Major Developments

Public Policy disclosure
In 2002, The Co-operative Bank sponsored the publication 'Government's Business - Enabling Corporate Sustainability'. In this publication, Forum for the Future argued that voluntary corporate action needs to be augmented by a well-crafted regulatory framework, if the private sector is to achieve the acceleration necessary to meet the urgent challenge of sustainable development. i

However, groups such as SustainAbility ii and Green Alliance iii have recently pointed out that, time after time, proposals for protective ethical and sustainability legislation are blocked, or delayed, by business resistance, most notably in the case of the United States' failure to ratify the Kyoto Convention on climate change. Furthermore, some businesses are enthusiastic supporters of sustainable development in public, but in private they use their influence within the 'corridors of power' to lobby against the development of the more robust regulations needed to promote more sustainable business practice.

In this Report, under the banner of 'Influence and action', details are provided of instances where CFS has sought to influence the social and environmental dimensions of various legislative proposals during 2003. In particular, there has been significant work in and around the area of European chemicals legislation, more commonly known as REACH. This has been analysed and commented upon by CFS' sustainability auditors.iv

Project Mandate
In 2003, a project was developed to substantially reconcile the historically different approaches of CIS and The Co-operative Bank to Socially Responsible Investment. Reconciliation will focus on establishing a clear customer mandate for CIS' responsible shareholding policies, in the same way that bank customers currently guide its Ethical Policy. Follow this link for further details of CIS' customer mandate project.

It is envisaged that, following extensive customer consultation during 2004, a new CIS Socially Responsible Investment (SRI) Policy will be launched in early 2005. This new policy will cover all asset classes - shares, bonds and property. Unlike the bank, ethical screening is unlikely to be the focus of the new CIS Policy. Instead, there will be a clear commitment from CIS to use its influence - via the shareholdings owned on behalf of its policyholders and unit holders - for the benefit of customers and society alike. Where demand exists, CIS will, in tandem, operate screened funds, such as Environ.

The new empowered CIS SRI Policy will be consistent with that of the bank in that it will be developed in consultation with its customers and will signal that CIS aims to be the leader in its sector in terms of the pursuit of corporate social responsibility. Depending on CIS customers' feedback, it is feasible that a situation could evolve where, in 2005, the bank could continue to decline to finance a particular business as a consequence of it exporting arms to oppressive regimes, whilst CIS would leverage its stakeholding in the same business to question whether such activity is conducive to robust long-term financial performance. This should improve CFS' overall influence.

Corporate and business banking analysis
The bank's Ethical Policy stipulates who the bank will and will not finance, as directed by customers. It covers all of the bank's assets (e.g., retail and syndicated loans, and corporate leasing) and liabilities (e.g., retail deposits and savings, and treasury dealings), and the investment of retained balances. The bank has previously provided a detailed annual breakdown of all instances where business has been declined as a result of its Ethical Policy. For the first time this year, an ethical and sustainability analysis is provided of the bank's corporate and business banking lending and deposits balance sheet. Follow this link for the corporate and business banking analysis. This is designed to assess the extent to which the bank's products and services support organisations that, in the bank's view, make a particularly positive contribution to society. Analysis shows that, on average during 2003, 47% of the bank's deposits and 24% of its lending balances were derived from activities that have a distinct co-operative, ethical or sustainability purpose.

Accessibility
The population of the UK is becoming increasingly diverse. People from ethnic minority groups account for nearly eight percent of the population,v and there are now more than eight million disabled adults.vi CFS' efforts to deliver on its diversity and accessibility commitments are beginning to bear fruit, with a variety of improvements evident. Follow this link for details of CFS' diversity performance.

In 2004, CFS will further extend the provision of information on its sustainability performance in a variety of accessible formats. Previously, summaries of the bank's Partnership Report and CIS' Social Accountability Report were  made available in a range of languages - Bengali, Cantonese, Gujarati, Hindi, Punjabi, Urdu and Welsh. These were downloaded over 1,800 times in 2003. In 2004, in response to the increasing demand for information in different languages - particularly European languages - summaries are now available in Arabic, French, German, Italian and Spanish.

In a similar vein, the online version of the CFS Sustainability Report meets 'Level AA' of the W3C Web Content Accessibility Guidelines 1.0 vii, which are widely regarded as the international standard for website accessibility. More generally, the vast majority of the content of the CIS, bank and smile websites already meets the first level - 'Level A' - of this accessibility standard. During 2004, further accessibility improvements will be implemented as CFS works towards 'Level AA'.