By Gemma Childe on 23rd Apr 2012
Banks should focus more on two neglected Ps - people and planet - but less on the third P - profit - if they want to benefit financially, according to a new report.
The Global Alliance for Banking on Values (GABV) report states that good corporate responsibility can deliver better returns for banks.
GABV, a coalition of 15 of the world’s most sustainable banks, compared the performance of 17 “values-driven” organisations with 29 of the largest, most influential mainstream ones, in its study, called Strong, Straightforward and Sustainable Banking.
The research was part-funded by the US-based benevolent organisation, the Rockefeller Foundation.
Heather Grady, the foundation’s vice president said: “The new findings demonstrate that a different approach to banking – one in which the focus is on social and environmental benefit for vulnerable people – can bring comparable financial returns to the traditional banking model.”
Peter Blom, chairman of the GABV and CEO of Triodos Bank, Europe’s largest sustainable bank, added: “Our banking industry has an unprecedented opportunity to change, to help meet some of the greatest social and environmental issues of our time.
“This report shows that doing good is beneficial for banks not just in a theoretical and ethical sense, but also financially, when measured against conventional benchmarks such as the financial bottom line.”
March was Move Your Money month in the UK, an ethical banking campaign encouraging people to move their money away from large, often unsustainable, high street banks.
Five of the most ethical banks are Triodos, the Co-operative, Smile, Nationwide Building Society and Ecology Building Society, which all boast environmental and social issues as high on their business agendas. Barclays, Goldman Sachs and the Royal Bank of Scotland have all been highlighted for their unethical business practices in recent months and were included in the 29 banks that were not regarded as having good morals.
Mr Blom added: “The findings are crucial for a global banking industry which has tremendous potential to affect positive change through its ability to lend money to finance entrepreneurs and stimulate local economies. Most importantly, it shows that a sustainable approach to banking offers all of us the prospect of a stable, prosperous future.”