Corporate responsibility
Sustainable development
At CFS, we have a proud history of corporate responsibility, central to which is managing and developing the business in a sustainable manner, as spelled out in our Sustainable Development Policy.
As our membership continues to grow, it is vital that we effectively communicate our values and share our success.
CFS is guided by the views and expectations of members, customers and other stakeholders, and has committed to delivering value to partners in a socially responsible and ecologically sustainable manner. Our employees have identified social responsibility as one of the five values which provide direction to CFS, and contribute to business success. The co-operative movement’s values of self-help, self-responsibility, democracy, equality, equity and solidarity are also key to CFS’ way of doing business.
The unprecedented storms of 2007, and the resulting insurance claims, are an important reminder of the effects that a changing climate could increasingly have on business. While other companies are beginning to tackle their contribution to climate change, CFS’ operations have already gone ‘beyond carbon neutral’ - offsetting 110% of our remaining carbon dioxide. We also remain the only major financial services provider in the world to secure total business certification to the ISO 14001 environmental management standard across all of our activities, products and services.
It is this kind of leadership that has seen us ranked, once again, in the Platinum Group of leading companies in three separate Business in the Community indices: Corporate Responsibility, Environment, and Community, with scores of 98% and above. Our approach to ethical finance also contributed to The Co-operative Group being recognised, in 2007, with a Queen’s Award for Enterprise in the Sustainability Development category. We are still the only financial services provider ever to have received this award (the Bank having first attained it in 2002).
Management
Situated within the Group’s Corporate Affairs department, the ethics and sustainability, and community and campaigns teams are responsible for the day-to-day management of our
sustainability agenda.
Our sustainability performance is measured against a wide range of economic, social and environmental indicators, and reported in the Group’s Sustainability Report. This annual report is considered by the Values and Principles (V&P) committee (a sub-committee of the Board), which oversees sustainability strategy, performance and management.
Social responsibility
Ethical finance
Over the years, CFS has been a pioneer in the area of ethical finance, with the unique ethical policies of The Co-operative Bank and The Co-operative Insurance launching in 1992 and 2005 respectively. Both of these were industry firsts, and seen as groundbreaking, as they are based on customers’ views about how their money should be invested.
Potential corporate and business banking customers are screened to ensure that their business practices pose no conflicts with the Bank’s ethical policy. If they do, finance is declined. In 2007, of the 348 finance opportunities assessed by our Ethical Policy Unit, 32 were found to be in conflict, and therefore turned away.
The Co-operative Insurance seeks to influence companies, encouraging the businesses in which it invests to adopt high standards of corporate governance and social, ethical and environmental risk management.
In 2007, 77% of the equity holdings by value of The Co-operative Insurance were listed on the UK stock exchange. Co-operative Insurance voted on almost 8,834 UK resolutions and voted in opposition to management in 1,053 (12%) instances.
As reported in the Bank’s latest Ethical Consumerism Report, UK consumers are increasingly taking ethical and environmental considerations into account when choosing whom to spend their money with. To better reward ethical purchasing, the Bank launched think, a credit card that offers a lower rate of interest for purchases from designated ethical partners, alongside a package of additional reforestation features.
During 2007 the Bank extended its commitment to Microfinance – the means by which low-value loans are offered to some of world’s working poor. The Bank pledged £25m to support the development of small businesses in some of the world’s poorest countries.
Concern for the community
As one of the seven co-operative principles, ‘concern for the community’ is at the core of CFS’ approach. As part of The Co-operative Group, our work in this field is far-reaching, covering five key areas: climate change, social inclusion, tackling crime, food ethics and modern co-operation.
We measure our support for the community using the London Benchmarking Group (LBG) model, which quantifies both cash and in-kind donations. In 2007, CFS contributed a total of £3.4m to charitable causes (2006: £3.7m), the equivalent of 2.2% of pre-tax profit.
The Co-operative Bank’s pioneering work with prisoners continued throughout 2007. The pilot project with Forest Bank prison provides soon-to-be-released prisoners with basic bank accounts; an often vital requirement for finding a job or securing accommodation – two factors seen as key to the reduction of re-offending.
In addition, the Bank is working with the charity Credit Action to provide financial education to prisoners. By the close of 2007, Newcastle College had successfully delivered the pilot course to six prisons. Following positive feedback, the course is now being developed further.
CFS has also partnered with Liverpool John Moores University to develop a new academic programme aimed at deepening participants’ understanding of poverty, over-indebtedness and financial exclusion. The Certificate of Professional Development in Promoting Financial Inclusion in Low Income Communities offers a staff development opportunity for youth and community workers, health visitors, and others who work with young people and adults in low income communities. The module covers a range of initiatives within the Government, community and voluntary sectors and the financial services industry.
The Co-operative Bank continues to be the largest provider of banking services to the credit union sector, providing facilities to over 60% of the British movement. Following the Bank’s work with the Association of British Credit Unions, 11 credit unions are now able to offer banking services (including a debit card, ATM withdrawals, direct debits and standing orders) to their members; the Bank providing behind the scenes service and administration. Development of the credit union current account was seen as a step-change in credit unions’ ability to address financial inclusion.
CFS’ commitment to the community has always extended beyond financial support. Employees are encouraged to take advantage of various volunteering opportunities, whether it be a team challenge, such as creating a community garden, or an individual one, such as mentoring a young person. In 2007, 610 CFS employees registered that they had taken part in volunteering activities in work time, altogether contributing a total of 5,681 hours.
Environment
The responsible management of energy, waste, transport, chemicals, water and biodiversity impacts are key to CFS’ vision of a more sustainable future. Climate change is clearly a driving imperative, and our work to tackle this has focused on energy saving, carbon offsetting, the provision of finance and renewable energy consumption and generation. More details of our approach to climate change can be found in sub-section 'ClimateWise'.
We led the switch to green energy back in 1998, and currently source virtually all of our electricity from good quality renewable sources, such as wind and water. We’re also involved with directly creating renewable energy, having developed the UK’s largest solar project at Co-operative Insurance’s head office. As a result, our greenhouse gas emissions have dropped by more than 70% against a 2002 baseline.
Where we have unavoidable greenhouse gas emissions, we use Climate Care to offset them through the delivery of renewable energy, energy efficiency and rainforest projects in the developing world. As of 2007, we also offset an additional 10%, in order to account for legacy issues. The Bank has been pioneering carbon offset schemes since 2000, and has already donated almost £1.5m to combat climate change on behalf of our mortgage customers.
Throughout 2006 and 2007, The Co-operative Bank joined forces with Friends of the Earth to campaign on the theme of climate change, as part of the Customers Who Care campaign. This call to action saw more than 22,000 customers lobby their MP on the Climate Change Bill, and monies totalling £290,000 distributed to nine climate change charities.
CFS’ commitment to combating climate change was one of the contributory factors that saw The Co-operative Group being declared outright winner at the Renewable Energy Association’s 2007 Awards. This Pioneer Award is presented to the UK organisation from outside the renewable industry that is judged to have most embraced the use of renewables and contributed most to the industry’s development. The Co-operative Group was also awarded top prize at Business Commitment to the Environment’s Environmental Leadership Awards 2007, with CFS praised by judges for the incorporation of carbon offset features into mortgage and insurance products.
Further details of how the Bank is progressing in regard to corporate responsibility issues can be found in the Group’s annual Sustainability Report.
