www.ethicalconsumer.org EC172 May/June 2018 £4.25

Can you see where your money goes? We rank finance companies on their transparency

Product guides to: Current Accounts Savings Accounts App Banks Ethical Pensions Home & Car Insurance Ethical Investment Funds

Plus: Company responses to the Modern Slavery Act Contents ethicalconsumer.org MAY/JUNE 2018

who’s who p34 product guides this Issue’s editors Rob Harrison, Jane Turner, Josie Wexler finance special proofing Ciara Maginness (littlebluepencil.co.uk) 15 directors’ pay writers/researchers Jane Turner, Tim Hunt, Leonie Nimmo, Rob Harrison, Heather Webb, Anna Clayton, 16 BankTrack Joanna Long, Josie Wexler, Ruth Strange, Mackenzie Denyer, Clare Carlile, Francesca de la Torre 17 Save Our Bank regular contributors Simon Birch, Bryony Moore, 24 Banking on Climate Change Shaun Fensom, Colin Birch design and layout Adele Armistead (Moonloft), Jane 25 Don’t Bank on the Bomb Turner 43 crowdfunding cover © Anon Luengwanichprapa | Dreamstime.com cartoons Marc Roberts, Andy Vine, Richard Liptrot current accounts ad sales Simon Birch 10 introduction subscriptions Elizabeth Chater, Francesca Thomas p54 press enquiries Simon Birch, Tim Hunt 12 score table & Best Buys enquiries Heather Webb web editor Georgina Rawes thanks also to Eleanor Boyce, Ashraf Hamad, Josh savings accounts Wittingham, Jess Aurie 18 building societies All material correct one month before cover date and © 19 cash ISAs Ethical Consumer Research Association Ltd. ISSN 0955 8608. 20 score table & Best Buys 23 credit unions Printed with vegetable ink by RAP Spiderweb Ltd, c/o the Commercial Centre, Clowes Centre, Hollinwood, Oldham OL9 7LY. 0161 947 3700. app banking Paper: 100% post-consumer waste, chlorine-free and 26 score table & Best Buys sourced from the only UK paper merchant supplying only recycled papers – Paperback (www.paperbackpaper.co.uk). home & car insurance 28 underwriters as big investors Retail distribution is handled by Central Books on 0845 458 9911. Ethical Consumer is a member of INK 30 score table & Best Buys (independent news collective), an association of radical 32 eco insurance and alternative publishers - www.ink.uk.com.

We are a Living Wage employer, a multi-stakeholder ethical pensions co-op, and Fair Tax Mark accredited. news 34 divestment 06 food & home 36 score table & Best Buys plastic bottles, latte levy, krill, ethical investment funds Bayer Monsanto, teabags, Carex about the advertisers and palm oil, kangeroo meat 38 three questions you should ask ECRA checks out advertisers before accepting their ads 08 fair tax mark 40 score table & Best Buys and reserves the right to refuse any advert. Covered in previous Product Guides: Co-operative AMT certified, new staff phone & broadband (145), Ecology Building Society 09 boycotts (172), Kingfisher Toothpaste (165), Triodos (172), regulars the NRA, Constellation Brands, Vegetarian Shoes (162), Windmill Organics (166). World Cup Other advertisers: Abundance, Castlefield Partners, 52 subscriptions Green Building Store, Green Stationery, Infinity 45 ethical novice take out a subscription or give a Wholefoods, Investing Ethically, Medical Aid For the trials and tribulations of Palestine, Oikocredit, Railway Kids, Rhizome, gift that lasts a year banking ethically Womankind, YnNi Teg. 53 letters 47 clothes a regular forum for readers’ views Ethical Consumer Research dirty fashion, Bangladeshi Accord 54 inside view renewal, Measuring Fashion Association Ltd community ethical shares Unit 21, 41 Old Birley Street, Manchester, M15 5RF 48 climate t: 0161 226 2929 (12 noon-6pm) fracking actions, opencast e: [email protected] for general enquiries rejection, climate lawsuits [email protected] for subscriptions. features Follow us: @EC_magazine 49 beyond consumerism Worldwide Opportunities on 50 the modern slavery act Ethical Consumer Magazine Organic Farms (WWOOF) are companies complying?

