What About My Bank?

The bank has an Ethiscore of 0.5 out of 20

With investment in everything from tar sands to cluster munitions Barclays is as far from ethical as you can get. The company might have an 'Environmental and Social Impact Assessment (ESIA) policy" but it's out of date (from 2009, with targets set for 2010 that it missed) and fails to mask the blatant disregard the company shows for both the environment and society through its investments and banking relationships.

Bonuses

Bob Diamond, president of Barclays Capital, has a salary of £250,000 but his bonuses are reported to reach up to £20m. ⇒ In 2010 five of the companies highest paid executive officers each received between £1million and £3.5 million in remuneration with the possibility of this rising to £11 million. ⇒

Tax Avoidance

Last year Barclays was forced to admit it paid just £113m in corporation tax in 2009 despite profits of £11.6bn, this represented just 1% of its profits. ⇒ At this time the bank also had 30 subsidiary companies in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands, all three are considered tax havens. In all Barclays has 1069 subsidiaries 36% of which are in tax havens. ⇒ These include ones in British Virgin Islands; Mauritius; Seychelles; Ireland; Cayman Islands; Singapore; Luxembourg; Guernsey; Bermuda; Gibraltar; The Bahamas; The Philippines; Monaco; Hong Kong and Malta.

According to The Guardian Barclays bank played a lead role in the establishment of a tax haven in Ghana, a move that the article said would see "huge mineral wealth in west Africa vanish into it from poverty-stricken countries' coffers." In fact the bank obtained an injunction in the High Court to stop the Guardian publishing other information relating to the companies tax avoidance schemes.

Environment

Research from Banktrack recently uncovered a host of environmentally damaging projects funded by Barclays. For instance since 2005 it has provided 11.514 billion Euro to finance coal fired electric powers stations and coal mining. ⇒

The Ecologist also slammed the bank for financing and investing in some of the most ecologically damaging energy projects around the world. ⇒ The magazine singled out two major projects.

• A Barclays subsidiary had been advising state-owned South African energy company Eskom on implementing a multi billion pound bond programme to finance the construction of the Kusile coal fired power plant. The coal fired power plant would be one of the largest in the world emitting 36.8 million tonnes of CO2 equivalent every year. The project was set to displace displace around 300 people.
• Barclays also owns and manages shares of more than £277 million in Freeport McMoran a company working in the Grasberg mine in Indonesia. The mine dumps 230,000 tonnes of waste in the nearby Aghawagon River every day making the water undrinkable and unfishable. The owners of Freeport have also been criticised for bribing soldiers and police to torture and murder members of the indigenous population.

Research from NuclearBanks.org found that Barclays provided 11.463 billion Euro of finance to the nuclear power sector between 2000 and 2009 - the second highest amount of all banking groups. ⇒

Meanwhile Ethical Consumer is calling a boycott ⇒ against Barclays for its involvement in the financing of the tar sands projects in Alberta, Canada.

Arms & Human Rights

Barclays is listed as banker to a number of arms manufacturers including BAe systems, VT Group, Cobham and Meggitt. The bank also invests in a number of arms companies including BAE Systems, Rolls Royce, QinetiQ, GKN, Babcock, Ultra Electronic, Chemring, Boeing, Northrop Grumman, General Dynamics, EADS, Finmeccanica, United Technologies, and ATK.

Moreover the bank even has investments in five companies (GenCorp, Lockheed Martin, Textron, Raytheon and Thales) that produce cluster munitions, a weapon strongly criticised by campaigners the world over for its long term impact on civilians. ⇒

Corporate Watch recently called for direct action against Barclays Bank as the British bank with the most substantial investments in Israeli companies, including companies based in Israeli settlements. ⇒

The bank also had operation in a number of other oppressive regimes including Zimbabwe; Saudi Arabia; Israel; Nigeria; Pakistan; India; the Philippines; China and Russia.

