About
Co-operative Financial Services (CFS) is an Industrial and Provident Society, bringing together Co-operative Insurance, The Co-operative Bank and its internet bank, smile. It is a UK-based business, with headquarters in Manchester, and main offices concentrated in the North West of England. The company was formed in 2002; by the end of 2007, it had over six million customers, and employed 9,175 staff at over 150 UK locations.
CFS seeks to be amongst the world’s leading businesses when assessed on its response to global climate change, an integral part of its approach to sustainability. It has, arguably, done as much as any other UK business to tackle its contribution to climate change, in terms of operations, products and services, and influencing activities. In March 2007, CFS went'beyond carbon neutral' by offsetting all of its remaining operational and business travel emissions, together with an extra 10% to cover legacy issues and CFS has maintained this policy going forwards.
CFS measures the impact of its operations and physical assets and reports publicly on an annual basis in its independently verified
Sustainability Report.
It is the only financial services body worldwide to be certified to the environmental management standard ISO14001 on a company-wide basis. This certification extends to the complete range of operations, activities, products and services (personal and corporate banking, insurance, investments and pensions) of CFS, Co-operative Insurance, The Co-operative Bank and its internet bank, smile.
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Strategy
CFS’s key environmental achievements include:
Purchasing electricity from renewables
In 2007, 99% of the electricity supplied to CFS (some 34.9GWh) was obtained from good quality renewable sources, which supports annual CO2 savings of 14,993 tonnes. As a result of the increased use of renewable electricity, CFS’ net CO2 emissions from energy consumption in its premises have decreased by 66% compared with a 2002 baseline. Of particular note, within CFS’ green electricity
supply portfolio is a highly innovative eight-year power purchase agreement with Ecotricity providing 9GWh per year. This long-term off-site commitment – the first of its kind – enabled Ecotricity to finance the construction of a new, six-turbine wind farm in Lincolnshire.
Going forward, CFS has committed to the Co-operative Group’s target to reduce its energy consumption by 25% by 2012 (based on 2006 levels) and to generate 15% of its energy requirements from its own renewables by 2012.
Developing renewables across CFS
Completed in May 2006, the Solar Tower Project is the UK’s largest-ever solar power installation and was visited by the UK's then Prime Minister, Tony Blair, in 2005. This £5.5m project has transformed the 400 ft, 25-storey landmark Co-operative Insurance Tower with the installation of over 7,000 photovoltaic (PV) panels with the potential to create 181MWh of renewable electricity and save 78 tonnes of CO2 emissions each year. The solar panel cladding was considered to be the most cost-effective solution to repairing the deteriorating facade of the building, whilst respecting heritage concerns (the building is Grade II listed) and aligning with CFS' sustainability requirements.
Developing environmental products and services for its customers
In 2007, CFS saw substantial growth in the total amount of carbon dioxide offset across itsrange of products and services with a carbon offset element.
Carbon offsetting has been a standard feature of all of The Co-operative Bank’s mortgages since 2000 and accounts for the bulk of CFS’ offset payments in 2007. Every year that a customer holds a mortgage, the Bank pays to offset a fifth of a typical UK home’s CO2 emissions. All mortgage customers were also offered a free home energy rating when purchasing a house. This advises how energy efficient a property is and identifies potential areas of improvement.
In 2007, The Co-operative Insurance continued to provide an offset as part of itsecoinsurance product. This was thefirst motor insurance policy to includecarbon offset as standard, when it was introduced in May 2006. For each year that a policy is held, The Co-operative Insurance will offset 20% of the car’s CO2 emissions, based on an average UK car traveling an average number of miles. In early 2008, The Co-operative Insurance launched carbon offset as a standard feature of most new car insurance policies.
During 2007, a total of 67,000 tonnes of CO2 offset were purchased (2006: 49,000). Reductions were realized via the following projects delivered by Climate Care:
- The reforestation of 33 hectares in the Kibale Forest National Park, Uganda was supported. Chimpanzees and forest elephants have begun to migrate into areas previously reforested by the Bank. This brings the total area of supported replantings to231 hectares, equivalent in area to 8,830 tennis courts. The 33 hectares reforested in 2007 will sequester 13,400 tonnes of CO2.
- The construction of household biogas systems to provide renewable cooking fuel around Ranthambore National Park in India. Ranthambore is one of the world's largest tiger reserves, but the illegal gathering of wood for cooking is putting the tigers' habitat under threat. In 2007, offset monies helped to fund the construction of 73 biogas systems, and will avoid emissions of 7,300 tonnes of CO2 over nine years.
