Green bank Triodos expands amid calls to boycott bonus givers

8th February 2012

Socially responsible bank Triodos is set to report that its lending to sustainable organisations in the UK soared 36% during 2011, according to "sustainable thinking" website BusinessGreen.

The company's UK loan book increased by £113m to £424m – still little more than a flea on the elephant's hide of mainstream banking but a good performance against a backdrop of falling loans to small and medium sized enterprises elsewhere. The big growth areas were in renewable energy, up a quarter, and social housing, increasing 240 per cent from a low base.

Triodos, headquartered in Holland, only lends to organisations which can show social and environmental benefits. It concentrates on organic food and farming, renewable energy, social housing, and fair trade firms and charities. The bank claims much of its gains come from the "new economy" that are emerging in sustainability.

But Triodos – and far bigger ethical counterpart the Co-operative Bank – could benefit from a very old style move planned for Friday 10th February by Move Your Money, a new website which suggests bank account holders should switch their cash away from traditional banks to those encapsulating new economy and green credentials.

Bob Diamond Bonus Day

Why Friday?  It's ringed round in the diaries of banking and political spin machines, as well as the media, as the day Barclays Bank announces 2011 full year figures.  And while profits will be in billions, attention will largely be focused on the millions paid in individual bonus payments to chief executive Bob Diamond and other Barclays executives.

The Move Your Money idea is that the bankers' bonuses will act as a catalyst for customers to close accounts and reopen them elsewhere. It will be labelled "Break Up with Barclays day."

This blog from tax fairness campaigners UK Uncut points out that "from civil right activists creating local banking in the US, to Barclays pulling out of apartheid South Africa – change happens when we act. The banks aren't going to change themselves."

The largely university campus campaign against Barclays' involvement in Apartheid South Africa in the 1970s and 1980s turned the bank's brand toxic for many. It's a tactic that many think can be repeated over issues such as bonuses and profits as a post on the 38 Degrees website suggests. The campaigns of 30 to 40 years ago should now be easier to mobilise – thanks to social media.

Unwelcome publicity

And on an unrelated issue, the bank has garnered some unwelcome publicity over its sponsorship of London's Cycle Super Highways, which have been criticised as badly planned both before and now following a number of fatalities.

Banks take their brands seriously as this Brand Finance Banking 500 shows. Only two UK-based banks are in the top 20 – HSBC is top with an AAA rating while Barclays comes in at 12 (down from 7 last year) with AA+.  Royal Bank of Scotland is the next UK bank at 45 – it's rated A+ (the brand, not the credit credibility).

Move your money month

UK Uncut says: "Banks rely on the deposits of ordinary savers. When you choose where to keep your money, you are choosing between supporting business as usual, or taking a simple but powerful step towards a better banking system. By moving your money you can directly support an ethical and socially useful bank, and send a clear message about the sort of society and economy you want to see. And one you'd rather not."

Beyond Barclays, campaigners are hoping that March 2012 will be ‘Move Your Money Month', with account holders switching cash away from traditional banks to bring about change.

In the immediate term, this will have scant effect on share prices – RBS and Lloyds are so depressed anyway.  But looking longer ahead, this could impact bottom lines.

The winner from this should be the Co-op Bank whose takeover of the Britannia Building Society and its proposed acquisition of 632 Lloyds Banking Group branches (due in late 2013) will have propelled it from small bank into a high street force.

It should however worry about the question whether it can remain true to its roots while overseeing a massive expansion.

And although they can't claim the same ethical credentials, Metro Bank and Virgin Money (formerly Northern Rock) could also benefit.

 

More from Mindful Money:

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8 thoughts on “Green bank Triodos expands amid calls to boycott bonus givers”

  1. Anonymous says:

    Hi Shaun,

    The trend of foreigners using Swiss Francs for saving points to it becoming an international reserve currency, as sterling was once (many years ago) and the dollar is. The Swiss economy also benefits from having a low inflation rate which supports the wealth generating process and discourages unproductive speculation.

    West Germany did not suffer from many foreigners holding large quantities of DMarks in cash. Presumably the foreign buyers of Francs want their savings to remain valuable – so it is hard envisage a scenario which results in debasement of the franc and economic harm. Please discuss possible downsides.