Lobby Groups

The Open Secrets database ⇒ shows that the bank spent $2,480,000 on lobbying in 2011

Its also a member of the following lobby groups:

• World economic forum
• American Chamber of Commerce
• The Business Round Table
• Institute of International Finance
• International Chamber of Commerce

Customers

The treatment of its customers doesn't appear to be much better. Last year Barclays was fined twice by the Financial Services Authority within the space of a week. The first fine, of £7.7m was for failing in the advice it gave to customers and selling them investments that were completely unsuitable. The second, of £1.1m, was for breaching rules on handling client money, failing to ring-fence it for the appropriate length of time.

You can find out more details about barclays on Ethical Consumers buyers guide to current accounts. ⇒

Santander has an Ethiscore of 4.5 out of 20

Spain's super-bank has expanded rapidly buying up a number of small banks along the way but it shows little concern for ethics.

Tax

The company has subsidiaries in a large number of tax havens including Bahamas, Hong Kong, Ireland, Luxembourg and Uraguay. Also, according to the company's website www.santanderpb.je, Santander Private Banking was based in Jersey. ⇒

Pay and Bonuses

In 2010 one of the company's executive directors was paid over 7m Euros, three were paid over 3m euros and two were paid over 2m euros. ⇒

Environment, Arms and Human rights

Bacosantandersinarmas.org , a website set up by NGOs in Spain to put pressure on Santander for its arms investments, notes that the bank has given loans and credit to Arms companies worth 705m Euro, has issued corporate bonds for arms companies with 154m Euro and holds shares in controversial investment funds worth 96m Euro. The companies financed include Boeing, Colbun, EADS, Textron, Finnmeccanica, General Dynamics, Lockheed Martin and BAe Systems.

The company has huge investments in a number of other unethical companies ⇒ , these include;

• Mineral extraction and energy companies, responsible for a range of environmental crimes, including Endesa Chile (US$ 19,22 million), Freeport McMoRan (US$ 2,25 million), Total S.A. (US$ 65,84 million) and Vedanta Resources (US$ 1,99 million) plus.
• Wal-Mart Stores (US$ 2,85 million) who have been criticised for a series of labour rights violations and its poor record on supply chain management.

Customers

Santander came bottom of the latest Which? Guide to banking with a customer score of just 39%, some distance behind the 60% average score. It was also the most complained about bank in 2010 and was worst an Which? investigation into on-line banking security. ⇒

Ownership

In one of Europe's largest cross-border bank mergers ever, Santander paid more than ‚€12 billion ($15 billion) for British bank Abbey National in 2004. It solidified its UK operations through the approximately ‚€1.25 billion ($2.6 billion) purchase of Alliance & Leicester. Abbey then acquired the retail deposit business of Bradford & Bingley after it was nationalized in 2008.

You can find out more about Santander Ethical Consumer's latest buyers' guide to current accounts. ⇒

Lloyds Group has an Ethiscore of 3.5 out of 20

Lloyds was another of the banks to receive huge amounts of tax payers' cash, yet like the others it has failed to take a more ethical stance since receiving it. It's still investing in arms companies and paying out huge bonuses despite the best efforts of campaigners.

Pay and bonuses

Lloyds' new chief executive's pay deal was worth up to £13.4 million while Eric Daniels was in line for a bonus of £2million in 2011 ⇒ plus another £2m from a long-term incentive plan. ⇒

Tax

In 2009 a case was brought against Lloyds by a department of the UK Treasury (HM Revenue & Customs) on grounds of tax avoidance. Lloyds was accused of pouring hundreds of millions of pounds into transatlantic tax avoidance schemes in the form of loans to American financial institutions. ⇒

Environment

The Ecologist reported that the Lloyds group has had significant shares in Vedanta Resources plc. Vedanta was behind the controversial mine in India's Orissa state which was situated on a mountain sacred to local people. The company was given the go-ahead to begin mining for bauxite in May 2009. Campaign groups had warned that the 600-hectare mine would result in ecological degradation that would threaten the livelihoods of tribal people. They said that several villages had been razed to make way for the construction of a refinery, with up to 100 indigenous families evicted from their land and relocated to 'rehabilitation colonies' where locals claimed they felt as though they were living 'in a jail' with little access to land for farming. A nearby bauxite refinery which was already in existence had been blamed for causing health problems, damaging crops and killing livestock. ⇒

The Bank is also know to have had significant investments in Royal Dutch Shell and notorious mining company Rio Tinto.

