaves the bank, but we can guarantee that all funds are invested in line with the ethical policy.
What about your student accounts?
They are run on similar lines to other high street banks, they include free banking, interest free overdraft up to £2000, Visa Delta payment card and advice on surviving student life. But instead of offering the gimmicks used by many high street banks to entice students, the Co-op has things like the ‘Customers who care’ campaign. Each year the bank campaigns on an issue related to the ethical policy. This year it was trade justice, and as a part of that we will be donating something in the region of £100,000 to be distributed among 5 trade justice charities, as voted for by our customers.
Are you concerned about the levels of rising personal debt in the UK and what kind of responsibility do you take as a bank to help people avoid getting into debt, especially students?
We don’t see debt in itself as a problem, when it is manageable. It has positives such as enabling people to buy their homes, invest in businesses etc. It is when a situation becomes unmanageable and you get irresponsible lenders taking advantage of and exploiting people who have found themselves in these kinds of positions, where they’ve got unmanageable debt. We consider ourselves very responsible lenders, we offer support for customers who experience problems. We steer customers towards such things as the Consumer Credit Counselling Service, which we also financially support. We have had a fair bit of involvement with regard to this kind of thing and financial inclusion.
How much did Coop invest/lend to businesses and governments last year?
The bank lent or invested £1.8 billion in 2004, of that 27% was judged to be making a positive contribution to society, so that’s £494 million going to public service, community, charity, cooperative or environmental related businesses.
For students and young people elsewhere, what should they be asking their high street bank in terms of finding out how ethical or unethical their policies are in terms of lending and investing? What would be the key questions?
Just asking whether they have an ethical policy is a start, and who decides what goes into that policy. If they do have one, who controls it? Is it the customer? Is the policy just a PR tool to sell accounts or is it central to the bank’s operations? How is it built into the banks internal processes? You need to ask yourself, does the policy direct how the business is run as a whole? Or is it just a PR tool?
Is it easy for people to swap bank accounts to the Coop?
All they need to do is pop into a branch or ring our armchair banking service, and basically we can do everything for you. We can arrange the transfer of standing orders, direct debits, balances. Arrange the closure of your old account, pretty much do everything for you.
If you had the opportunity to speak to thousands of young people / students, why would you say they should consider banking with the Co-operative Bank?
If they are looking to be part of the solution, not the problem, with regard to many issues from global warming, global trade and oppressive regimes, through to factory farming and cosmetic animal testing. There is only one bank that can guarantee you will not be investing in the continuation of these problems yourself, and only one bank that will give you a say in how your money is invested.