The Bank answers questions about its 2017 Values and Ethics Report

An August Save our Bank Facebook entry highlights a new survey from ClientEarth, which says: “The British public said quite clearly they want their banks and pension funds to avoid investments in fossil fuel projects and were surprised to learn that this might be the case.” The Co-op Bank is the UK’s only high street bank to exclude finance for fossil fuel extraction. That’s NO to coal mining, coal power, oil and gas extraction, fracking, tar sands pipelines…

Save our Bank is a campaign mounted by the Customer Union for Ethical Banking –  a co-operative, democratic member organisation that can hold the bank to account, campaign for a larger co-operative voice and buy shares in the bank to help build up the co-operative stake.

The Co-op Bank provided the following response to the four questions put to it by Save our Bank after reviewing its 2017 Values and Ethics Report. The bank has a good record of engaging with the Save Our Bank campaign as a representative of ethically motivated customers, and we appreciate them taking the time to respond. 

Response from the Co-operative Bank to the Save Our Bank campaign, 17th September 2018 (edited).

Thank you for taking the time to provide this feedback on our Values and Ethics Report and for your supportive comments. The continued success of the Ethical Policy is built on the support of informed stakeholders such as yourselves and your contribution as representatives of customers’ views is important as the Bank moves forward to a position of strength. Taking your points in turn:

  1. In 2011 and 2012, before the bank’s recent financial problems were revealed, the percentage of finance opportunities declined by the Ethics team averaged 10% of those reviewed. This year, around 3.5% of business opportunities reviewed were declined, and the average in the five years from 2013 to 2017 has also been around 3%. Can the bank comment on the reasons for this change, and can it provide details of the percentage of ethical policy applications received and declined by type over this period, e.g. for small business banking vs larger corporate loans?

This change is driven by our renewed focus on small to medium sized businesses as the key focus for our business banking -, including credit unions, social enterprises, charities and co-operatives. The size, type and nature of these businesses mean that while all business application are screened, there are fewer referrals for a higher level of Ethical Policy. Of 648 business customer referrals to the Ethical Policy Unit 2015 – 2017 89% were SMEs.

  1. The Values and Ethics Report notes that an existing customer was declined as it was involved in the fur trade. This indicates the Ethical Policy was breached in this instance – although this has been rectified, and we understand that no system can be 100% watertight. Can the bank provide more information about how long this business had been a customer of the bank, and when the businesses moved into a position of breaching the ethical policy? Does the bank consider that changes to process are needed to avoid such breaches occurring in future?

Although not a regular occurrence, it is possible for customers previously assessed as compliant with the Policy to move into a position of conflict if the nature of their business activities changes. Customer screening takes place at various times during the operation of their accounts, for instance as a result of a request for additional facilities, and not just at the account opening stage. We can’t comment on individual customers but can confirm that it during a subsequent screening that this issue came to light and the account was closed.

  1. Can the bank consider providing more detail in next year’s report on customers turned away for reasons of risk management, particularly those reviewed by the Exit Forum? For example, type of business or organisation, type of issue raised, type of reason for account closure.

While we will consider this recommendation, it is important to understand that when accounts are closed for reasons of fraud and money laundering there are legal reasons why this type of disclosure may not be possible.

  1. The report’s auditors, DNV, provide a ‘limited level’ of assurance, rather than a ‘reasonable level’ of assurance. Can the bank comment on whether a ‘limited level’ of assurance is sufficient to reassure stakeholders that the ethical policy is is being implemented to the highest standard, and on the implications of requesting a ‘reasonable level’ of assurance in future?

We believe the level of assurance provided is robust and sufficient to provide the right level of assurance for our customers.

See the replies in full here:

Save our Bank Gathering, Saturday 24th November

The annual get-together will be held in Manchester. It will be an opportunity for Save Our Bank supporters and members of the Customer Union to get together to discuss strategy for the coming year. The main theme for this year’s gathering will be ownership, and the practical steps which can be taken to campaign for and work towards returning the Co-op Bank to co-operative ownership, in whole or in part.

Details on the venue and how to register will be given in the next newsletter and on this site.





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