BANKS in the UK and Ireland must do more to address the impact they have on society and the environment if they are to regain public trust after the financial crisis, a new report by the Ecumenical Council for Corporate Responsibility (ECCR) says.
Launching the report, The Banks and Society: Rebuilding trust, in Birmingham on Tuesday, the Bishop of Birmingham, the Rt Revd David Urquhart, said that society needed to ask the right questions about the financial system in order to make economic life as good as possible.
The report, which is sponsored by CCLA Investment Management and is published in association with the Better Banking Campaign, examines the impact that the activities of banks have on customers, employees, and communities. It raises issues such as the business model operated by some banks which “excludes some individuals and businesses from accessing financial services, especially in disadvantaged areas”; lobbying by banks on public policy which “is far from transparent”; loans to “environmentally and socially destructive projects”; and “non-payment of tax due and non-compliance with the spirit of taxation law”.
The lead writer of the report, Suzanne Ismail, said that “most [banks] do not integrate social and environmental issues into their business activities or behave with enough transparency for outsiders to make informed ethical judgements.”
The report recommends that banks are “more transparent about the interest rates they offer and charge” and that they “strengthen the way they monitor and rectify complaints”. Proposals to address the financial exclusion of socially disadvantaged people include: publishing “information . . . on alternative identification allowed for new customers”; being “more transparent about penalty charges”; and doing “more to support . . . community financial institutions”.
The report also recommends that banks take action on tax avoidance by reporting “on a country-by-country basis on all taxes they pay on their profits”, and make their lobbying of government more transparent.
A spokesman for the Better Banking Coalition, Damon Gibbons, said: “Banks need to respond positively to the challenges outlined in ECCR’s report and provide clear information on how they will support economic recovery at both the national and local levels.”
ECCR will submit the report to the Government’s Independent Commission on Banking.