Arms and Humans rights

HBOS plc (a subsidiary of Lloyds) has been a principal banker for two arms companies: Babcock and Chemring. HBOS plc has also had shareholdings in BAE Systems, Rolls Royce, QinetiQ, GKN, VT Group, Cobham, Babcock, Ultra Electronic, Meggitt and Chemring. ⇒ Lloyds itself has invested heavily in Lockheed Martin, the US arms giant that has a long track record of making cluster munitions. In November 2009, Lloyds contributed $62.5m as part of a 12-bank syndicate when Lockheed issued bonds for a total of $1.5bn. ⇒

In 2009 Lloyds was fined $350million in the US over allegations that it had deliberately changed the identities of clients in Iran and Sudan in order to allow financial transactions to be processed from countries which were the subject of economic sanctions by the US government. ⇒ The company has also worked in a number of other oppressive regimes including Colombia, and Saudi Arabia.

⇒ Power and lobbying

Research conducted by the Swiss Federal Institute of Technology in Zurich found that Lloyds was the 26th most powerful company in the world. ⇒

Analysis of the relationships between 43,000 transnational corporations identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy. The researchers looked at the 43,060 TNCs and the share ownerships linking them and from that constructed a model of which companies controlled others through shareholding networks, coupled with each company's operating revenues, to map the structure of economic power. The research revealed a core of a of 1318 companies companies with interlocking ownerships. The researchers further untangled the web of ownership and found much of it tracked back to a "super-entity" of 147 even more tightly linked companies which controlled 40 per cent of the total wealth in the network. They found that less than one per cent of the companies were able to control 40 per cent of the entire network.

Ownership

Lloyds Group also owns HBOS and joint owns Sainsburys bank with Sainsburys.

You can find out more about Lloyds in Ethical Consumers buyers' guide to current accounts. ⇒

RBS has an Ethiscore of 1.5 out of 20

This tax-payer-owned bank still seems to be struggling to pay its taxes operating in a huge number of tax havens. Its record on treating the tax payers of other nations is also pretty poor, with its links to various arms companies and environmentally disastrous projects.

Tax

ActionAid recently found that Royal Bank of Scotland Group had 1303 subsidiaries 31% of which were in tax havens including Jersey, Guernsey, Gibraltar and Isle of Man. ⇒ The company itself boasts on its website that it offers "a full range of services to international clients including investment and portfolio management; tax, trust and estate planning; and stockbroking. We also work with offshore corporates and financial institutions."

Bonuses

In 2011 John Hourican, the head of the RBS investment bank received a £4.5m from an award of shares and options he received in 2009. ⇒ Sir Philip Hampton stood to receive up to £5.2m for shares he was awarded in February 2009 for taking on the role of chairman. Executive director Stephen Hester received a total of £3,267,000 in remuneration in 2010. ⇒

Environment

In 2011 RBS was named by the Ecologist as one the worst banks involved in financing fossil fuel companies. ⇒

• In March 2009, RBS provided £116 million in finance to Scottish oil company Cairn Energy. The finance was provided to help increase Cairn Energy' s drilling operations in Greenland. The same month RBS financed Irish oil company Tullow Oil' s operations in the sensitive Uganda-DRC border regions.
• In April 2007 RBS gave an estimated £1.2 billion corporate load to Gazprom, a Russian energy giant which has a majority stake in the Sakhalin Energy Investment Company (SEIC). Its vairous projects have been criticised for not consulting with indigenous communities and also threatening the last 120 critically endangered Western Gray Whales with extinction, as well as salmon which spawn in nearby rivers affected by the 800km of onshore pipelines.
• In August 2010 the Sunday Herald ran a front cover expose showing that RBS had provided nearly £13bn worth of finance to the oil and gas industries in the two years since it was bailed out by the UK public. ⇒