 Editorial ethicalconsumer.org MAY/JUNE 2018

Jane Turner Editor

The future of finance A Tobin Tax, long supported by Ethical Consumer, has the capacity to structurally address the disturbing The reputation of global financial firms was already poor levels of inequality observable across the world today. It before the crash of 2008. Since then bankers remain at has been vigorously opposed at every turn by financial the bottom of lists of trusted professionals along with companies whose myopic short-term self-interest 1 politicians, journalists and estate agents. State-owned reinforces the growing lack of trust in financial firms banking and community banking is rightly back on the generally. agenda of the UK’s parties of the left. Global financial firms have been without a moral compass for too long, For responsible companies, which argue that they their impact on humans, the environment and animals are long term investors, the effect would be relatively is simply not sustainable, and their credibility is wearing minor compared with the effect on short term traders thin. and dealers focused solely on price. For the financial companies in this report which are beginning to develop As part of the product guides in this issue there a reputation for more rather than less responsible is an article on page 10 entitled “A call for greater behaviour, this is the last piece of the jigsaw that needs transparency”. In it we have a glimpse of how this loss of to fall into place for them to become properly part of the moral direction might be rectified, using feedback loops solution we all need. where shareholders and customers can call companies to account on myriad specific issues. Only a few Extra guides on the web companies in this sector deliver fully on what we want, including Triodos Bank and WHEB Asset Management. See our website for further guides to business accounts, And though these two are small, they are financially mortgages and travel and pet insurance. successful, and can demonstrate to other financial institutions that radical transparency is not disastrous Our conference on racism but eminently practical. On May 22nd we’re holding an event in London looking at how we can challenge racism through consumer And what about social justice? action. At the Ethical Consumer conference in October last The recent rise in hate crimes has cast a shadow over year, we explored the power of corporate lobbying. A the UK and we want to explore ways that the Ethical key proposal was that, rather than pushing for it to be Consumer community can respond to this. The success outlawed, we should push for it to be exercised within of the Stop Funding Hate campaign has shown that a framework of social responsibility. In this way, and in consumer action can make a difference. We want to the hands of responsible companies, it could become an learn from their success and see what more we can all do ally of campaigners for sustainability and social justice. to stem the tide of racist incidents across the UK. In the short time since then, interest around the idea of ‘campaigning brands’ has only grown. You can find out more and buy your ticket at the Ethical Consumer site at www.ethicalconsumer.org/ In the transparency article on page 10 we have a list of challengingracism three demands, focusing on clear ethical policies and complete disclosure of all assets and voting records. But Subscribers can get a 20% discount on tickets. Sign in in the lobbying field, we have a fourth ask, and it is that and visit the Subscriber Area for more details. all financial firms consider becoming public supporters of a financial transactions tax. References: 1 Ipsos MORI Trust in Professions - Veracity Index 2017

 Food and Home MAY/JUNE 2018 ethicalconsumer.org

Plastic bottle action is victory for people power ‘The merger from hell’ The fight against plastic pollution Bayer and Monsanto are one step received a massive boost recently closer to controlling the food you eat when Michael Gove announced from farm to plate, having got their the re-introduction of a bottle proposed merger green-lighted by deposit return scheme. the European Union. This is a huge This is a clear victory for everyone blow to campaigners that claim to that has been campaigning on this have delayed the merger for two issue, including Greenpeace and years. However, the merger still Surfers Against Sewage. 329,314 needs to be approved in the USA. signed a 38 Degrees petition – one of Bayer’s takeover of Monsanto would the biggest in their history. create a company with control of over a The tipping point seems to have quarter of the world’s seed and pesticide been David Attenborough’s Blue market. Bayer makes most of its money Planet II series which highlighted the from pesticides, including bee-killing threat of ocean pollution and showed neonicotinoids, whilst Monsanto is a footage of wildlife eating plastic. seed giant which also makes Roundup UK consumers use around 13 billion plastic drinks bottles a year but more than (glyphosate), the world’s best selling three billion are not recycled. weedkiller that some European countries are trying to ban. It’s yet to be decided how much deposit consumers will pay, but people will get it back when they return the container. Costs in similar schemes elsewhere range from 22p in Germany to 8p in Sweden. About 40 countries worldwide have some kind of deposit return scheme for plastic bottles. Most involve returning bottles to an automated collection point, a reverse vending machine, or to the shop. The drinks industry may have to pick up the bill for the scheme, as they do in Norway, though they are not going to be happy. They currently only pay 10% of the cost of recycling plastic packaging.

