The Co-operative Bank now estimates that as much as a quarter of its profits can be directly linked to its ethical policies – much more than it first thought.
Last year, the UK bank worked out that between 15 and 18 per cent of its profits could be attributed to its ethical stance (EP3, issue 2), but now says this was a conservative estimate. After refining its calculation methods, it believes the figure could be as high as 26 per cent.
In its latest assessment, the bank used additional data including the proportion of new corporate and business banking customers attracted by its ethical policies in the last 12 months. Business accounts offer a higher rate of return than retail ones.
According to the bank, its ethical stance was the single most important reason cited by Business Direct customers for having an account.
The bank said: ‘We now reckon that our ethical policies are responsible for between 14 and 26 per cent of profits. The figure we have settled on is the median, which is 20 per cent.’
This suggests between £15million ($23m) and £28m of the bank’s £108m profit in 2001 can be attributed to its ethical policies.
The lower estimate is based on the proportion of business and personal customers who told the bank its ethical stance was the single most important factor in their decision to use its services. The upper estimate is based on the proportion who say it is an important factor.
The Co-operative Bank has become the first UK company to win a Corporate Conscience Award for its CSR programme. Run by US-based Social Accountability International, the awards have been in existence for 16 years.