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Ethical Banking
An ethical bank, also known as social, alternative, civic or sustainable bank, is a bank concerned about the social use of its investments and loans. Although there are differences among the main ethical banks, they share a common set of principles, the most prominent being the transparency and the social or environmental aim of the projects they finance. Some of them are specialized in microcredits. Ethical banks are regulated by the same authorities as traditional banks and have to abide by the same rules. They have to be distinguished from ethical institutions that provide certain banking services but do not meet the legal definition of bank. The name of "ethical bank" is somewhat controversial, because it seems to imply that the other banks are not ethical. However, it is the most extended denomination. Ethical banks usually work with narrower profit margins than traditional ones, and therefore they tend to have few offices and operate mostly by phone, Internet or mail.
Green Ethical Bank
Green banking is a subset of ethical banking focused on green energy, to address global warming.
Socially Responsible
Socially responsible investing describes an investment strategy which combines the intentions to maximize both financial return and social good.
In general, socially responsible investors favor corporate practices with practices in line with environmentalism, consumer protection, quality, and diversity.
Some (but not all) also avoid businesses involved in alcohol, tobacco, gambling, weapons and the military industry, and/or abortion.
Socially Responsible
Many believe social investing began with the Religious Society of Friends (Quakers). In 1758, the Quaker Philadelphia Yearly Meeting prohibited members from participating in the slave trade–buying or selling humans.
Religious institutions have been at the forefront of social investing ever since. One of the most articulate early adopters of SRI was John Wesley (1703-1791), one of the founders of Methodism. Wesley's sermon "The Use of Money" outlined his basic tenets of social investing – i.e. not to harm your neighbor through your business practices and to avoid industries like tanning and chemical production, which can harm the health of workers.
Some of the most well known applications of socially responsible investing are to avoid companies dealing or associated with products, such as, guns, liquor, and tobacco.
A picture in June of 1972 of a naked nine year-old girl, Phan Thị Kim Phúc, running towards a photographer screaming, her back burning from the napalm dropped on her village. That photograph channelled outrage against Dow Chemical and other companies profiting from the Vietnam War.
Co-operative
A co-operative is a business, but more than this, it acts together to meet the common needs and aspirations of its members, sharing ownership and making decisions democratically.
Co-operatives are not about making big profits for shareholders, but creating value for their members. Their top priority is to provide the best possible services for their members and to invest in the communities where they live. This gives co-operatives a unique character and influences what they stand for.
In this instance, the Co-operative Bank is wholly-owned by Co-operative Financial Services Ltd, whose sole shareholder is the (member-owned) Co-operative Group.
Members of The Co-operative Group are also entitled to earn dividend on their account holdings and borrowing with the Bank.
The Co-operative Bank: Ethical foremost
While the bank, like any other, is run on profitable lines, it does occasionally turn away new business which it feels may compromise its ethical policies. In the 2005/06 financial year, whilst making profits of £96.5 million, it turned away business of nearly £10 million.
In June 2005, the bank closed the account of a Christian evangelical group (Christian Voice) because of its allegedly homophobic standpoint. They said the group was "incompatible with the position of the Co-operative Bank, which publicly supports diversity and dignity". Christian Voice said the bank was discriminating against it on religious grounds. Gay Times subsequently selected the Co-operative Bank for its Ethical Corporate Stance Award.
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ETHICAL FINANCE
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TAX REBATE & CHARITY
All or any part of a tax refund due to you under the UK Self-Assessment tax system can be allocated to a charity of your choice, and paid direct by the Inland Revenue to that charity. You nominate the charity and enter the charity code number on your Tax Return at box 15.
POLITICAL INFLUENCE OF ETHICAL INVESTMENT
In 1976 the United Nations imposed a mandatory arms embargo against South Africa.
In 1971, Reverend Leon Sullivan (at the time a board member for General Motors) drafted a code of conduct for practicing business in South Africa which became known as the Sullivan Principles. These principles sought to document the practices of American companies in South Africa. Reports documenting the application of the Sullivan Principles discovered that U.S. companies were not attempting to lessen discrimination within South Africa.
Because of these reports and mounting political pressure; cities, states, colleges, faith-based groups and pension funds throughout the United States began divesting (or removing their investments) from companies operating in South Africa.
The subsequent negative flow of investment dollars eventually forced a group of businesses, representing 75% of South African employers, to draft a charter calling for an end to apartheid. While the SRI efforts alone didn't bring an end to apartheid, it did focus persuasive international pressure on the South African business community.
The Cooperative Bank
The Co-operative Bank Plc is a commercial bank trading in the United Kingdom with headquarters in Manchester, England. It is an ethical bank, and refuses to invest in companies involved in the arms trade, global climate change, genetic engineering, animal testing and use of sweated labour as stated in its ethical policy. The ethical policy was introduced in 1992. In 2002 the Co-operative Group brought the bank and Co-operative Insurance Society under the control of a newly incorporated holding society, Co-operative Financial Services Limited.
The bank was formed in 1872 as the Loan and Deposit Department of the Co-operative Wholesale Society. The main impetus behind the movement to establish a bank was the growth in the number of societies in the 1850s and the consequent problems relating to this. In 1876 it became the Co-operative Wholesale Society (CWS) Bank. The potential advantages of a co-operative bank were seen broadly. It would, for instance, be able to bring together co-operative retail societies which had surplus funds, and co-operative production which lacked the capital required for further development. The bank would provide money for expansion in a boom and help societies out during a downturn in the trade cycle, and hence insulate the movement from the vagaries of capitalism; it also provided an opportunity to be more independent of outside financial control. This was also part of the principle of mutual self-help. The bank made steady progress in the early years although it had limited ambitions, serving largely as banker to the movement, keeping balances and making loans to co-operatives. However, after the First World War, trade union business was taken on, and the first branches were opened. The aftermath of the Second World War brought about an accelerated pace of development and the Bank was particularly successful in attracting business in the public sector with local authorities. By the mid-1950s there were more than 20 bank branches and the bank began to develop along more conventional lines. In 1947 it was recognized as an authorized bank under the Exchange Control Act 1947 and hence could participate in foreign exchange business. Changing economic and social conditions, including the rise in income and associated demands for consumer credit, were a great opportunity for the bank, especially with its distinctive mix of branch and store banking and also the association of many co-operative shoppers and with semi-banking business within the stores. However, the bank had a major image problem in that not only was there low awareness of its existence but the bank suffered from its association with the retail outlets of the Co-op, which were seen as being down-at-heel. In essence, the bank’s identity was subsumed within that of the co-operative movement.
In 1971 the board of the CWS agreed to establish the bank as a separate legal entity under the Companies Act 1947 and Parliament passed the Co-operative Bank Act 1971. The whole purpose was to mark out the bank as a full member of the banking community and thus a "real bank." In 1972 the bank became a member of the British Bankers' Association and in 1974 became the first new member of the clearing house for 30 years. Ambition characterized these years — the bank promoted itself as the third force in British banking after the London clearing banks and the public sector banks, competing on a wide front within the personal sector area and seeing itself as a thorn in the side of these Goliath banking institutions. A great deal of resources were devoted to the infrastructure necessary for a national clearing bank and during this period the bank established a reputation for innovation, particularly with the introduction of "free banking" (commission-free banking for account-holders in credit) in 1973, but also with interest-bearing current accounts and pioneering links with building societies. The bank grew strongly in these years, albeit from a small base, reaching one million accounts by 1981 and reducing the dependence on Co-operative Societies which, by the mid-1980s, represented only 10 per cent of the bank’s deposits.