The Co-operative Bank has updated its ethical policy and revealed it has so far refused business worth more than £1billion from businesses which do not match their ethical criteria.
Despite turning away business on such grounds since it adopted its ethical stance in 1992, the Co-op has, in the same period, increased its total commercial lending by an average 14 per cent a year, from £571million to £4.4billion.
Some of the requests for lending which it has refused include funding for extracting fossil fuels, finance for cosmetics companies which utilise animal testing, and requests from oppressive regimes.
The Co-operative Bank
consults its customers about which companies it will and will not conduct business with, and last year it received 80,000 responses to a questionnaire from customers expressing their views on a wide range of ethical issues, such as human rights, development, ecology, and animal welfare.
Consequently, the bank has further limited the type of companies that it will deal with to include biofuels that have a particularly high global warming potential, organisations that advocate discrimination and incitement to hatred, and any exploitation of the great apes. It is also tightening its policy on the arms trade,
The Co-op, now well-known for its ethical banking
stance, revealed that despite turning down £1billion of business, its position as an ethical bank has improved its performance; customer lending was up 15 per cent in 2008, with lower bad debt charges compared to the previous year; savings accounts
deposits were up 40 per cent, and 65 per cent more current accounts
The Bank reiterated its pledge to fund £400million of positive green initiatives and £25million for microfinance, as its customers have requested. It has also reiterated its commitment to continue lending and to do so responsibly; 28 per cent of its corporate and business lending already goes to support social and environmental organisations.
"Never has it been more important that responsible lending is prudent lending and I'm pleased to say that The Co-operative Bank's Ethical Policy has stood us in good stead for more than 15 years now." said David Anderson, chief executive of the Co-operative Bank.
"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."
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