CIS decides to flex ethical muscles

Co-operative Insurance Society will soon be the first insurance company to incorporate policyholders' ethical views about the companies where it invests for its investment, life and general insurance businesses.

The CIS has had a responsible shareholding programme since 1999, but following a year-long consultation with customers, it now has a clear mandate on specific areas of concern to policyholders.

Barry Clavin, SRI policies manager at CIS, says: 'The top issues are the environment, human and labour rights, animal welfare, how things are marketed and social inclusion.' The consensus was that responsible investment and decent returns should go hand in hand: 'The people for whom money came first were in the minority.'

Clavin does not foresee an increase in premiums: 'We never believe that people should have to compromise for ethics so the pricing has to be competitive. We have to generate sufficient returns to make us attractive and be ethical at the same time.

'We now have a detailed action plan based on the ethical issues that are most important to our customers. As a major shareholder with £21 billion of assets, we will be able to tell companies that our customers have a real concern with a particular aspect of their business. We will then try to influence that company to change.'

The CIS has been in dialogue with Total for a number of years about its presence in Burma: 'We told Total to look at this and they said they were. But we are now at the stage where we have told them we think they should be moving out of Burma.'

As long as it believes it can influence the company, CIS will maintain its investment in Total: 'We are a mutual life business and have a fiduciary duty to give priority to the financial interests of our beneficiaries, our customers. If there was evidence that this started to impact on shareholder value, legally we would have to start disposing of shares.'

Its sister company, the Co-operative Bank, attributes one-third of its £132 million profits to its ethical and sustainability policies launched in 1992.

Figures released tomorrow show an increase of 29 per cent in the number of loan and savings account customers joining for ethical reasons.

But refusing business for ethical reasons has also cost the bank money: £8.7 million in 2004 against £6.9m the previous year.

Saving accounts interest rates slashed

The base rate may not have moved since August 2004, but this has not stopped a number of providers slashing the rates they pay on savings accounts. Rachel Thrussell, the head of savings at Moneyfacts, says: 'Savers need to keep an eye on the interest rate they are being paid and check whether they can get a better deal elsewhere.'

She says providers that have cut savings rates include Birmingham Midshires (rates reduced by up to 0.35 per cent), Norwich & Peterborough (up to 0.25), Progressive (up to 0.1), Sainsbury's Bank (up to 0.75) and West Bromwich (up to 0.25). Consumers can find best buy savings products at moneyfacts.co.uk

Senior equity


Mortgage lender Bristol & West has launched an equity release product fixed at 6.65 per cent for the term of the loan. The mortgage allows homeowners aged between 60 and 64 to borrow up to 20 per cent of the value of their home, increasing to 45 per cent for those aged 85 and over. The loan can be taken against any property worth more than £50,000.

Charlie Goldsmith, of Savills Private Finance, says: 'The best thing about the product is that it has a very good rate - just about the best around.

'However out clients tend to look at how much they can borrow and the loan to value is about 5 per cent less than some other loans on the market.'

The trade body Actuarial Profession released a report earlier this year advising people to consider all other options for generating cash before signing up to an equity-release scheme.

Phone home


Holidaymakers irritated by the hassle and cost of checking their voicemails from abroad can benefit from a service, available on the high street from this month, that converts voicemails to text.

Picking up voicemail from abroad can cost up to £1.40 a minute on the major networks. SpinVox,the world's first voicemail-to-text service, costs from 19p a text and is available for a free trial at www.spinvox.com com or Carphone Warehouse stores.