Fair Finance Guide International

A high impact consumers tool
Through its investments and financial activities all over the world, the banking industry is a major actor on sustainable development, poverty reduction and human rights. Banks finance and own countless companies, projects and activities. Their financial services and trading activities have enormous impacts on societies and the environment. Civil society groups are not only interested in ensuring the do no harm principle in the banks’ operations, but also to progressively raise the transparency and accountability of banks, and improve their policies and behaviour on sustainable development, poverty reduction and promotion of human rights in short, corporate social responsibility (CSR). For this to happen, it is crucial that the public receives well-researched information on bank policies and practices to inform their choices and actions as responsible citizens, in casu bank clients.   

Introduction: Race to the Top
The aim of the Fair Finance Guide tool is to initiate a ‘race to the top’ between banks on CSR, transparency. Ideally, a self-reinforcing process will develop in which social, environmental and economic standards are raised continuously. Ultimately resulting in sustainable credits, investments and asset management all over the world. The Fair Finance Guide contributes to banks’ CSR policies and practices on a wide variety of issues, benefiting a wide audience. It stimulates consumers/bank cients to critically compare their own bank’s CSR policy with that of other banks and to address their bank on its shortcomings. The Fair Finance Guide is a web-based tool enabling bank clients to make their bank more socially responsible, fair, and sustainable by benchmarking them on some twenty themes and sectors. The initiative is the first of its kind to systematically assess banks’ management of sustainability and poverty-related issues. In the Netherlands The Fair Finance Guide has become very successful in promoting awareness and has resulted in direct improvements not only in banks’ policies but also their practices.

The Fair Finance Guide assesses banks’ policy on various social, economic and environmental sectors and issues such as climate change, human rights, labour rights, arms trade, transparency and sectors like oil/gas, fishery, agriculture, forestry, banking etc. The database is accessible to the general public at no cost. The initiators of The Fair Finance Guide focus on following activities:

  • Assess the banks’ policies every year and giving scores for each policy;
  • Compare the policies with empirical case studies and draw conclusions about the extent to which the banks follow their own policies;
  • Conduct a dialogue with banks and give feedback on their (draft-)policies, implementation of policies, transparency, concrete sustainability issues etc;
  • Involve consumers/bank clients through (social) media in critically assessing the policy of their bank, and stimulate them to put pressure on their bank for more sustainable investments, transparency and accountability.
  • Organise media pressure by publishing the scores of banks on all themes and sectors and on the case studies.
  • Translate proposals for improvement of banks´policies in  policy recommendations for more stringent regulation through policy work with parliamentarians and ministries.

The Dutch Fair Bank Guide (Eerlijke Bankwijzer) was formally launched on 22 January 2009. It is an initiative commissioned by Oxfam NovibAmnesty International NetherlandsDutch labour union FNV and Friends of the Earth Netherlands, Dutch Society for the Protection of Animals, and PAX .

The research is done by the economic research agency Profundo. The Dutch Association of Investors for Sustainable Development (VBDO) functions as advisor to the Dutch Fair Bank Guide initiative. Banktrack’s December 2007 report ‘Mind the Gap’ served as inspiration for this initiative.Results and Impact

Results and Impact
The Dutch Fair Bank Guide started in 2009 in reaction to widespread outrage over investments in the weapon industry. Three months after the The Dutch Fair Bank Guide came into being, several banks had taken several steps to improve, tighten and better apply their policy on arms trade. 

