In order to gain
some indication of some of the major bank's attitudes towards the above
issues, the following banks were contacted during 2003 and asked for
their ethical policies:
Abbey National plc,
Community Relations, 2 Triton Square, Regents Place, London NW1 3AN
Lloyds TSB, Public Affairs, 25 Gresham street, London EC2V 7HN
Barclays Bank plc, Public Issues, 54 Lombard Street, London EC3P 3AH
Chase Manhattan Bank N.A., 8th Floor, Trinity Tower, 9 Thomas More Street,
London E1 9YT
Citibank International plc, PO Box 5350, 1 Hammersmith Grove, London
W6 0WT
HSBC Bank plc, 27-32 Poultry, London EC2P 2BX
Royal Bank of Scotland Group, Drummond House, P.O. Box 1727, 1 Redheughs
Avenue, Edinburgh EH12 9JN
Triodos Bank, Brunel House, 11 The Promenade, Bristol BS8 3NN.
Some of the analysis
which follows is drawn from information on the web sites of the above
banks and visitors to this site are invited to check these out for themselves:
Of all the banks
listed above, only the Triodos Bank has a highly advanced policy
on ethical investment and the introduction to its web site is worthy
of repetition here:
Your
money - Your choice
When
most people think of a bank, they think of the organisation that keeps
their money safe and secure until they need it. When most people decide
who to bank with, they consider the rate of interest they will receive,
the services they will benefit from and how easy will it be to access
their money. What most people don't think about is how that bank then
invests their money when they're not using it.
A bank's core business is to use the money savers deposit, to lend it
to someone else. With most banks you don't know who's using and benefiting
from your savings. Instead the bank is in control of your money and
decides who they will lend it to and what that money will be used for.
But if you ask the bank what they're doing with your money they won't
tell you.
A Transparent
Bank
Triodos Bank is different. We only lend to organisations which create
real social, environmental and cultural value such as charities, social
businesses, community projects and environmental initiatives. Each one
is a practical, well-grounded initiative dedicated to social aims which
benefit the community, care for the environment, respect human freedom
and develop individual talents and capacities. As part of our commitment
to transparency we publish a Project List, which details all the activities
that we finance in the UK and Ireland at the time of printing.
Positive or Negative
Many financial organisations, from high street banks to pension providers
now offer funds and schemes where you can save and invest your money
ethically, partly in response to the success that ethical pioneers including
Triodos Bank have had. Most ethical investments use negative lending
criteria. This means that the organisations that they lend money to
cannot be involved in malevolent activities such as child labour, large
scale environmental damage or the arms trade. But Triodos Bank has a
different approach - the enterprises we invest in are all actively
pursuing social, environmental and cultural goals, not just avoiding
negative activities.
With a Human
Approach
While Triodos provides opportunities for people to save and enjoy a
reasonable rate of interest, a growing number of social enterprises
need to finance their development. Many charities, social businesses,
community groups, environmental initiatives have a wide range of socially
valuable and innovative projects which need access to credit. They need
a banking partner which understands the way they work, recognises and
supports their values, and can work with them to find the right financial
arrangements for their needs.
Triodos Bank
co-workers use their expertise and judgement to assess each loan
application on its own merits, analysing a project's social, environmental
and cultural 'added value' as well as its financial performance. We
have a genuinely human approach to banking, sharing the values of the
enterprises we support and taking the time to visit and understand each
one. As a result, we support a wide variety of initiatives in many sectors,
all over the UK and Ireland, reflecting the growing strength and diversity
of the social economy.
Making a Real
Difference
Saving with Triodos Bank means that people in all parts of the UK and
Ireland can develop and build organisations which enrich their community
and safeguard the environment - building a more sustainable future for
us all.
The Triodos Bank
supports a very wide range of socially and environmentally positive
projects. The bank does appear to be actively promoting the Bhuddhist
faith and Steiner and Waldorf schools based on the (partly occult) ideas
of Rudolf Steiner and this might reflect the spiritual beliefs of those
managing the bank. Some
potential investors may wish to find out a little about anthroposophy
(Steiner's ideas) and Buddhism before they decide to use the bank. However,
the Bank does also support the projects of other religious faiths.
Other
banks lacking an advanced ethical policy
The policies of the other major banks come nowhere close to those of
the Co-operative Bank although most have policies on their environmental
performance and provide grants for social and environmental projects.