Give krill the boot “This merger will create the world’s Greenpeace are targeting Boots over its stocking of omega-3 supplements biggest and most powerful agribusiness made from Antarctic krill – tiny, shrimp-like animals which are the corporation, which will try to force its bedrock of the Antarctic food chain, and provide vital sustenance for genetically modified seeds and toxic whales and penguins. The krill are sucked out of the ocean by huge pesticides into our food and countryside,” warned Adrian Bebb, a food and farming industrial fishing vessels. campaigner at Friends of the Earth Boots is one of the last remaining UK stockists after Holland & Barrett bowed Europe. “The coming together of these to public pressure and agreed to de-list krill oil products. That created a domino two is a marriage made in hell—bad for effect, and in one week, Superdrug, Morrisons and Nature’s Best all decided to farmers, bad for consumers, and bad for drop krill oil products. our countryside.” Boots and Holland & Barrett already sell alternative vegetarian sources of SumofUs is now asking for donations omega-3 fatty acids – that pose no risk to whales or penguins. to fight a campaign in the USA. Donate Sign the petition to create an Antarctic sanctuary – at https://actions.sumofus.org/a/ www.greenpeace.org/international/act/antarctic-ocean-sanctuary baysantoapproved_sbs

The latte levy the EAC’s other suggestion of an outright ban by 2023. Instead it favours voluntary measures from the industry. It wants coffee Britain discards around 2.5 billion coffee cups every shops to offer discounts to customers bringing reusable cups. single year. Less than 1% of them are recycled because Patisserie Valerie and Pret offer a 50p discount. Costa is they are a paper shell with a plastic lining bonded to the offering a 25p discount and Greggs a 20p one. Starbucks offer a paper. 25p discount and they are trialling in 35 stores adding 5p to the MPs on the Environmental Audit Committee (EAC) put cost of a drink if you don’t bring your own. forward a serious plan to end the waste – a 25p charge on Most of the chains sell their own reusable cups but there disposable cups, to make customers bring their own. The ‘latte are also loads of others including the KeepCup glass ones and levy’ suggestion comes after the success of the plastic bag 5p tax Ecoffee bamboo ones. There are also collapsible ones like which saw an 85% reduction in the amount of single-use plastic Pokito and the Jerrybox. bags handed out. But, the coffee chains need to be doing much more. The Unfortunately, the government recently rejected the levy and disposable cups need to be at least recyclable and recycled.

 Food and Home ethicalconsumer.org MAY/JUNE 2018

Plastic in PG Tips tea bags After more than 200,000 signed a 38 Degrees petition, PG Tips, a Unilever brand, announced they would aim to make their tea bags plastic free by the end of this year. There’s still work to be done. Other big tea companies like Tetleys, Twinings and Yorkshire Tea still haven’t committed to going plastic-free. But the announcement is another victory for people power – and 10 billion fewer plastic tea bags harming the environment every year. Our tea best buys Equal Exchange, Hampstead and Steenbergs do not use plastic in their tea bags. Even if you do find a plastic-free tea bag, don’t forget that plastic may also be found in the individual sachets and the packaging around the box. © Daniel Beltrá / Greenpeace In a palm oil plantation near Sungaihantu, in South Kalimantan, the skeleton of a tree is the last relic of the rainforest that once was. Sainsbury’s Fairly Traded tea is Carex – come clean about palm oil misleading Companies like Unilever, Nestle and Mars promised their The Sainsbury’s “Fairly Traded” brand is likely to customers that they would clean up the palm oil in their confuse customers into thinking that it is part of the products by 2020. But with less than two years to go, Fairtrade scheme when it is not, the ASA advertising forest destruction in Indonesia shows no sign of slowing has said. down. Since 2012, 146 football pitches of Indonesian The ASA said: “We considered the fact that their own- rainforest have been lost every hour – that’s one football brand products using two different schemes was pitch every 25 seconds. 100,000 orangutans have been likely to cause confusion for consumers, who might assume lost in Indonesia in the last 16 years. that the packaging was using ‘Fairly Traded’ as a descriptive The main drivers of the destruction are the palm oil term to convey that it was part of the official Fairtrade companies that supply consumer brands. In January 2018, scheme rather than that ‘Fairly Traded’ was itself the name of Greenpeace challenged 16 of the world’s leading brands to a separate scheme run by Sainsbury’s.” be transparent and disclose the palm oil companies and mills Last summer Sainsbury’s, the UK’s biggest Fairtrade that produce the palm oil they use. Nine of them have done so retailer, set up its own Fairly Traded brand for tea in a – General Mills, Mars, Mondeléz, Nestlé, Procter & Gamble, move that drew widespread condemnation from NGOs, Reckitt Benckiser, Unilever, PZ Cussons and ColgatePalmolive. consumers and politicians. In every case, this information revealed that brands have forest destroyers in their supply chains – confirming that there is still a long way to go before brands can claim their palm oil is Lidl ends kangaroo meat sales deforestation-free. Animal welfare charity Viva! scored another victory The seven others are still keeping quiet. They include Ferrero, Hershey, Kellogg’s, Kraft Heinz, Johnson & Johnson, PepsiCo in its long-standing kangaroo campaign as Lidl and Smucker’s. finally caved to public pressure and will end sales of kangaroo meat from June 2018. With Iceland Greenpeace has decided to hold brands accountable and dropping sales earlier this year, Lidl had remained the has started with Carex, owned by PZ Cussons. Although Carex only UK supermarket carrying the meat. has come clean about where the palm oil used to make their products comes from, it still needs to cut forest destroyers from The Australian RSPCA estimated that 100,000 adult its supply chain and publish a clear plan to reach its 2020 kangaroos are inhumanely killed every year with some target. temporarily surviving with horrific wounds and millions of Sign the petition to Carex – https://mobile.greenpeace.org. joeys thrown away, or left to be predated. uk/carex-palm-oil-v1 “Having campaigned on the issue of kangaroo meat As part of the campaign Greenpeace has produced a spoof for the best part of two and a half decades I couldn’t be advert which ends with a shot of a man washing his hands in happier to finally say – we did it! The novelty value of so- the bathroom sink while the mirror shows a dead orangutan called ‘exotic meat’ has been masking the true horror of a in his bath. Watch it – www.facebook.com/greenpeaceuk/ brutal business for too many years. As always, Viva! remain videos/10154641500844229 committed to supporting Australian wildlife groups to end the bloody trade and celebrate the kangaroo for its unique and iconic status in Australia.” – Viva! founder and director, Look out for our Palm Oil special issue out in June where we Juliet Gellatley look at four products that contain palm oil – spreads, biscuits, bread and chocolate.

