Co-operative Bank Holdings Limited

How ethical is the Co-operative Bank?

Our research explores the Co-operative Bank’s approach to a range of ethical issues, including climate change, ethical investments, nuclear weapons, lending policy, and director’s remuneration.

Below we outline some of these issues. To see the full detailed stories, and the Co-operative Bank’s overall ethical rating, please sign in or subscribe.

Politics

The Co-operative Bank is one of the banks leading the field when it comes to ethical lending and investment policies.

It has polled its customers and stakeholders regularly since 1992 to shape its customer-led ethical policy. It’s because of this policy that we have recommended the bank for many years in our finance guides.

The Co-operative Bank lost no marks in our Tax Conduct category, having subsidiaries in only two tax havens (Ireland and the Isle Of Man). These subsidiaries were dormant, so weren’t considered to be used for tax avoidance purposes.  

It does however pay what Ethical Consumer considers to be excessive remuneration to its directors, including its CEO Nick Slape who received £2.4m in 2021.

Save our Bank campaign and customer union

Due to financial problems, in 2013 the Co-operative Bank split from the Co-operative Group (which owns most Co-op-branded grocery stores). Private equity and hedge funds ended up buying up most of the bank.

In response to this, to try to prevent the bank’s ethics from falling, Save Our Bank was launched.

The Save Our Bank campaign is an independent cooperative that was set up with the aim of safeguarding the bank’s ethical policy, and returning it to cooperative ownership. While return to cooperative ownership is a difficult aim to say the least, the campaign has played an important role around the bank’s ethical policy.

It has quarterly meetings with the bank, and publishes regular newsletters on the latest news and ethical issues connected to it.

Environment

The Co-operative Bank has a policy against investing in several environmentally damaging areas, such as:

• the exploration, extraction or production of fossil fuels
• exploration or extraction of minerals using deep seabed mining
• the degradation of areas that are critical stores of irrecoverable carbon
• the manufacture of chemicals that are persistent in the environment, bio-accumulative in nature

The Co-operative Bank received Ethical Consumer’s middle rating for Carbon Management and Reporting. The bank discussed how it had cut carbon emissions in the past and would do so in future, for example stating in its 2021 sustainability report that its energy consumption had reduced 18% year-on-year. While it does report on scope 1 and 2 emissions, it doesn’t report on Scope 3 (its supply chain).

It received Ethical Consumer’s best rating for Environmental Reporting, in part because of its ethical policy which excludes many environmentally damaging sectors, and also because it discussed the impact of its use of chemicals, office paper, production of waste and other environmental aspects of its operations.

People

In regards to human rights, the bank says it has a commitment to not providing banking services to any business or organisation that for example:

• fails in its responsibility to respect human rights and all elements of international human rights and humanitarian law applicable to business
• manufactures or transfers indiscriminate weapons, torture equipment or other equipment that is used in the violation of human rights
• has business relationships with an oppressive regime
• advocates discrimination and incitement to hatred

It was listed in the campaign group Don’t Bank on the Bomb’s 2021 report as having excluded all businesses involved in producing or trading in weapons, placing it in the “Hall of Fame”.

It has operations in only one regime on Ethical Consumer’s list of oppressive regimes (Nigeria). Many banks had operations in several countries on this list, so the Co-operative Bank wasn’t marked down for having operations in Nigeria.

Subscribe to see the full detailed stories about the Co-operative Bank.

Research gathered September 2022.