The Ethical Business Guide: Banking that Doesn’t Cost the Earth

BANKING THAT DOESN’T COST THE EARTH
BY RUSS BRADY

THE CO-OPERATIVE BANK
ETHICAL BANKING DECISIONS HAVE THE POWER TO CHANGE LIVES FOR THE BETTER, SO BE AWARE OF HOW YOUR MONEY IS BEING USED.

It’s no secret that banks and insurers are in business to make profits. One way they do this is by taking your money and lending it to someone else at a higher rate of interest.

But what they rarely tell you is who they lend it to.

For example, your money could be supporting companies involved in the fur trade, arms dealers who supply oppressive regimes, or companies involved in the production or extraction of fossil fuels – the primary contributor to climate change.

And you wouldn’t know a thing about it.

Every bank account holder has the power to make ethical choices about how their money is used.

As a business customer you have the opportunity for this to feed into and enhance your existing corporate responsibility policy.

While you may have a strong desire to ensure your money is working for good rather than causing harm, it’s possible that you’re not sure where to start or what questions to ask your bank. To help make this potential minefield a bit easier to navigate we’ve outlined below some of the areas in which ethical banking can make a real difference.

EVERY BANK ACCOUNT HOLDER HAS THE POWER TO MAKE ETHICAL CHOICES ABOUT HOW THEIR MONEY IS USED

SEEK INVESTMENTS THAT PROMOTE AND SUPPORT RECYCLING, RENEWABLE ENERGY AND THE PRODUCTION OF SUSTAINABLE NATURAL PRODUCTS

ANIMAL WELFARE

Many people have strict guidelines on the kind of food they will eat.

For example, animal products which have been raised in a free range environment are proving increasingly popular. These ideals can be extended to banking practices, through the refusal to invest in businesses involved in intensive farming, such as caged egg production.

Similarly, it’s possible to avoid companies that undertake animal testing of cosmetic or household products or ingredients,or blood sports, which involve the use of animals or birds to catch, fight or kill each other.

With these guidelines in mind it’s possible to make an educated decision about how your business banking should impact on the world, and where it might be possible to make some extremely ethical and sustainable choices.

HUMAN RIGHTS

Here in the UK, human rights issues can often seem quite remote from our everyday lives. Yet frequently the organisations – be they governments or businesses – that abuse human rights have links to this country.

Just as individuals may choose to invest in such organisations, so too do banks. In this way, business customers may inadvertently continue to support oppressive regimes.
One way to avoid this is to check that your money isn’t invested in any government
or business which fails to uphold basic human rights within its sphere of influence, or which has links to an oppressive regime that are a continuing cause for concern.

THE ARMS TRADE

We realise that there’s an entire spectrum of opinion on the arms trade. Some people oppose the manufacture of arms full stop; others see it as a necessary evil, believing that every country has a right to use armaments in order to defend itself.

The picture is perhaps further complicated when you consider that we live in a country that’s one of the world’s largest arms exporters!

If this is an area of personal concern then you can make the decision not to invest in any business that supplies arms to oppressive regimes. We define these as being where basic human rights, as set out in the Universal Declaration of Human Rights, are denied in a systematic manner over time.

GLOBAL TRADE

We live in a globalised world and many of the goods we consume are produced overseas, where labour is often cheaper to secure. When undertaken fairly, trade has an unparalleled capacity to lift people out of poverty and enhance the quality of lives across the world. However, the day-to-day pressures of business and competition, coupled with political, cultural and economic factors, make decent labour standards difficult to guarantee.

It’s worth checking whether your money is invested in businesses that operate in developing countries. If so, are they involved in Fairtrade activities that help people to work their way out of poverty and become self-sufficient?

ECOLOGICAL IMPACT

Every year, millions of tonnes of fossil fuels, such as oil, gas and coal, are burned, producing large volumes of waste, such as CO2. The accumulation of CO2 in nature has been identified as the primary factor behind global climate change.

For that reason, the ethical banking customer may choose not to invest in organisations whose core activity contributes to climate change through the production or extraction of fossil fuels.

Other areas of concern are companies which manufacture chemicals that are persistent in the environment – an issue that has recently been the subject of a major new European law – and the unsustainable harvest of the world’s natural resources: timber and overfishing being specific areas of concern.

Instead seek investments that promote and support recycling, renewable energy and the production of sustainable natural products.

The Co-operative Bank was the first UK high street bank to launch a customer-led Ethical Policy that sets out where it will and will not invest customers’ money. The Policy also sets out the areas the bank seeks to support – these are often activities that are good for the environment or community, such as recycling and fair trade. For more information visit www.goodwithmoney.co.uk

© BLUE ROCKET AND THE GOOD FOLK 2009