    1. Anonymous says:

      Hi Expat

      You raise a fascinating point, at what point does a currency become a reserve currency? If we stick to the basic point of it being in demand beyond the size of the economy supporting it then the Swissy has qualified for a few years now.

      The downside is for the Swiss who find their central bank supplying Swiss Francs to investors and therefore find its coffers filling with Euros. The SNB is trying to spread the risk by switching into other currencies and other assets (was it on here that a link was placed showing it buying Finnish shares?). What happens if they fall in value? And of course that would mostly come with the should the “utmost determination” of the SNB fail.

      Longer term there is the issue of a growing pool of Swiss Francs a bit like say the Eurodollar markets..

  2. The_forbin_project says:

    hello shaun,

    so Germany will leave the Euro ?   I cannot see the French allowing that at all!

    And as far as the rest of the Eurozone – the banks are still bust – with or without Germany

    So far we have had fear of the alternative  – ie they go bust – economies shattered and the Euro project abandoned ( with a possibilty of a little bit of War)

    But

    We have had no other alternatives discussed or talked about ?

    Why ?  the debt is too big and will take the UK banks down again ( and if we;re lucky we’ll get a housing crash as well!!  )

    Too big to fail is becoming too big to save…..

    Forbin

     

    1. DaveS says:

      I disagree – if the ECB started to do unlimited debt monetisation then the immediate problems would go away. We would have big bond and equity rallies as market rushes to get on same side of trade as ECB, The Euro would be saved – sort of.

      In the medium term there would be wide-spread head scratching as to why there still isn’t growth in the periphery. But just like the UK, the economies of Spain. Greece etc are fundamentally unsound and based on debt leverage. So to the “surprise” of the ECB the deficits will continue but with rising inflation and falling real incomes. They will have no choice but to continue QE.

      So eventually they will ghave to pull the secret big lever – the wage/inflation spiral – its the only way to release the consumer from his debt overhang so he can consume again. In practical terms – its the only way to get nominal house prices to start rising again which is what they really need to get their fake GDP growth.

      Of course the Germans don’t want to do this – they don’t need to do it. But I feel they are trapped by history and perhaps by Krugman style economic doctrine – so my bet is that it will happen

    2. Anonymous says:

      Hi Forbin

      I was thinking of a possible Euro exit and its effect on Germany as I wrote this article today. It has been assumed that any new Deutschemark would rise in value and that the rise would cripple the German economy. Whereas a fair amount of appreciation does not seem to have crippled the Swiss.

      So a Dm capped at say 20% above where it is now by the Bundesbank and ECB?

    1. Anonymous says:

      Thanks for the link Kit I enjoyed listening to that.

      HG Wells from 1932 “Our political life is out of gear even more than our economic life”

      Do we always think that in recessions/depressions? I guess we might but let’s credit him with some foresight as he did write some great stories!

  3. JW says:

    Hi Shaun
    As I live just over the French border from Geneva, I often pop over the border for all sorts of reasons, Sunday papers, english language films, books. But I have to report interesting things about the prices of two staples, petrol and food.
     Before the 1,20 ‘fix’ , I filled the car up on the Swiss side, savings of 5-10%; 1.40Euro versus 1.54Euro ( you can use Euros or CHF on both sides for most things, including the odd pain choca). After the fix, the Swiss price gradually increased to equal the French, so both are now charging about 1.54 Euro. Interestingly this price tends to be only available elsewhere in France at the supermarket chains.
    Most ‘better’ supermarket’s carparks are full of ‘GE’ reg cars, and not just because of 2nd homes. You don’t generally go to Switzerland to shop for food or for that matter eat in Swiss restaurants. Its too expensive.
    Clearly big ticket items like property are much more expensive in Geneva because of the FX movements over the last decade ( not that they were ever ‘cheap), but almost everything else is ‘manipulated’ centrally. The Swiss plan everything. Their whole internal economy is determined by their required rates for their pension ‘pillars’ and just about everything flows back from this.
    I don’t believe their stated ‘inflation’ rates reflect anything except what they want the rest of the world to believe. That is until the strains become too great that they have to release the valve.
    I dont think the ‘Swiss model’ is particularly relevant to Germany , a far more open society.
     

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