Banks all over the world, if they survived the recent economic upheaval, are having to scramble for a new public image. One indicator is the number of banks signing on to the Equator Principles, a set of ethical standards relating to social and environmental aspects of development projects overseas.
Launched in June 2003 by 10 banks, the Equator Principles now have more than 60 signatories including recently the first Chinese bank. But is this ethical enough? Many non-governmental organizations think that the World Bank still dominates the international banking culture and the Principles do not go far enough.
At the other end of the scale are banks modeled on the Grameen principles, with social lending or microfinance schemes thriving on the internet as well as in more traditional forms. Websites such as Zopa and Kiva allow lenders with a social conscience to give a helping hand to those most in need, with small short term loans to specific entrepreneurs in developing countries.
And in between are the more familiar high street banks, eager to improve public relations by promoting charitable giving through their foundations, and introducing “green” banking with credit cards for example, that donate a percentage to environmental organizations.
Ethical Banks
But an eco-friendly credit card is not enough. Big banks need to show more ethical responsibility to win back public respect. An international think tank, the Medinge Group, nominates Brands with a Conscience each year and it is noteworthy that one British bank received their 2010 award.
The Cooperative Bank UK has turned away over $900 million in loans to businesses who did not meet the standards of the Co-op Ethical policy, and asks its members to vote on issues such as animal welfare, human rights and ecological impact. A Swiss-based bank, Pictet et Cie, also won an award for setting up a Water Fund and a Clean Energy Fund. These examples should encourage others to follow suit.
