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climate change
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Written by Richard Evans,
ethics etc...
Background The majority of environmentalists,
politicians and scientists consider climate change, or
global warming, to be the most pressing environmental
problem facing the planet (see figure 1). The six
warmest years in recorded history have all occurred
after 1990.i The scope of this review is to determine not
only whether the bank has taken a principled and
integrated approach to this most urgent of problems
(business is directly responsible for a third of CO2
emissionsii),
but to ask whether it has used its position
in society to urge others to follow suit. |
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| Figure 1 |
| When fossil fuels are burnt - such as coal, oil or gas -
carbon dioxide (CO2) and other gases are produced. This
CO2 is the 'greenhouse gas' considered to be the
primary agent responsible for the warming of the global
climate detected in the second half of the twentieth
century. If climate temperature continues to rise, higher
sea-levels and an increased frequency of droughts and
serious flooding are expected. |
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Operations In 1998 the bank began switching its
supply of electricity from fossil fuels to renewable
sources. Today, virtually all of its electricity is renewable
and CO2 emissions per customer account have fallen
by a very substantial 83% since 1997, at a modest net
cost to the bank of £79,000 per annum. The bank is
now one of the largest purchasers of renewable energy
in the country. In 2001 Jonathon Porritt commented,
"There are very few companies in the UK making this
kind of commitment, properly costed as part of the
bank's sustainability accounts, and it is hoped that
others will be inspired by this example."iii Another major
area of progress has been the bank's air conditioning
systems, where considerable headway has been made
to ensure that technologies and refrigerants used are
climate friendly. At considerable additional expense,
£623,100 in 2001 alone, the bank has been upgrading
its air conditioning to more expensive environmentally
sound options. In contrast to its initiative to purchase
green electricity, this has to date received little public
recognition, and in many ways is more deserving as it
sets a moral precedent that few other companies seem
willing to follow. Transport is another major contributor
of CO2 and, whilst the bank has made some progress
at reducing emissions (6% during 2001), there is still
much room for improvement. Whilst the bank
increasingly uses electronic transfer, commercially
viable alternatives to road transport for moving cash
and paper are at present very limited. The bank has
initiated only one major initiative to manage the
environmental impact of its own transport: the
replacement of its company car fleet with particulateclean
diesel vehicles, at an additional cost of £34,000.
In time this should realise a 30% reduction in the CO2
emissions of the bank's company car fleet. However,
the increase in CO2 emissions incurred by employees
using their own vehicles whilst undertaking bank
business is a concern. The bank needs to strengthen
its strategies to reduce these environmental impacts.
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products and services
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Since 1999, the
bank's ethical policy has prohibited investment in any
business or organisation that, as a core activity, relies
on the extraction or production of fossil fuels. It is likely
that The Co-operative Bank is the first and only retail
bank in the world to make such a commitment, and as
the bank's social auditor I can confirm that in all cases
referred to the bank's Ethical Policy Unit it has adhered
to its policies. In the review of the Ethical Policy this
year, some customers have asked whether the bank
should consider applying similar restrictions to
investments in private car manufacture, distribution
and servicing, including garages and petrol stations. In
addition to its efforts to 'screen out' companies and
activities that contribute significantly to climate change,
the bank has actively sought and provided finance to
organisations and technologies that provide solutions
to climate change. During 2001, the bank financed its
first solar panel array and continued to expand its lines
of credit to wind turbine and combined heat and power
producers. While recognising the value of these
projects, they still form but a small proportion of the
bank's total corporate assets. The revision of the
Ethical Policy publicly commits the bank to actively
seek and finance renewable energy production and
energy efficiency. This is highly welcome and I hope
that this commitment will translate into a rapid expansion
of the bank's activity in this area and I would urge that
the sums invested are disclosed in future Partnership
Reports. In another significant development in 2000,
the bank re-entered the mortgages market with a
series of green offerings. Every year that a customer
holds a mortgage, the bank pays Climate Care to offset
the CO2 emissions arising from each household's use
of electricity through managed forestry and renewable
energy projects. During 2001, this equated to a total
offset of 1,163 tonnes of CO2. The bank is one of only
two UK mortgage providers to make a carbon offset
commitment of this kind, and the only one that applies
carbon offset to all of its mortgages. |
| In late 2001, customers were encouraged to take part in the fourth and largest consultation on the bank's Ethical Policy.
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campaigning
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Over recent years the UK Government has consulted on, and subsequently
introduced, a series of environmental regulations and
fiscal instruments related to climate change. What has
the bank's position been on these important
developments? I have reviewed correspondence and
press coverage of the years 1998 and 2001 and can
state unequivocally that the bank has not only publicly
and privately supported the shift from a fossil fuel to a
renewable energy economy, but has done so in the
face of counter-lobbying by a number of businesses
and trade associations. For example, it was one of a
handful of businesses to support the introduction of
the Climate Change Levy. It also urged adoption of the
Kyoto Protocol at crucial stages of its development.iv
The bank, through its sustainability policy, based on
The Natural Step, its annual performance disclosures,
its involvement as a pilot in the DTI sponsored SIGMA
(Sustainability Integrated Guidelines for Management)
Project and its ethical and ecological value analysis,
has openly demonstrated that reductions in CO2
emissions need not be prohibitively expensive.
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January 2002 - Secretary of State for Environment, Food and Rural Affairs, the Rt Hon Margaret Beckett MP, presents the bank with an award for its integrated approach to climate change at the 27th BCE Awards. |
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opinion
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The steps the bank has taken to reduce
the CO2 emissions arising from its operations are
exemplary, as are its efforts to screen out organisations
contributing significantly to climate change, the green
attributes of its mortgage offerings and the upgrade of
its air conditioning systems. It has had some success
in reducing transport CO2 emissions, but much more
needs to be done; and there is considerably more
potential for it to finance renewable energy organisations
and technologies. It has used its voice publicly and
privately in a manner consistent with its ethical and
ecological policies, and should continue to do so. All in
all, the bank's activities, on arguably the most important
of all environmental issues, are significant and coherent
and provide a role model for others, within and beyond
the financial services sector.
Ethical and environmental policies and management
systems are demonstrably more effective when a
company makes appropriately audited disclosures
about its performance. The Partnership Report
involves full disclosure of the bank's performance in
relation to climate change against some eight specific
indicators. Each report states previous and new
targets, and managerial responsibility for their
achievement. |
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- www.ncdc.noaa.gov.ol/climate/research/1999/ann/ann99.html
- Climate change - Draft UK Programme (2000). DETR
- www.co-operativebank.co.uk/partnership2000/audit_commentary.html
- www.wwf.org.uk/News/n_0000000314.asp
To follow any of the links mentioned within the Partnership Report 2001, please visit the links page.
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