 Boycotts ethicalconsumer.org MAY/JUNE 2018

National Rifle Association boycott One of 800+ ‘’ protests on 24th March. Multiple companies have dropped linked links to the NRA following a widespread consumer boycott. The boycott began in the USA after the NRA called for teachers to be armed in schools following the deaths of 17 pupils at Marjory Stoneman Douglas High School in , during a mass shooting in February this year. The boycott is part of a mass mobilisation to improve gun laws in the country. The movement for gun control has spread online under #NeverAgain, and hundreds of thousands attended protests in cities across the USA on 24th March. The NRA © @AMarch4OurLives responded in a series of social media FedEx provides up to a 26% discount for NRA Business drives, posting “Stand and Fight for our Kids’ Alliance members. In a statement on February 26th, FedEx said Safety by Joining NRA” on its Facebook page its position on gun policy differs from the NRA, but it will be on the day of protests, and airing a video on its NRATV Youtube sticking with the gun lobby anyway. “FedEx is a common carrier Channel, titled ‘A March for Their Lies’ and addressing Parkland under Federal law and therefore does not and will not deny student campaigners. service or discriminate against any legal entity regardless of their Even companies which previously offered discounts to policy positions or political views,” the company said.2 members of the gun lobby have ended links, including United In March, the NRA launched a lawsuit challenging Florida’s Airlines, Hertz and Best Western. newly enacted law which bans the purchase of firearms by Companies that still have ties to the NRA and operate in the anyone under 21. UK include , Apple and FedEx.

Amazon is now under pressure to drop NRATV from its Take action References: 1 www. nytimes.com/2018/02/21/ Amazon Fire TV streaming service. The channel is described as The movement is asking boycotters the organisation’s most strident outlet for its pro-gun views, with us/politics/-nra-news- to contact companies and spread media-operation.html, programmes outlining leftist ‘plots’ to confiscate weapons and the word via twitter, using the viewed 19 March 2018 2 media conspiracies to brainwash Americans into supporting gun hashtags #NRAmazon #NRApple https://twitter.com/FedEx/ control.1 There is also a boycott call against Apple, which also status/968238354688102400, #BoycottNRA viewed 19 March 2018 streams the channel.

