Amid our breathless exaltation of the new world of impact investing, we often forget about the humble Mutual Bank as a model for cooperative business.
Teacher’s Mutual Bank Limited (TMBL) has been operating for the good of its members for more than 55 years, and they’ve now added B Corp certification to their list of purpose-led accolades.
Mutuals recognise their customers are also members, and rather than distributing profits to shareholders, they feed excess returns back into the business, for the good of all members.
In Australia, industry super funds operate with a similar model, managing hundreds of billions of dollars, and allocating operating profits back into the business, to lower fees and expand the business. Mutual banks get less attention, despite the huge positive impact they have on local communities.
It’s also worth noting that Mutuals can be innovative too. TMBL has just spun-out a neobank, called Hiver.
Navigating the certification process to become a B Corp is never easy, and for TMBL it took 16 months. They’re a big organisation, with more than 220,000 members, managing almost $10 billion in assets.
“The mutual banking sector currently has a unique advantage to be ethical leaders in the finance industry, thanks to our history of strong customer bonds and reputation as purpose driven organisations. We’re keen to build on our 55 year history as an ethical organisation and immerse ourselves in the global B Corp network to help drive the movement of banking for good.” says Steve James, TMBL CEO.
The bank’s approach to social responsibility focuses on excluding harmful industries, they won’t lend to, or invest in sectors like fossil fuels or tobacco.
They’ve been named one of the World’s Most Ethical Companies eight years in a row (by the Ethisphere Institute) and are the only bank in Australia to have all wholesale and retail mortgages and deposits certified as responsible by the Responsible Investment Association of Australasia (RIAA).
In terms of their operations, they’re been net zero for their direct greenhouse emissions since 2012.
“Businesses have a big role to play in creating a healthy and sustainable society. As consumers place growing pressure on businesses to act ethically and responsibly, greenwash is an increasing problem. B Corp is the path forward for businesses looking to verify their commitment to building a better world. Unlike other ESG certifications for businesses, B Corp is unique in its ability to measure a company’s entire social and environmental impact across all operations. It’s the antidote to greenwash.” says Corin Millais, Head of Socially Responsible Banking.