- The provision of energy efficient cooking stoves in Cambodia. This reduces the amount of wood needed for cooking, which means less carbon dioxide is released from the stoves. The reduced demand for wood also helps to protect Cambodia's forests. In 2007, offset monies helped to fund construction and supply of over 20,900 stoves, and will avoid emissions of 31,400 tonnes of CO2 over three years.
- The provision of treadle pumps in West Bengal, India. These manual pumps are used to irrigate fields outside of the monsoon season. They provide a more sustainable and affordable alternative to expensive diesel powered pumps, and can be used all year round, increasing productivity and bringing much needed additional income to farming families. In 2007, offset monies funded approximately 29,500 treadle pumps, which will avoid emissions of 13,300 tonnes of CO2 over four years.
- The partial funding ofa wind farm in Saihanba,China. The funding consisted of a contribution towards the capital cost of the wind turbines,avoiding emissions of 1,600 tonnes of CO2 during2007.
In November 2007, the Bank launched the world’s first credit card, aimed at rewarding ethical consumerism. The think card offers consumers a lower rate of interest for designated ethical purchases. It also allows customers to make an immediate difference to the environment. The card is made from
PETg plastic (a material that doesn’t involve vinyl-chlorine, which is used in the manufacture of PVC cards), and, the first time it is used, the Bank will arrange for half an acre of Brazilian rainforest to be purchased and protected in the customer’s name. Additionally, for every £100 spent on the card a further 25p will be donated to protecting the rainforest.
Ethical Finance
Since 1992, a customer-led Ethical Policy has directed The Co-operative Bank’s investment
decisions and in 2005 The Co-operative Insurance developed a customer-led Ethical
Engagement Policy. These policies result from detailed periodic customer consultations.
The Bank’s Ethical Policy governs the sectors and business activities which it will
and will not finance.
Since 1998, the Bank’s Ethical Policy has included the following commitment: ‘We will not invest in any business whose core activity contributes to global climate change, through the extraction or production of fossil fuels.’ During 2007,38 finance opportunities were referred to the Ethical Policy Unit in connection with these areas, of which four were declined, at a cost of £188,000; in terms of estimated income foregone in 2007.
In 2007, The Co-operative Bankapproved an £8 million finance facility for the construction of three onshore wind farms inCounty Kerry, Ireland, totaling 32MW; and a £10 million finance facility for the acquisition of a business engaged in the operation of 24 landfill gas power-generating facilities totaling 70MW. In addition, The Bank invested £9 million in Combined Heat and Power Facilities in two National Health Trusts and £600,000 in energy efficientboilers. Banking facilities were also approved for a company engaged in the production of biofuels from UK-sourced rapeseed oil. Currently, the Bank considersthe acceptability of biofuels production on a case-by-case basis, considering the sustainability of the feedstock source and access to land in developing countries.
Influence and action on climate change
As part of its approach to tackling climate change, CFS is actively involved in public policy lobbying. The aim of this involvement is to support the creation of the legislative and policy framework that will be necessary to bring about a low carbon economy.
During 2007, the Bank continued itsCustomers Who Care 'Combating Climate Change' campaign, in partnership with Friends of the Earth. For every £100 customers spend on Co-operative Bank Visa credit and debit cards, the Bank donates 1.25p to a campaign fund. Campaign activity for 2007 focused on the call for a strong Climate Change Bill, and the need for year-on-year targets for UK greenhouse gas emission reductions. Following a national advertising campaign and a range of direct customer communications, over22,000Bank customers directlylobbied their MP on the Bill, with every single MP being contacted by a Bank customer.
In October 2007, The Co-operative Bank and The Co-operative Insurance put their names to an Aldersgate Group letter to Hilary Benn, Secretary of State for Environment, Farming and Rural Affairs, and John Hutton, Secretary of State for Business, Enterprise and Regulatory Reform, calling for a common carbon reporting standard. In November 2007, a letter was sent to the Prime Minister Gordon Brown on the issue, asking him to support the introduction of enabling powers in the Climate
Change Bill to ensure UK companies report clear and comparable information on their emissions.
The Co-operative Insurance’s Ethical Engagement Policy commits the company to encourage investees to reduce their reliance on fossil fuels and increase their usage of renewable energies and energy efficiency. In 2007, The Co-operative Insurance commenced an engagement programme with companies to encourage them to develop and use biofuels from sustainable sources, and it has lobbied Government to speed up the planning process for wind farm developments.
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