Boycott Constellation Brands Governments urged to boycott Residents of Mexicali in Mexico have called for an World Cup in Russia international boycott of Constellation Brands, after the Avaaz has launched an online petition asking governments to company gained access to the region’s drinking-water boycott the 2018 Russian World Cup, in protest against the supply in a series of “shady, undocumented” deals.3 country’s role in Syria. Ignoring international criticism, Russia Constellation plans to build a new beer factory in the region has continued to support the brutal Syrian President Bashar al- which will drain up to 20 million cubic metres of water every Assad and provide arms to the Syrian military. year – or 20% of the city’s annual supply. Avaaz says, “President Assad’s extermination of his own Mexicali Resiste, the group behind the boycott, says that people has been chillingly surgical: he surrounds towns so the company’s access to this water is a result of corruption. The civilians can’t leave, cuts off access to food and medicine, and company originally planned to lease water from wells owned drops bombs, even chemical weapons, on desperate families. by the director of the Department of Economics, according Some say we shouldn’t mix sports in this horror. But sport is 4 to the campaigners. After protests forced a change of plan, a forum for peace and good. It shouldn’t be used to shower the company was offered a drinking water line from federal accolades on war criminals. Let’s unite to show we won’t cheer 5 property. in Russian stadiums while their Air Force bombs and starves The boycott call follows a long history of conflict over babies to death in Syria.”6 the privatisation of water in Mexico and other areas of Latin Theresa May announced in February that no British minister America. would attend the competition, in response to the poisoning of See the Ethical Consumer website for our interview with the ex-Russian spy and double-agent Sergei Skripal in London. Jesus from Mexicali Resiste.

Take action Take action Boycott Constellation Brands which sells Hardy’s and Echo Sign the petition: https://secure.avaaz.org/campaign/en/alt_ Falls wines in the UK. world_cup_loc_impact_pa_uk

References: 3 www.telesurtv.net/english/analysis/Mexicali-Resiste-boycotts-Constellation-Brands-Grupo-Modelo-20180213-0009.html, viewed 19 March 2018 4 Phone call with Jesus Galaz from Mexicali Resiste, 16th March 2018 5 www.nativecommentaryandopinion.com/2018/03/08/water-wars-mexicali-resiste-fights-for-water-rights- against-international-corporation-constellation-brands/, viewed 19 March 2018 6 https://secure.avaaz.org/campaign/en/alt_world_cup_loc_impact_pa_uk, viewed 19 March 2018  Product Finance special GUIDE MAY/JUNE 2018 ethicalconsumer.org Follow the money Rob Harrison introduces our 2018 report on ethical financial products and calls for greater transparency so you can see where your money goes.

activities. Ethical Consumer, in its usual increasingly important effect on how our This report includes six guides to way, is putting all this data into its ranking financial company rankings work. the following financial products: database and trying to create meaningful • Current Accounts guides to help consumers navigate this A call for greater • Savings Accounts, ISAs and credit complex space. unions transparency • App Banking • Home & Car Insurance Broader trends What should the financial institutions • Ethical Pensions This is the first time we have updated of the future look like? How can we • Ethical Investment Funds. all our ‘money’ product guides at the stop them from funding pernicious or same time, which allows us to look at damaging projects? Or from failing to some broader trends and new ideas. correct poor ethical decisions by managers thical banking is one of the most It is encouraging to see, for example, in companies in which they own shares? popular reports on our website and, campaigners now targeting insurance As investors and savers, we can start since our last update in 2016, much companies choosing to insure new coal by making sure that our own capital is E not causing damage, and combining this has happened. The super-ethical provider fired plants. (see page 33). Triodos has launched a new current with support for regulation to make such account (see page 12) and phone-based changes permanent. Helping people to banking apps are attracting millennials as do this is the primary purpose of these fast as veganism (see page 26). The Co-op financial product guides. Bank’s ownership has changed again (see Thirty years ago, when we first page 17) and directors’ pay continues to be began trying to look for ethics in global an issue (see page 15). financial markets, the response was largely Even more importantly perhaps, civil one of sarcasm and disdain. In 2018, society organisations are continuing to ethical banking and socially responsible target banks and investors to put pressure investment and ‘impact investment’ on unethical corporate behaviour further employs thousands of people around the down the chain. BankTrack, the specialist world and, according to the Financial 1 Dutch NGO, talks about its work on page Times, reached ‘tipping point’ in 2017. 16 but, throughout our guides, we have It is still horribly compromised in used recent campaign reports to rate the parts, and very thin in others, but we companies in this magazine, such as those are beginning to get a glimpse of what targeting financiers of: a systematically ethical financial sector • Nuclear weapons firms (ICAN Report, might look like. In short, it will be a 2018 – see page 25) In addition, the language of ‘impact radically transparent one. Demands from • Human rights abuses in Liberia (Global investing’ (see page 39) is joining a general campaigners such as ShareAction (see Witness Report, 2015) trend trying to identify ways to support page 24) and 3D Investing are beginning • Fossil fuels (Rainforest Action Network exclusively ethical projects rather than to coalesce around key asks such as those Report, 2018 – see page 24) trying to avoid unethical ones. New in the ‘What we want’ box opposite. • Palm oil companies with poor labour developments in online crowdfunding (see rights records (BankTrack, 2018) page 43) are also important here. Avoidance, • Companies supplying the Israeli And finally, we are observing a trend military (War on Want report, 2017 towards demands for transparency. engagement and voting – see page 14) In order for people to try to exert any Ethical Consumer and others have long • Mining near the Great Barrier Reef kind of moral scrutiny of their financial urged financial companies to avoid clearly (BankTrack Report, 2016). institutions, they need to be able to follow unethical sectors such as tobacco and land Campaigners are following the money the money from their own bank deposit mines. Two years ago, in 2016, we looked back to Western financial institutions to the business loan or shareholding at how the argument for the wholesale whose brands might not like to be at the other end. These developments avoidance of sectors was being extended to associated publicly with such controversial around transparency are now having an fossil fuels by climate campaigners, and we