RBS's involvement in the Madagscar tar-sands project was also criticised. ⇒ The bank had given more the £300 million in corporate loans to energy giant Total to explore the region. Campaigns from WDM claimed that over 120,000 people living in villages within the Bemolanga oil field will have their water supply disrupted and land poisoned as a result of the tar sands project while working conditions and treatment of workers were at the site were also condemned. It was also estimated that after 30 years of commercial production, the government of Madagascar will only be receiving four percent of the oil revenues. Ethical Consumer have called a boycott against Royal Bank of Scotland for its involvement in the financing of the tar sands projects in Alberta, Canada. ⇒ Tar sands extraction in Canada is devastating First Nation communities, wildlife and vast areas of boreal forests, as well as being many times more carbon-intensive to produce than ‘conventional’ oil. ⇒

The Bankrolling Climate Change report listed the top 20 banks which had been financing coal fired electricity and coal mining since 2005. ⇒ Royal Bank of Scotland was number seven on the list having provided 10,946 billion Euro of such finance over this period. ⇒ In May 2010 the report 'Nuclear Banks - No Thanks' listed RBS as having provided 8.576 billion Euro of finance to this sector between 2000 and 2009 - the sixth highest amount of all banking groups. ⇒

Arms and human rights

In October 2010, RBS was part of a banking syndicate that provided the American arms manufacturer Alliant Techsystems with a $1bn (£600m) five-year credit facility, with RBS itself loaning $80m. It has also underwritten $110.1m in bonds to Alliant Techsystems and Lockheed Martin. All the above were know to manufacture cluster bombs. ⇒

Earlier research from War on Want found that Royal Bank of Scotland Group plc (RBS Group plc) was a principal banker of a number of companies involved in the arms trade. These include BAE Systems, Rolls Royce, Babcock and Ultra Electronic. The bank also has shareholdings in a number of arms companies including: BAE Systems, Rolls Royce, QinetiQ, VT Group, Babcock, Ultra Electronic, and Chemring. ⇒

In 2011 the bank was also involved in a dubious networking event entitled "Middle East ‚Äì a vast market for UK defence and security companies". Campaigners condemned the conference as evidence British arms companies were prepared to continue selling to authoritarian regimes in the Middle East despite the frequent use of both deadly and non-lethal weaponry to quell popular dissent during the Arab Spring. A flyer for the conference said that 'the Middle East remains "one of the regions with the greatest number of opportunities for UK defence and security companies". The publicity material, which featured an attack helicopter on its front, recommended Saudi Arabia, the UAE, Bahrain and Oman as lucrative clients that should be "targeted". All four regimes tolerate little dissent and are frequently accused of gross human rights abuses. ⇒

The tax-payer-owned bank did sever relations with Belarus following a campaign by human rights groups Free Belarus Now and the Index on Censorship. Index said that RBS and other banks had sold $1.85bn (£1.1bn) worth of government bonds over the past year helping to support the regime of "Europe's last dictator". However the bank still has operation in a number of oppressive regimes including China, India, Kazakhstan, Russia and Thailand.

Ownership

In the UK RBS also owns Natwest and Ulster Bank

You can find out more about RBS in Ethical Consumer's buyers' guide to current accounts. ⇒

The bank has an Ethiscore of 2.5 out of 20

From the Arab Spring to the use of unconventional fuel the 'world's local bank' has been playing a central role in some of the most pressing issues of our time. Sadly its actions only seem to benefit dictators and have added to the pressures on our fragile environment.

Pay

In February 2011 the bank handed around £1.2bn in bonuses to its 25,000 investment bankers for the previous year. Around £93m had been spent hiking the base salaries of HSBC's investment bankers. The highest paid Director received a total of £1,709,000 in remuneration in 2010.

