So, which is it for you: whales or your wallet? Do you want to save the world, or do you want financial success? Anna Laycock from Ecology Building Society is on hand to prove that the two aren’t mutually exclusive.
No doubt some will look at Ecology’s latest results – record profits, strong asset growth, savings passing the £100m milestone – and think they’re just an exception to the rule.
But this isn’t a fluke; it’s part of a trend.
Our financial performance is strong because of our principles, not in spite of them. And we’re not alone: globally, sustainable financial institutions make better returns on both equity and assets, as well as boasting a higher average growth rate than the big banks, according to the Global Alliance for Banking on Values.
Institutions across the world, including other pioneers in the UK such as Shared Interest and Charity Bank, share our intuition that an ethical approach is good for business as well as for society and the environment.
In 2012, the UK’s major banks recorded a rise in core profits of 45% – only to see it wiped out by the cost of past mistakes, including redress for the mis-selling of payment protection insurance. The practices that hiked up profits in the heady days of the credit boom now return as the ghost of a misspent past, hitting the banks where it hurts: the bottom line. Never mind that these practices have been harming our society and our planet for many years.
Throughout Ecology’s 32-year existence, we’ve always been one of the oddities; the financial institution that cares more about the planet than profit; the one that won’t offer bonus rates to tempt in new customers; the one that aligns its pricing to climate risk, not just financial risk; the one that doesn’t want to grow as fast as it possibly can.
Yet where we tread, others follow.
This year we’ve seen larger institutions launch their own energy efficiency discounts, pledge to simplify their products and end the use of bonuses based on sales targets. And in February, Barclays had the stunning realisation that the banking sector has become “too aggressive, too focused on the short term and too disconnected from the needs of customers and clients and wider society”.
We’ve always focused on the long-term, even when long-term was for most people a euphemism for low profit or slow growth. We’ve proved that isn’t true – continuing to grow throughout the financial crisis, posting record profits year-on-year, when the big banks stuttered and failed.
Thinking long-term isn’t a compromise: it’s an essential strategy for businesses who want to survive and serve a socially useful purpose. Sustainable financial institutions don’t pursue growth for growth’s sake – they grow to increase their positive impact, and do so only if their core values can be maintained.
Let’s assume that the big institutions are serious in their commitments to good corporate citizenship. Does it matter why they’re doing it?
It depends whether you want to see a shift in behaviour within the current paradigm – doing ethics and sustainability because they make money – or if you want to see a shift in what we value itself: doing ethics and sustainability because treating people fairly and conserving the environment are good things in themselves.
It’s a little like the debate about monetising natural capital – by monetising the value of sustainability, are we reinforcing the assumption that money is the only thing that matters? Similarly, campaigners argue about whether we should change behaviour within current value frames or change those frames themselves.
Polarising the debate like this can obscure the fact that motives and actions are part of a complex system, not a linear relationship, and we need to encourage any and all points of change in that system.
At Ecology, we want that system to change because, perhaps ironically for an organisation dedicated to sustainability, we’d rather we didn’t have to exist at all. We don’t want to be an oddity. We want all financial institutions to put ethics at the heart of what they do, and to focus on being socially and environmentally useful. So any sign of change in the behaviour of big corporations is a weak signal of hope for the future.
We want to see consumers take the long-term view, too. Those who save with us or borrow from us know that we don’t use headline-grabbing rates or short-term incentives; instead, we offer long-term value and fair treatment.
In an age when little trust exists between most businesses and their customers, and where money is seen as the only thing that has value, it’s understandable why many people prefer short-term gains from transient relationships with institutions. But just as businesses need to consider profit, people and planet as positively linked, so people need to recognise the relationship between their consumption choices and our long-term welfare.
There is no quick buck without a negative comeback, for businesses or for consumers – and certainly not for the planet.
Do sustainability because it’s the right thing to do, or do sustainability because it’s the right thing for your finances. It really isn’t that different. In the end, a planet that can sustain our species is a fairly fundamental precondition for prosperity.