British Isles banks have too many CSR blind spots on human traffickingApril 2011
British and Irish banks should consider a far broader range of CSR issues than the present focus on financial stability permits, says a report by the Ecumenical Council for Corporate Responsibility (ECCR).
In The banks and society: rebuilding trust, the faith-based investor coalition says that although the financial crisis following the banking sector’s collapse has rightly brought a revaluation of banks’ basic financial sustainability, an adequate response to many other issues is needed if the industry is to regain public trust.
The key issues the ECCR thinks are being left behind are financial inclusion, transparency about lobbying, irresponsible lending to environmentally and socially destructive projects, money laundering from developing countries, tax avoidance and non-payment, and a continued resistance to regulation.
The report’s lead writer, Suzanne Ismail, said: ‘Many banks recognize some responsibility in these areas. But most do not integrate social and environmental issues effectively into their business activities or behave with enough transparency for outsiders to make informed ethical judgements.’
The ECCR gives comprehensive advice on what banks should do about the issues they have not tackled. On tax avoidance, for example, it recommends that banks report on all taxes paid on their profits country by country, that they should ensure that customers know their own tax obligations, and says they should refuse to give tax planning that does not serve ‘genuine business transactions’.
The highlighting of tax avoidance comes after Barclays admitted to paying less than one per cent of its £11.6billion ($18.8bn, €13.4bn) profits in UK corporation tax, which has a 26 per cent rate.
Lord Oakeshott, the UK’s former Liberal Democrat treasury spokesman who recently resigned over the government’s handling of bankers’ bonuses, said: ‘Companies... produce enormous corporate governance and social responsibility reports – most of which is expensive guff – but they don’t seem to regard paying their fair whack of British tax as equally important.’
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