10 Finance special Product MAY/JUNE 2018 ethicalconsumer.org GUIDE

This is good news, and currently more open the most recent Shell AGM. In future, we What we want from firms will tend to get a better score in our hope that rankings can become sufficiently financial companies transparency rankings (see below). A lot of sophisticated to look more critically at 1. A clear ethical investment or this disclosure, though, simply reveals how all this disclosed data. This is not a trivial lending policy uncritical many investors are. Aviva, for task, however, with just one company – example, one of our best ranked companies, BMO for example, disclosing that it voted This should address social and disclosed honestly that they didn’t vote on 91,182 resolutions at 8,996 meetings environmental issues and apply to all 2 the assets held by the company group against a single director or resolution at across 52 countries in 2016. – not just those in ethical funds or products. Some very big companies, Our transparency ranking like Aviva and Legal & General, We checked all the finance companies Top of the pile do this already, as do Co-op Bank, for loans to, and investments Ecology Building Society, Triodos 1. A clear ethical investment or lending (shareholdings) in, some key unethical Bank and Charity Bank. policy and companies and used the data in our 2. Clear lending and investment 2. Clear lending and investment rankings. Building societies were not disclosure and disclosure rated in this way because they usually We want companies to publicly don’t make loans to companies, only 3. Full disclosure on engagement and list all the assets they hold. Some on property. voting smaller companies do this already When we found a loan or investment Aviva, AXA, Castlefield, Royal London, such as Triodos, Charity Bank and in these problem companies, the Triodos, WHEB. WHEB. Other companies may do this finance company lost marks on the Getting there indirectly through full disclosure of table corresponding to the problem Some details of investment, their voting history. identified at each company. For engagement and voting policies, with 3. Full disclosure on engagement and example, holding shares in BP lost a limited disclosure of voting history. voting company a half mark in the Climate Aegon, Allchurches, Allianz, BMO, Change column. We think that responsible corporate Fidelity, Impax, Janus Henderson, shareholders should vote on all While this system is good at letting you Jupiter, Legal & General, Liontrust, company resolutions according to know how compromised most firms Lloyds Banking Group, Premier, a clear engagement policy which are across most ethical issues, it does Rathbone, Sarasin & Partners, Standard addresses ethical issues. They should tend to reward companies that are Life Aberdeen. publicly disclose and explain each less transparent about their loans and Vague/unsubstantiated vote on an online database or investments. We have, therefore, used document. Many very big companies the following transparency ranking to Some reference to a voting policy or do this already. amend how financial firms score on engagement strategies, or a published our Ethiscore database. The ranking stewardship statement, but more mainly covers insurance, pension and information required to assess how produced guides to carbon divested funds investment fund companies who are robust they are. No voting, or voting or and banks. That data is updated in these more likely to hold shares in other disclosure for a single subsidiary only. guides. companies. Prudential, Covea. For the majority of investment firms, such as those selling ethical investment ‘Top of the pile’ companies were not Bottom of the pile marked down for their investments, funds and pensions, this discussion No information on investment, as they appeared to be engaging is uncomfortable. They have learned engagement or shareholder voting transparently with them in a systematic policies, could be found. to ‘spread risk’ by investing across all way, unless they have received specific economic sectors and, 20 years ago, they external criticism. Admiral, Ageas, Caledonia, argued that instead of divesting they Co-operative Group, Direct Line, ‘Bottom of the pile’ companies would ‘engage’ as shareholders with esure, Hannover Re, Hiscox, HSBC, were assumed to hold investments companies to improve their behaviour. J. C. Flowers, Liverpool Victoria, in companies criticised across all Markerstudy, Marsh & McLennan, The scepticism that greeted that response our main categories as they had no has, in time, generated attempts by some Munich Re, NFU Mutual, Old Mutual, apparent ethical policy stating that they Red Sands, SVM, Ultimate HC, Virgin firms to systematically demonstrate how did not. hard they are trying. Sometimes this Money, Zurich. engagement looks effective, such as when A PDF explaining the ranking in each case will be published on our website. it is part of a collective exercise like the Climate Care Coalition. Often it does not. Also working on this finance report were: Clare Carlile, Anna Clayton, Francesca de la Many investment firms now have Torre, Mackenzie Denyer, Joanna Long, Ruth Strange, Jane Turner, Heather Webb and searchable online databases of the AGMs Josie Wexler. of each company they hold shares in, and how they voted on each resolution. Additional background research was provided by members of the Remote Research There is clearly much more of this kind Group: Bryony Moore, Jeff Dean, Steve Pine and Una Bartley. You can find out more about the project and how to get involved at www.ethicalconsumer.org/researchhub/ of disclosure than when we last reviewed remoteresearchgroup this sector in 2014, and some of this will be down to collective initiatives such as the References: 1 The ethical investment boom James Kynge September 3, 2017 2 www.bmogam.com/pt/ ‘Financial Reporting Stewardship Code’. institutional/our-capabilities/responsible-investment

