The document discusses the Co-operative Bank's approach to corporate social responsibility (CSR). It provides an overview of the bank's ethical policies for investments and lending. While praising aspects of the bank's CSR efforts, it also notes some criticisms, such as a lack of transparency and detail in CSR reporting. It concludes that defining and standardizing CSR internationally could help improve legislation and performance for businesses.

2. Overview of Banking Sector’s approach to Corporate Social
Responsibility (CSR)
Review & Critical Evaluation of the Co-operative Financial Services
approach to CSR
Assessment of ‘public evidence’ available to customers/stakeholders
Review Policies and Legislation
Conclusion on how this could be used to improve the social and
environmental performance of companies.
References

3. Have a reputation for putting profit’s first
Selling consumer products to customers who can’t afford them or have
no need for them, (ECO, 2008).
Using consumer invested money in very complex high risk/reward
investments – lead to “Credit Crunch”. (Channel Four, 2008).
Investing in corporations who create a negative impact on the
environment (ECO, 2008).
Trading in 3rd World debt (ECO, 2008).
Trend to outsourcing work to foreign countries to reduce costs.
Can lead to redundancies in community and reduction in customer service
standards. (Finextra.com , 2008)

4. Co-operative Financial Services (CFS): one of the first high street bank
to create an Ethical policy based on customer consultation process
and investment criteria includes:
Human Rights, Arms Trade, Corporate Responsibility, Genetic
Modification, Social Enterprise, Ecological Impact and Animal Welfare
Voluntarily produced a Sustainability Report, first produced in 1997.
(Now mandated as part of Companies Act 2006).
Since 1992 the bank has turned down £1 billion of unethical business
“Companies with ethical, environmental or co-operative ethos
accounted for 25% of loans and overdrafts from a total of £8.3 biilion of
UK business.”
Created a demand for ‘ethical’ products
(CFS, 2010).

5. Use their influence through investment to promote their campaigns
for example the Tar pits campaign.
This level of pressure from the inside can lead to change
Recently awarded “World’s Most Sustainable Bank” by Financial Times
(CFS, 2010).

6. The Co-operative Bank has in the past invested in Glaxo SmithKline
(GSK) which has a reputation for putting profit before social
responsibility. (Schnew.org.uk, 2006).
Did not mention UK redundancies due to outsourcing arrangenents in
their company reports (Finextra.com , 2008).
The bank has been criticised for going against OFT recommendations
for consumer banking in terms of bank charges. (Thisismoney.co.uk ,
2007).
There is little evidence fom their website of CSR across their banking
range. It is mostly concerned with their Investments and Insurance
business.

7. The Co-operative Bank has a good reputation for their ethical policies
and social responsibility.
They have made mistakes but they are proactively changing their
policies to reflect customer and public opinion.
During the research for this presentation there were not many reports
that had negatives comments on their approach to CSR
Are they the best of a “bad bunch”?

8. The Co-operative bank includes a Sustainable Development section
within it financial reporting.
There is a lack of detail as to exactly how they achieve this
Ethical policy is mainly around investment
There is a lack of investment detail for their sustainable products. Their
UK sustainable product defines the investment as being 31% Sustainable
(CFS, 2010).
Due to the Data Protection Act, 1998, Banks are constrained on
reporting the reason they have turned down business.
Publish their voting record during stakeholder meetings. This provides
a greater level of transparancy for their stakeholders. (CFS, 2010).
Have a dedicated website describing their ethical policies and also
environmental and community campaigns. Also include updates in
their news section on the main website. (CFS, 2010).

9. Companies Act 2006 requires a Business Review that should include
the following, WHERE RELEVANT (Henriques, 2010):
Environmental matters
Company employees
Supplier Relationships
Social and Community matters
Study suggests compliance is an issue (Henriques, 2010). There does
not seem to be consistent reporting or guidelines to determine what
should be reported.
It would be beneficial for specific environmental laws to be included
in the reporting and enforced. For example CO2 emissions.
(Henriques, 2010)

10. International Standards and Policies
Are available and are voluntary.
Do include compliance which allows a consistent approach across
all countries and companies
These include:
ISO 14001 Environmental Management Systems. (ISO, 2010)
Companies identify their environmental risks and also
display their compliance to the required legislation and
regulation.
ISO 26000 Social Responsibility. (ISO, 2010)
Provides a framework for business’ and public sector
organisations to act responsibly in terms of the
environment and their social responsibility.

13. For legislation to work there must be some form of standard reporting
and verification of compliance
Incorporation of the international standards and policies would
encourage the development of standard reporting practices for CSR.
Corporate stakeholders must have the ability to compare their
company’s performance
Unilateral legislation per country could put companies at a
disadvantage
Cost of reporting and impact on daily operations
Information provided may sometimes be negative. Companies from
other countries may be seen to be more responsible just by not
reporting

14. Government could introduce policies that encourage uptake of International
standards.
For example, government suppliers must be ISO 14001 and ISO 29000
compliant to be awarded contracts. Applies to all including international
companies
Grants available to companies to gain compliance
Support education of companies through education on policies
Government reviews existing legislation to encourage standard reporting for
all companies
Based on ISO standards
Main difficulty to finding a solution:
Until CSR has been defined and agreed internationally, legislation is difficult.
“All are involved in activities that someone somewhere will object to, and
none go far enough in terms of positive social and environmental
contribution to satisfy all of the people all of the time.” (ECO, 2008).

15. 1. Channel Four (2008) The Ascent of Money. Off-air recording. September, 2010. TV Recording.
2. Companies Act 2006. London: HMSO.
3. Consumer Credit Directive (2008/48/EC). London: HMSO.
4. Co-operative Financial Services. (2010) Good with Money [online]. Manchester: Co-operative
Financial Services. Available from: http://www.goodwithmoney.co.uk/ [Accessed 18th October 2010].
5. Data Protection Act, 1998. London: HMSO.
6. The Ethical Company Organisation (ECO). (2008) Ethical Banks and Building Societies [online]. London:
Ethical Company Organisation. Available from: http://www.ethical-company-organisation.org/154-
183-GSG09-money.pdf [Accessed 18th October 2010). Extracted from the book : The Ethical Company
Organisation. (2008) The Good Shopping Guide. 7th Edition. Ethical Marketing Group.
7. Finextra.com (2008). Co-op and Steria offshoring prompts industrial action threat [online]. London:
Finextra.com Available from: http://www.finextra.com/news/fullstory.aspx?newsitemid=19193
[Accessed 18th October 2010].
8. International Standards for Organisations (ISO). (2010) Management and Leadership Standards
[online]. Geneva: ISO. Available from:
http://www.iso.org/iso/iso_catalogue/management_and_leadership_standards.htm [Accessed 18th
October 2010].
9. Thisismoney.co.uk (2007). ‘Ethical’ Co-op blasted over bank charges [online]. London:
thisismoney.co.uk. Available from: http://www.thisismoney.co.uk/savings-and-
banking/article.html?in_article_id=426929&in_page_id=7. [Accessed 18th October 2010]
10. Professor Adrian Henriques, Middlesex University. 2010. The Reporting of Non-Financial Information
in Annual Reports by the FTSE100. CORE Coalition.
11. Schnew.org.uk. (2006). Ethical Cleansing – Co-op shopped over ‘Ethical Banking’ [online]. Brighton:
SchNews. Available from: http://www.schnews.org.uk/archive/news539.htm [Accessed 18th October
2010].