At the heart of ethical banking is structure, not screening – On the Co-operative Bank’s new ethical policy

January 20, 2015



The Co-operative Bank’s relaunch of it’s ethical policy follows a huge level of response from its customers, and demonstrates just how much demand there still is for ethical banking on the high street.

It remains the only customer-driven ethical policy to be implemented by a high-street bank, and has seen the Co-operative turn down £1.4 billion of lending since it was implemented.

Having embedded the ethical policy into its constitution late last year, the latest iteration furthers the bank’s commitments to ethical lending and investment principles, by expanding to exclude companies involved in UK tax avoidance, payday loans companies, and fracking companies.

The Co-op should be applauded for strengthening and expanding its ethical approach, particularly in the areas of tax, social justice, and in seeking accreditation to the Living Wage.

That said, the cornerstone of ethical banking is sound management, and ownership structures that prioritise the interests of people and planet, rather than simply extracting profit.

Our bank ranking scorecard measures banks on a number of areas, which on the one hand includes loans and investments, but on the other hand also looks at how they treat customers, how honest the bank is, and the benefit the bank gives to the wider economy and society at large.

The Move Your Money scorecard shows that until it strengthens in these areas, The Co-operative Bank will fall short of its ethical aspirations, despite a progressive approach to lending that still places it leagues ahead of the UK’s biggest banks.

As a result, the ownership structure of The Cooperative Bank, which is now majority owned by US hedge funds and which was never truly a co-operative in the first place, needs to be placed back on the agenda if we are to see a real and deep-seated improvement from the bank in the longer-term.


<< Go back