Tax Avoidance

Action aid uncovered that HSBC has 1527 subsidiaries, 36% of which were in tax havens. Subsidiaries are incorporated in areas such as the British Virgin Islands, Panama, Bermuda, Luxembourg, the Cayman Islands and Jersey. ⇒

In one case from the UK HSBC moved millions of pounds of profits from an NHS private finance initiatives (PFI) into a Guernsey-based investment firm that it set up. The HICL company‚ previously HSBC Infrastructure Company Limited‚ made over £38m profit from the schemes and paid just £100,000 in UK tax, less than 1 per cent of the profits. ⇒

Environment

The Ecologist named HSBC as one the worst environmental offenders, involved in financing some of the most environmentally irresponsible projects in the world. ⇒ The magazine stated that:

• In 2010 HSBC under wrote or managed shares worth £122,240 for Archipelago Resources operating in the Toka Tindung gold mine of Indonesia. The six open-pit mines were responsible for groundwater contamination which led to the demise of the local fishing and tourism industries and threatened nearby nature resources and endangered species.
• In 2009 HSBC gave loans to a consortium of energy companies for a series of natural gas extraction platforms off the Burmese coast. HSBC is now the primary bank for the China National Petroleum Corporation (CNPC) who are the piping gas through the Shwe pipeline in Burma to Southwest China. No Environmental Impact Assessment had been made for the project which runs through many delicate ecological areas and the CNPC has been instigated conflict in the disputed areas in Burma. The use of Burmese military for protection has led to allegations of forced relocations, sexual assault and land confiscations.

HSBC has been financing coal fired electricity and coal mining to the tune of 4.432 billion Euro since 2005. ⇒ HSBC also provided 7.568 billion Euro of finance to the nuclear sector between 2000 and 2009 - the eighth highest amount of all banking groups. ⇒ In addition Ethical Consumer has called a boycott against HSBC for its involvement in financing tar sands projects in Alberta, Canada. ⇒

Arms and Human rights

HSBC Holdings plc was a principal banker for the arms company Meggitt in 2007. The Bank also has shareholdings in BAE Systems, Rolls Royce, QinetiQ, GKN, VT Group, Cobham, Babcock, Ultra Electronic, Chemring, General Dynamics, Thales and GenCorp, all of which are arms manufacturers or suppliers. ⇒

The bank also has operations in eighteen countries considered by Ethical Consumer to be oppressive regimes. These included China, Colombia, Iraq, Israel, Russia, Kazakhstan, Bangladesh and Libya. In 2011 campaign group Global Witness described HSBC as "key Western banker" for the Libyan Investment Authority holding oil revenues for the now ousted regime of Colonel Gaddaffi. ⇒

More recently HSBC colluded in a campaign of intimidation, waged by Egypt's ruling military council, against Human rights groups and NGOs. A number of NGO directors told The Independent newspaper that the persecution was worse than under former President Hosni Mubarak. The groups, which held Egyptian accounts with HSBC, said that over the previous two months the bank had contacted them requesting documents and information relating to their finances and work in Egypt. HSBC contacted civil rights groups and asked staff to provide a list of their future project and said it could release its accounts to the government if asked. A government commission latter published detailed findings on funding received by numerous NGOs and declared 39 organisations illegal ‚Äì including some of the most respected civil rights groups in Egypt. ⇒

Lobbying

The Open Secrets database reported that HSBC had spent $1,990,000 on lobbying in 2011. ⇒

It is a member of the following organisations know to be lobbying for free market policies all over the world:

• World Economic Forum
• International Financial Services London
• Business Round Table
• Institute of International Finance
• International Chamber of Commerce
• World Economic Forum

Customer

In 2011 HSBC was hit with a record £10.5m fine for selling unsuitable products to almost 2,500 elderly customers. The bank's NHFA subsidiary was also expecting to pay £29.3m in compensation for the way it advised elderly customers, who had an average age of 83, to buy investment bonds that were used to help them pay for their long-term care. In many cases, the five-year investment period for the bonds was longer than the individual customer's life expectancy.

Ownership

In the UK HSBC also owns the brands Midlands Bank (which includes First Direct) and Marks and Spencers Money (50% with Marks and Spencers).

You can find out more about HSBC in Ethical Consumers buyers' guide to current accounts. ⇒