Charity Bank becomes Europe’s first B Corporation bank
Charity Bank, a UK-based social purpose bank, has become the first bank in Europe to achieve certification as a B Corporation.
The ethical bank uses share capital from social investors and savings from socially conscious individuals to make loans to charities and social enterprises.
B Corporations are a new kind of status recognised internationally for companies that use the power of business to solve social and environmental problems. There are just under 1,200 B Corporations in 37 countries across 121 industries.
Patrick Crawford, Charity Bank’s CEO, said: “Many banks claim to be ‘different’ or ‘better’. The B Corporation certification and the rigorous standards it represents provide evidence that Charity Bank acts in a way that is true to its mission and is committed to supporting the creation of social benefit.”
Charity Bank was officially launched by the Chancellor of the Exchequer in 2002. It was registered as a charity by the Charity Commission and authorised as a bank by the Financial Services Authority. In 2013, it stopped being a registered charity in order to meet new capital requirements imposed on banking institutions following the financial crash and to meet demand for charitable funding.
According to Charity Bank's chairman in its 2013 Annual Report this restructuring was one of the main reasons the Bank made a loss of £804,000 for the year ending 31st December 2013.
The report forecasts "a modest loss in 2015" as the Bank continues to invest in the resources and infrastructure necessary for it "to become a major and permanent fixture in social finance" – but expects to "achieve sustainable profits" from 2016.
B Corporations are certified by B Lab – a non-profit organisation that was founded in the US in 2006 – and must meet certain standards on social and environmental performance, accountability and transparency.
Unlike traditional companies, B Corporations must consider the impact of their decisions on all of their stakeholders – their workers, suppliers, community, consumers and the environment – as opposed to just their shareholders.
B Lab’s UK representative James Perry said: “B Corps are important because they inspire all businesses to compete not only to be the best in the world, but to be the best for the world.
“Certified B Corporations meet higher standards of social and environmental performance, transparency, and accountability. It’s like Fair Trade certification but for the whole business, not just for a bag of tea or coffee.”
There are now six registered B Corporations in the UK in comparison with 776 in the US where the certification was founded.
Charity Bank is calling on other UK firms to “become certified B Corporations and join with businesses across the globe that promote wider social purposes”.
“If we build a community of certified B Corporations in the UK, it will make it easier for all of us to tell the difference globally between ‘good’ companies and good marketing,” said Crawford.
Volans – a UK-based B Corporation – is hosting a series of breakfast events for UK businesses interested in learning more about becoming a B Corp.
For more information please email Charmian Love, co-founder and director of Volans: charmian.love@bcorporation.uk
Photo credit: Gareth Jones