Co-operative Bank boycotts non-ethical investment funds

21 May 2008 / by Rachael Stiles
The Co-operative Bank rejected £10million of loan applications last year on the grounds that they did not fit in with their views on human rights.

The bank – which has garnered attention for being strongly inclined towards ethical investments– has been boycotting some sovereign wealth funds because of the human rights records of their controlling regimes and ecological footprint.

The Co-op, which has been turning down business in line with its ethical policy since 1992, declined to name the funds, but those which it has blacklisted are thought to include multibillion-dollar funds controlled by Saudi Arabia, Dubai, Quatar and China.

A total £14million of profits were sacrificed last year, the bank said, as a result of rejecting investments on the grounds of ecological or ethical issues, a 20 per cent increase on the £11.7million that was sacrificed in 2006.

Of this figure, 37 per cent was rejected on human rights grounds. Some of the instances which caused the Co-op to reject a company on human rights grounds included links to an oppressive regime, being involved in the production of military equipment where there was evidence of supply to oppressive regimes, and questionable labour conditions.

Animal welfare violations accounted for 30 per cent of the rejected revenue, where there was evidence of cosmetics manufacturers engaging in animal testing and businesses engaged in the retail of fur products.

The Co-op rejected 25 per cent of these profits as a result of a company's ecological impact, where there was denial of profits made from a multinational oil corporation, a business engaged in the production of unsustainable chemicals, and a flooring company which was using wood products from vulnerable species.

Whist the bank's stance results in some business being turned away, the Co-op has revealed that almost 60 per cent of deposits and 28 per cent of loans made a positive contribution to society last year.

David Anderson, chief executive of the Co-operative Bank said that the figures "clearly demonstrate that, despite tightening markets, there has been no relaxation in the implementation of the bank’s Ethical Policy and we continue to turn business away that conflicts with our customers’ concerns.

"Despite these actions, the Bank’s corporate business goes from strength to strength with a growing proportion of corporate customers coming from sectors that make a positive contribution to society."

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