11 Product Current accounts GUIDE MAY/JUNE 2018 ethicalconsumer.org

it has made. It has an extensive ethical investment policy, going beyond ‘negative’ screening and only investing in businesses Current affairs and charities that it judges to be of social or ecological benefit. In 2016, its largest lending categories were renewable energy Josie Wexler looks at the ethics of the (24% of total lending), private loans (14%) and healthcare (13%).1 companies who offer current accounts. Triodos is a young Dutch bank, founded in 1980. It started as an anthroposophical The big ethical banking news in 2017 was Triodos is uniquely transparent about initiative – part of the esoteric movement Triodos launching its current account. everything. Apart from Charity Bank, started by Rudolf Steiner, also behind Triodos is now in a good position to take which only does savings accounts, it is Steiner Schools and biodynamic over as the main UK ethical bank, and is the only commercial bank in the UK to agriculture. However, formal links with the our best buy for current accounts. provide an annual list of all the loans Steiner movement were severed in 1999.

Environment Animals People Politics +ve USING THE TABLES USING THE TABLES Ethiscore: the higher Positive ratings (+ve): the score, the better the • Company Ethos: company across the criticism = full mark, categories. e = half mark. H = bottom rating, E h = middle rating, • Product Sustainability: empty = top rating Maximum of five positive (no criticisms). marks.

BRAND (out of 20) Ethiscore Reporting Environmental Climate Change Toxics & Pollution Habitats & Resources Oil Palm Testing Animal Farming Factory Animal Rights Human Rights Rights Workers’ Supply Chain Management Irresponsible Marketing Arms & Military Supply Technologies Controversial Call Boycott Activity Political Anti-Social Finance Ethos Company Product Sustainability COMPANY GROUP

Triodos [E+] 15.5 E 1 SAAT Cumberland Building Society 13.5 H E Cumberland Building Society Nationwide BS 13.5 h h E Nationwide Building Society Clydesdale/ Yorkshire Bank 12.5 h H Clydesdale & Yorkshire Metro Bank 12.5 H h Metro Bank Plc Co-operative Bank / Smile [E] 12 H h H 0.5 Co-operative Bank Plc ICICI Bank 6.5 HHHH H H H h ICICI Bank Virgin Money 6.5 Hhhh hhHhhhh H Virgin Group Holdings Handelsbanken 5.5 Hhhhhhhhhh hhh hH Svenska Handelsbanken AB Bank of Scotland 5 hHhhhh hHh hH HH Lloyds Banking Group Plc Halifax 5 hHhhhh hHh hH HH Lloyds Banking Group Plc Lloyds 5 hHhhhh hHh hH HH Lloyds Banking Group Plc Santander/ Cater Allen 5 Hhh hhhHh hHh HH Banco Santander SA Bank of Ireland 4.5 Hhhhhhhhhh hHhhhH Bank of Ireland Danske Bank 4.5 hHhhhhhhhh hHhhhH Danske Bank A/S/Møller Fdtn TSB Bank 4.5 Hhhh hhhHh hHhhhH Banco de Sabadell SA Citibank 3.5 HhhhhhhHH hHhhHH Citigroup Inc First Direct 3 hHhhhhhhHh hHHhHH HSBC Holdings Plc HSBC 3 hHhhhhhhHh hHHhHH HSBC Holdings Plc Barclays 3 HHhh hhhHh hHHhHH Barclays Plc Post Office 2.5 HHhhhhhhHHhhHhhhH Bank of Ireland/UK Govt Coutts 2 HHhhhhhhHH hHHhHH RBS/UK Government NatWest 2 HHhhhhhhHH hHHhHH RBS/UK Government RBS 2 HHhhhhhhHH hHHhHH RBS/UK Government Ulster 2 HHhhhhhhHH hHHhHH RBS/UK Government M&S Money 1.5 hHhhhhHHHH hHHhHH HSBC Holdings/M&S Group Tesco 0.5 HHHHhHHHHH H H HH Tesco Plc

