WHY should our young pay for the greed and fraud of the bankers?
This question, raised by Green Party leader Natalie Bennett at The Yorkshire Post’s Environment awards, deserves a straight answer. The simple answer, of-course, is that young people shouldn’t be forced to pay for the sins of the banking sector. But in reality, they will continue to suffer because of the shameful misconduct at some of the biggest financial institutions. It’s hardly surprising that national politics is re-discovering its radical edge.
During her keynote speech, Ms Bennett said the sudden soaring popularity of left-wing campaigner Jeremy Corbyn was much less of a surprise outside the Westminster bubble, and reflected a wider rejection of politics as usual.
She was addressing an audience who believed that the traditional, wasteful, way of doing business has been discredited. The environment awards celebrated the people who work tirelessly to protect our natural world and ensure we all have a sustainable future.
Our Green champion provides living proof that it pays to take an ethical approach to financial services. Paul Ellis, the chief executive of the Ecology Building Society, has spent a lifetime campaigning against the forces of greed and short-termism.
The society based in Silsden, West Yorkshire, was founded in 1981 after 10 people clubbed together to form a mutual that put the environment first.
Mr Ellis, who was one of the original investors, now presides over an organisation that provides mortgages for properties and projects which follow ‘green’ building practices. Mr Ellis’s recent blog about sustainability ought to be posted on the boardroom walls of every major bank. According to Mr Ellis, financial institutions are intermediaries between individuals, organisations and communities. They should help our economy run smoothly. When they become extractors, they suck the life out of that economy. And at that point, the business value of moral purpose becomes clear: financial institutions cannot survive without the society and the economy that they exist to serve.
So principles don’t pull against profit, unless you are really short-sighted.
Mr Ellis said: “Principles mean growing in a sustainable way. Principles mean valuing profits for what they enable you to do – in our case, helping people to live in harmony with their environment – not for what they enable you to pay.”
So what are we to do with the banks who simply don’t grasp this lesson? Last month, a consumer organisation warned that fines are failing to curb misconduct at banks or prompt customers to switch lenders. The Financial Conduct Authority has ratcheted up fines to record levels in a bid to deter wrongdoing after banks were caught trying to rig currency markets and the Libor interest rate benchmark.
“Do they actually change behaviour? I don’t think there is much evidence of that, ” Sue Lewis, chairman of the Financial Services Consumer Panel, said at a conference in London.
“Do they work in the sense of hurting companies and to make them want to change their behaviour?
“I think the jury is still out and the answer is probably not, ” Ms Lewis said.
Consumers were not switching banks in large numbers after these fines because they can’t differentiate between lenders’ behaviour, Ms Lewis said.
“People think that all banks are the same, that they are all equally bad, ” said Ms Lewis.
This is a depressing picture, at a time when financial institutions really should be focusing on our dwindling natural resources. As Mr Ellis observed, who will care about the FTSE 100 when the planet can no longer support us?
Anyone seeking ethics in modern financial services really ought to beat a path to Silsden.