Many campaigners will remember the unethical practices of the main banks
in relation to third world debt and investments in the arms trade. The
Midland Bank (taken over by the HSBC Bank) was notorious
in this respect by having a special investment department dealing with
arms sales promotion. Therefore it is now interesting to note that the
HSBC bank has a similar policy to that of the Co-operative bank
towards arms sales:
"We avoid undertaking
certain categories of business, such as the financing of arms dealers,
traders in military equipment, countries subjected to internationally
agreed sanctions and schemes whose purpose is tax evasion".
There is an apparent
discrepancy between this statement and that in its leaflet 'HSBC:Business
Principles and Values', which is also similar to that of Barclays
Bank:
"We take a
careful and limited approach to the financing of sales of defence equipment.
We ensure that the vendor's government and other relevant authorities
have granted the necessary licences and approvals."
However, not even
the Co-operative Bank makes a wholesale commitment not to invest
in companies dealing with arms exports:
"We will not
invest in any business involved in the manufacture or transfer of armaments
to oppressive regimes"
Many investors will
be seeking to use a bank which will not invest in any company which
exports arms to any country - whether they are considered 'oppressive'
or not. Several of the major banks state that they will not invest in
any business involved in the manufacture of torture equipment or other
equipment that is used in violation of human rights.
Despite its stated
commitment to gender equality, of the 13 directors and senior managers
illustrated in the HSBC 2000 Annual Review, only one is a woman.
How this compares with other banks has not been assessed.
HSBC has
also made a commitment to the United Nations Global Compact and
the Global Sullivan Principles. None of the other major banks
appears to have made this commitment.
These principles
lack detail but provide a minimal framework for companies and banks
to set their ethical policies. However, issues such as tobacco production,
arms sales, animal cruelty and experimentation, chemical pesticide use,
genetically modified foods and many other issues which may be of concern
to many potential investors, are not mentioned.
Some of the banks offer an ethical fund and an environmental
fund (e.g.LloydsTSB). Does this alternative facility reflect an
admission that their mainsteam business is neither ethical nor environmentally
sound? General statements such as "we comply with government legislation"
or "we are committed to conducting business in an environmentally
responsible manner that protects human health, natural resources and
the global environment" are unlikely to impress anyone seriously
interested in ethical issues. Also it is not clear from some reports
whether improved in-house environmental performance is related to genuine
savings or have come about as a result of staff redundancies and the
closure of sub-branches.
Citigroup,
which has merged with the J.P. Morgan Chase Bank has come in
for some scathing criticism in a report by John Hoefle in the Executive
Intelligence Review of LaRouche Publications - U.S.BANKS
LEAD GLOBAL FINANCIAL COLLAPSE and MERGERS,
DERIVATIVES LOSSES REVEAL BANKRUPTCY OF THE U.S. BANKING SYSTEM.
Major US banks, including Citigroup, are said to be bankrupt several
times over and are rumoured to have been propped up by the US Treasury.
Morgan Chase is refered to as a "Giant casino specialising in the
derivatives market". As of June 30, 2002 it had over $26 trillion
in derivatives. A loss of 0.16% of its derivatives would be enough to
wipe out its $43 bil stockholder equity.
In March 2001 the US Federal Trade Commission filed suit against Citigroup
for abusive lending practices. Chairman of FTC, Timothy Muris has remarked
"The Commission will not tolerate the fleecing of sub-prime borrowers
through deceptive lending practices".
These banks are accused of being involved in a wave of scandals (e.g.
the collapse of ENRON and WORLDCOM) that reflects their "descent
ever deeper into unethical and even criminal behaviour in an attempt
to fleece enough money out of their customers to maintain the appearance
of solvency".
Barclays Bank
and the Co-operative Bank offer to provide their Corporate Social
Responsibility Report in the form of an audio cassette, Braille and
large print versions. This is a positive service that should be provided
by all banks.
For Barclays Bank phone 0800 400100 or EMail disability.issues@barclays.co.uk.
For the Co-operative Bank phone 0845 714 2128
The policies of
the Abbey National Group and LloydsTSB relate only marginally
to the ethical issues discussed above.
On 25th Sept
2003 the banks reviewed above were invited to comment on the information
on this page. By the 23rd Oct 2003 only the Royal Bank of Scotland had
responded.
This page was
compiled by Michael Thomas, UK Co-ordinator for the Future in Our
Hands UK
