Co-op Bank rejects £1 billion on ethical grounds

www.environmental-finance.com
London, 5 February:

The Co-operative Bank has turned down more than £1 billion ($1.5 billion) of "unethical" business since 1992, it announced this week, as it launched the fifth update of the standards organisations must meet to open accounts or receive loans and financing.

Over the years since its ethical policy was introduced, the UK bank has refused £465 million of business because it failed to meet its standards on ecological impacts, with involvement in the extraction and production of fossil fuels making up the largest portion of this figure, at £169 million. But the bank said its total commercial lending had grown to £4.4 billion in 2008, from £571 million in 1992.

Chief executive David Anderson said: "The bank's ethical policy has led to more than £1 billion in unethical business being declined, but it has also contributed to a massive £3.8 billion net growth in our corporate lending." The fifth iteration of the ethical policy expands the bank's screening to exclude firms involved in the distribution of fuels with a high global warming impact, such as those derived from tar sands, including tanker companies, terminals and distribution centres. It already excludes business in the extraction, production and refining of oil, natural gas and coal, as well as companies providing strategic services to these industries, such as upstream pipelines and refineries.

biofuels have also been included in the policy for the first time. The Co-operative Bank announced it will only do business with firms involved in biofuels production if they demonstrate their fuels have a greenhouse gas saving of at least 60% compared with mineral fuels and are sustainably sourced. This is a tougher limit than that imposed by the EU, which will require biofuels to demonstrate savings of 35% by 2013, rising by 2017 to 50% for existing refineries and 60% for new refineries.

The bank has also expanded its policy on animal rights, so it will not finance any activities connected with the exploitation of great apes. "They are human's closest living relatives, and have cognitive abilities and a degree of self-awareness not shown by other animals," the policy states. It also instituted for the first time a clause rejecting business from organisations that incite discrimination and hatred.

The policy is based on a survey of the bank's customers. Of the approximately 80,000 who responded, 23% said withholding finance from oppressive regimes was their top priority. Between 1992 and 2008, £104 million of business was turned down because of ties to such regimes.