As reported in the press, they lost more than £1billion of potential business over the past 15 years and turned away £100 million in 2009 because the investments didn’t comply with their ethics policy. Issues surrounding human rights and the weapons trade were the main causes for deals to fail, followed by bad environmental impact and concerns over animal welfare practices.
However, their ethical stance has attracted many individual savers, with deposits increasing by 40% in recent years and balances up by 65% during 2009 alone. Commercial lending has also increased from £571 million in 1992 to £4.4billion in 2008 and £8.3 billion in 2009. Customers and companies with an ethical or environmental ethos accounted for 25% of loans and overdrafts and over 50% of their commercial deposits.
Recent reports in the financial press have also stated that ethical investments are better for investors looking to reduce long-term risk. Research by Eiris reported a 400% rise in UK-based ethical and environmentally friendly funds over the past 10 years, with a record high of £9.5 billion in December 2009 compared to £2.4 billion in 1999.
It has yet to be seen whether other banking institutions will follow the Co-Operative’s ethical approach. However, as customers become more aware of global, ethical and environmental issues it’s likely that ethics will become a greater priority.