  • In the following five years it contributed to over 165 measurable changes in banks’ policy – not only in arms trade policy but also on human rights, climate and policy with regard to bonuses. In addition, valuable steps have been made in terms of investors’ commitments to improve sustainability of their investments.
  • In the first 5 years about 529.277 people visited the website and 17.017 people have sent messages to their banks asking them to improve their policies and better their practice and approximately 31.557 people have clicked the ‘cross-over to another bank’-button. Whether or not these visitors actually changed from bank is difficult to measure.  
  • Valuable steps have been made in terms of investors’ commitments to improve sustainability of their investments.  In 2013 seven bigger Dutch banks improved their policy on sustainability on in total themes and sectors
  • In 2009 the CEOs of all banks benchmarked in the The Dutch Fair Bank Guide published a common statement "Dutch banks call for clear agreements on sustainable energy". In this statement all banks stressed the importance of more investments in sustainable energy. In their statement they stressed that they have all signed the ‘Copenhagen Communiqué’, were willing to cooperate in a study on sustainable energy of the Dutch Fair Bank Guide and also called on the Dutch Government to introduce a long-term and clear (legal) system that encourages investments in sustainable energy projects. In 2010 we took stock of the percentages that Dutch banks invested in sustainable energy between 2007-2009. Two years later (2012), we did the same for investments in energy between 2010-2011. This showed that investments in sustainable energy increased to 96% of their total investments in energy.
  • In December 2013, ABNAmro (both Bank and asset management), ING Bank (Banking) and SNS Reaal (asset management) made a written statement that from 2014 they will use more instruments to prevent that via their investments they provide services to extractive companies which do not take serious their responsibility for respecting human rights.Currently, we are working on a new CEO-statement on Climate for the Ban Ki Moon UN conference in Sept. 2014.
  • In March 2014 The Dutch Fair Bank Guide organised with Ernst&Young (EY) and  the Ministry of Finance a conference on Transparency of Banks with 40 representatives of seven big banks, the Dutch Association of Banks (NVB), four Accountancy firms, three Ministries, the Dutch Central Bank (DNB) and the Authority on Financial Markets (AFM), experts and 6 Fair Bank Guides NGOs and  etc.. The Dutch Fair Bank Guide and EY agreed with the NVB and the three Ministries to draft a covenant on banks and transparency.
  • Dutch banks and insurers invest billions in the top companies in the extractive sector. These were researched on human rights abuses against the local population, e.g. the right to information, to health and to water. Under pressure of the The Dutch Fair Bank Guide most of these Dutch banks are engaging in a critical dialogue. The conclusion is that banks adopted not enough the need to prevent and end human rights’ abuses. Three quarter of the financial institutions limit themselves  to stimulating extractive companies to introduce a good HR policy and actions on process. Compensation of victims of HR abuse do not get enough attention. Only a quarter of the financial institutions ends its investment if a company is not prepared to agree on policy change.  

You can read all the results in the '5 years of the Dutch Fair Bank Guide' report. 

Fair Finance Guide International
Fair Finance Guide International (FFGI) is a project that aims to organise and create additional civil society capacity in – to start with - seven countries (Belgium, Brazil, France, Indonesia, Japan, Netherlands and Sweden) to evaluate and monitor commercial banks’ policies and practices, and to mobilise bank clients to request and presible banking sector.This seven-country project is funded for three years by the Swedish Agency for International Development (Sida). The creation of Fair Finance Guides in more important banking countries will follow in the next few years. The project establishes a joint methodology for research and analysis of bank policies and practices, provides evidence-based support for critical dialogues with banks, and stimulates campaigning and agenda-setting on regulatory policies, social responsibility and development relevance of the main banks. The project builds on a pioneering model developed in the Netherlands since 2009, which was followed by a similar initiative in Brazil in 2011, both of which demonstrate leverage and potential for bringing about change. 

FFGI will fill the gap of a global and comparable standard for responsible banking, which is based on widely accepted international norms and conventions. It will unite various civil society interests covering the broad social and environmental issues which banks impact. The project is expected to lead to improvements in the CSR policies and practices of banks, more informed engagement by the public, and more awareness and debate about banks’ responsibilities towards society. Read more on wwww.fairfinanceguide.org 

Bankwiser International

Interested in joining?
In collaboration with different parties we are pursuing the internationalisation of The Fair Finance Guides. Several organisations in different countries have shown genuine interest in starting up a Fair Finance Guide in their country. To know more about how your organisation can join the initiative, please contact: Ted van Hees, Coordinator Fair Finance Guide International: ted.van.hees at oxfamnovib.nl.