Organisations today are increasingly concerned with the image they portray to their customers, staff and other stakeholders. Many modern organisations like to take into consideration the role they play in the wider community. Large multinational companies also realise that there is importance in understanding and working with local communities and acting in a socially responsible way.
In the world of Mutuals, this is the basis of their being and it certainly isn’t a new concept for them. Customer Owned Banks were designed for the ‘greater good‘ of their chosen community. This is generally the appeal for most of their customers (who are actually members of their institutions).
Teachers Mutual Bank Limited (TMBL) has recently been recognised for their efforts for their Social Responsibility. TMBL has become the only Australian company to be recognised as one of 2019’s ‘World’s Most Ethical Companies’ by the global ethics body ‘The Ethisphere Institute’. The bank was one of only five banks globally to receive this citation. (https://www.tmbank.com.au)
So why did TMBL receive this acclaim? TMBL is the largest financial institution in Australia to certify deposits and mortgages as socially responsible under the Responsible Investment Association Australasia (RIAA) guidelines.
According to TMBL’s website the RIAA guidelines that have been implemented at TMBL bank will mean:
TMBL ’smembers can have confidence their lending is responsibly sourced (80% of funds from other members of the bank).
- Member deposits are responsibly screened to exclude 14 harmful activities, including gambling, tobacco, and fossil fuel lending.
- TMBL is currently the largest Australian bank to certify its deposits and mortgages as socially responsible.
In an age where people want to know if their coffee is sustainably sourced, their veggies are organic and recyclables are actually being recycled, this award is very timely.
These priorities will resonate with Millennials. As Tony Schesser, CEO of Instil- Engaging bright minds states “Social responsibility matters. It always has, but in banking perhaps now more so than ever in light of the recent Banking Royal Commission.”
Tony goes on to discuss how TMBL and other mutual banks (including Bank Australia), are leading the way in positioning customer owned banks as both a trustworthy and socially responsible alternative to major banks and other listed approved deposit-taking institutions.
In a recent presentation to the Instil Industry Strategy Forum, Tony notes how Corin Millais, Manager of Ethical Business Strategy at TMBL shared research by Morgan Stanley suggesting “millennials are putting their money in sustainable investments at a rate that is two times higher than average. With a $30 trillion wealth transfer coming to millennials in coming decades – this is not likely to stop anytime soon.” The Deloitte Millennial Survey 2018 also suggests “Millennials' opinion of business’ motivation and ethics is at its lowest level in four years”.
“Ethical business matters for all Australians, however, the millennial market is of keen relevance to mutuals, and the leadership being demonstrated by Teachers Mutual and others in this space will no doubt better position them for the next wave of financial consumers, for whom social and ethical business principles clearly matter.” (Tony
An Australian Organisation called ‘Market Forces’ exposes the institutions that are financing environmentally destructive projects and campaigns to Australians to hold these institutions accountable. Unsurprisingly, on their ‘good list’ you will find an array of Customer Owned Banking institutions. Check them out here.
Obviously, it is time for the bigger institutions to take a leaf out of the Customer Owned Banking book. TMBL are paving the way in Australia and we hope others start following their path- really soon!