See all the research behind these ratings together on www.ethicalconsumer.org. Free to subscribers. [E] = ethical lending policy [E+] = ethical lending policy plus full, public list of investments

12 Current accounts Product MAY/JUNE 2018 ethicalconsumer.org GUIDE

their investments, making it harder to Triodos’ new current m discover them. nsu er o .o c r account We have thus primarily used l g Our best buy for several third-party reports in a

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order to rate companies, including t Triodos, and it is new approach for the UK as, instead of e International Campaign to Abolish Y levying huge charges for going overdrawn B U great to have a fully Nuclear Weapon’s report ‘Don’t Bank ES T B without agreement, which are often paid transparent lender on the Bomb’, which lists investments by the poorest, it charges a £3 per month ahead of the field. in nuclear weapons (see page 25), flat fee for having the account. You cannot BankTrack’s reports on investments in go overdrawn by accident as the payments 15.5 damaging extractive projects (see page 16), just don’t go through, but it is possible and Rainforest Action Network’s report to arrange an overdraft facility of up to ‘Banking on Climate Change’ which lists £2,000. investments in the most problematic fossil Ethically, there is a lot to say for this fuels (see page 24). account. There are, however, a couple of drawbacks from a consumer perspective. Climate change The first is that, because of the lack of UK Also scoring well are the Nationwide branches, you can’t currently pay cash into As covered on page 24, all of the big banks and Cumberland Building Societies, your account, only cheques. have extensive investments in fossil fuels, Co-operative Bank, Smile, Yorkshire The second is that Triodos is including the most damaging ones like tar Bank and Clydesdale Bank. exceptional among UK banks in that it is sands. Unlike Triodos, these all offer free covered by the Dutch deposit guarantee The current account options that banking and have branch networks, scheme rather than the British one. Both don’t come weighed down with a load which for some will be important. schemes guarantee deposits up to £85,000 of fossils are those offered by Triodos, The Co-operative is the best of per person in the case of the bank going Nationwide and Cumberland Building these because it maintains a strong bust. In theory, the Dutch version should Societies (building societies don’t really ethical stance across a range of issues. be just as good, but if you ever did need invest), Clydesdale/Yorkshire Bank, the Other options to consider are to go to court, it would be much harder to Co-operative Bank and Metro Bank. credit unions, discussed on page 23, bring a case in a foreign court. The only one that currently invests and app banks (see page 26). seriously in renewables, however, is Triodos. Table highlights BRANDS TO AVOID Fracking Tax avoidance In EC161, when we last covered banks, we Santander, Citibank and HSBC Ethical Consumer ranks companies gave details of which major banks were were all criticised in the reports on across all sectors on their likely use of tax involved with fracking companies. The tax, directors’ pay, nuclear weapons avoidance strategies by looking at the type most involved were Barclays and HSBC, and climate change. HSBC has also of subsidiary companies they have in tax both of which not only provide banking been targeted for funding companies havens. The banks and buildings societies services to fracking companies, but own selling arms to Israel (see page 14). with current accounts score as follows: portions of several of them. There haven’t RBS (including NatWest, Coutts and • Best rating (unlikely to be engaging been any major changes since then, and Ulster), is also neck deep in scandals, in tax avoidance): Triodos, ICICI, the previous research is still on the web. and Tesco Bank. Clydesdale, Nationwide Building Society, Co-op, Metro Bank, Yorkshire Bank. • Middle rating: Handelsbanken, RBS, Barclays. • Worst rating: HSBC, Danske Bank, Bank of Ireland (Post Office), M&S Money, Lloyds Bank, Tesco Bank, Virgin Money, TSB, Citigroup, Banco Santander. Companies that scored a middle or a worst rating were marked down in the Anti- Social Finance column on our score table opposite. Bank investments We mark companies down for having investments in unsavoury areas. However, Banks’ financing of tar sands went up by many financial companies do not declare 111% in 2017. See page 24 for more details. Photo: Greenpeace/E M/Banking on Climate Change report Photo:

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