Paul Monaghan

Bank ethically 1st of May 2009

Bank ethically

There is something about Paul Monaghan’s brown shirt, undone at the collar, and his tightly cropped hair, that gives him the air of an activist. It’s not the image that I expected to find in the big corner office of a corporate headquarters. I imagine that fifteen years ago, when Paul was running a campaign to boycott high street banks involved in third world debt, he would have been surprised to find himself here too. Under his leadership, the Manchester University Students Against Third World Debt convinced 32 university campuses to boycott Lloyds and Midland Banks. It was 1994 and he wanted to offer student unions an ethical alternative. The closest he could find was the Cooperative Bank. Paul explains: “I approached them and said ‘Why don’t you do a student account? Get your sh*t together and I can get you all these union accounts and personal accounts!’” Terry Thomas, the then managing director, spotted Paul’s potential and made him an offer: “You’re very good at telling people what to do. Come and work for us!”

Paul comes from a family with seven children and says that he always had “a mission to make a difference”. His political activism was inspired by his father, who was very involved in the British Leyland strikes of the 1970s. His passion for the environment was born out of a childhood playing in the wetlands that had developed on top of disused mines behind his family home in Wigan.

Paul started off at the Coop Bank by running the ecology unit on a one year consultancy contract. The bank had first implemented an ethical policy in 1992 and since then all investments have gone through ethical checks. In 1992 those checks were done by one person. Now a team of thirty are needed and Paul manages them. He’s the head of Social Goals and Sustainability for the whole Cooperative Group and as he explains, “everything from the pesticides that we use in our food business, to the funeral care and the pharmacies, every bit of business that the Co-op Bank does, goes through this unit.”

Their ethical policy is customer driven by large-scale surveys. Consequently, the Coop has tackled tough issues like animal testing and climate change long before their competitors. As Paul describes it: “17 years ago it was radical to say ‘don’t test cosmetics on animals’, but we did it. It sounds ridiculous not to oppose blood sports now, but we did it before everyone else.” In 1996, Paul convinced the board of the bank not to be involved in the financing of the extraction and processing of fossil fuels. “This was radical stuff back then. Look at it now and it was quite prophetic. I was surprised to get the thing past the board. I was amazed. But sometimes you have a good day!” he smiles.

Paul continues to strive to keep the Coop ahead of the curve on ethical thinking. He’s not afraid to diverge from the crowd on hot issues. The Coop supermarket, unlike others, decided not to use airplane labels to raise awareness about the environmental impacts of air freighting. “If we want to reduce the carbon footprint of food, first we need to discourage meat and dairy, then food grown in heated green houses. Only after that does air freighting become important.” Such intellectual rigour is sadly missing in many ethical debates. For Paul, thinking things through is paramount. He surrounds himself with the people who can help him sustain these high ethical standards. When I ask how other people could get into his line of work, he tells me: “I need more people who can be as meticulous about carbon as they can about money.”

But stringent ethical checks, such as those the Coop carries out, do have their downsides. Paul says it causes inertia when every investment has to be screened. However, the Coop Bank is definitely reaping the rewards of its prudence now. “We are one of the few banks that are not going cap in hand to the government. We weren’t playing around with derivatives. We have been making profits while others have been losing millions.” Consumers have noticed this too. “In the last twelve months the Cooperative Bank has seen a 60% increase in current accounts and a 40% increase in deposits, as people have been walking out of RBS and Lloyds and walking in here,” Paul explains.

Thanks to their recent financial success people are paying more attention to the way the Coop does business. “I love working here. It feels like it’s a place to be. People are questioning capitalism and the plc model. Models such as mutualism and cooperation which were not seen as particularly exciting are now being reconsidered.” After 15 years working for one company, I bet not many people feel so enthusiastic about their place of work.

I can tell that Paul’s mission is about much more than just ensuring that the Coop put their money in the right place. He wants to bring about social change on a wide scale. One of his objectives is to mobilise people around key issues. Earlier this year the Coop Group arranged 40 showings of a film about the demise of the honey bee. “We invited people to turn up for free and see the movie and told them what they could do”. I wonder whether this is just clever marketing aimed at consumers with a conscience or a demonstration of true corporate responsibility. Paul says “You’ve got to get out there and do stuff” and I suspect he means it. The activist of the mid 1990s isn’t so far beneath the surface.