Coutts Now Starts With B audio version  |  12 mins  |  Listen now

But identifying a single score that could measure Coutts’ progress on the sustainability front was incredibly difficult, as it needed to encompass all the bank’s activities on the social front, its environmental initiatives and how well it was governed.

Step forward B Corps, with the mantra: measure what matters. ‘We both thought this is what we should look at,’ explains Robb, who has now moved to a new role as wealth manager at Coutts. ‘It provides you with a score across all the areas and covers everything in such detail, from new customers to your supply chain, your environmental footprint to what you do in the community. It would also demonstrate that we are committed to this, as well as committing us to improve.’

The first step to becoming a B Corp is to complete a questionnaire comprising 250 questions, divided into five sections: governance, workers, community, environment, and customers. ‘I probably speak to a client a day about the B Corp process, and I say that the first thing they should do is to go onto the online assessment and see how they fare. That is what we did,’ explains Robb. ‘We did an estimate on what we thought roughly, and looked at where our score would be. I think at that stage, we were in the mid-60s, which is around the average score for most businesses who try out the assessment.’

A company must score a minimum of 80 on the B Impact Assessment to achieve B Corp accreditation, but Robb points out, completing the assessment provides an insight into what needs to be worked on to achieve the requisite points. Adopting a specific form of language into a company’s Articles of Association, to reflect a company’s commitment to creating a positive impact on society and the environment, brings in an additional seven-and-a-half points.

‘That helps,’ admits Robb. ‘We realised that, while there were a few things we needed to do, we were actually in a pretty good position.’ Indeed, in the two years following Robb’s appointment as head of sustainability, her team, backed by the board of Coutts, had made great strides embedding sustainability across the organisation. The bank was already applying an ESG lens to its investment portfolios and had exited services, such as tax advice, that did not fit with its new ethos.

As a regulated business, it was also confident about its governance credentials and its parent company NatWest already had in place stringent policies on environmental, social and ethical areas, and restrictions on the types of businesses to which it would lend, such as fossil fuels and firearms, to which Coutts also adhered.

‘After our initial assessment, we thought We can do this and so we embarked on a huge data pull,’ explains Robb. This major project involved the bank’s HR team, its supply chain colleagues and its property teams, who mapped its environmental footprint. ‘It was a huge co-ordination exercise,’ she adds.

Initially, the bank scored quite low on its environmental credentials. The reason? NatWest ran the footprint, as it does for most of its franchises, so while NatWest has a target to achieve Net Zero for its operations, Coutts does not. ‘B Corp asked if we had set a paper reduction target, and we had to select no because we, as Coutts, hadn’t. We did explain this, and ask if it could count because we are still doing this and getting measured on our progress, but because it was at NatWest level and not at Coutts, it didn’t,’ says Robb. ‘So, there were a few areas that we hadn’t scored as well as we ought because of that structure, and that’s what we are focusing on now – making sure these are Coutts’ targets. Our Exco also got behind this so we can clearly say this is what we are doing.’

Another issue for Coutts related to its green mortgage. The bank had previously launched a product which incentivised clients with reduced rates to improve the efficiency of their homes, but while Coutts gained recognition for the product, it got few points because, as a percentage of its total mortgage book, it was still very niche. 

Nonetheless, this has not deterred Coutts which is looking at how it can tweak existing products to better meet the current environment, such as a green concierge service to help clients identify ways to improve their carbon footprint. It has since launched a pilot service with Anthesis Group that will support 30 clients through an end-to-end house retrofitting journey to improve their homes’ energy efficiency. And it now aspires to issue at least £750 million green mortgages to its clients, and to have 50 per cent of its mortgage book secured against homes with an Energy Performance Certificate rated C or above by 2030.

‘Where companies have real, true ethics at their core – for example, Tom’s Shoes [where for every pair you buy, a pair is donated to a child in need] is the sort of business that will get very high scores because they can really embed it throughout their entire supply chain and operations,’ explains Robb.

‘One of our questions, where we knew we might not get any points, was about how many accounts we would open for the underserved populations or those who have just left institutions. It’s not our business model: we focus on high-net-worth individuals, and we focus on helping them become more philanthropic.’ (Coutts specialises in customers looking to borrow or invest at least £1 million.)

Robb adds: ‘You have to accept that there will be some questions where you’ll always have a low score because the questionnaire varies only very slightly depending on the size of your business and the type of business you are in. But there will be other questions, many more, that we can really focus on and improve our scores.’

Going through the questionnaire in more depth, Robb admitted it was ‘a lot broader’ than she initially expected. There is no minimum score for any of sections. ‘You can have an area that’s a little bit weak, but your other areas could bring up [your overall score],’ she explains. ‘It’s not meant to be impossible. They want people to see this as a challenge, to be able to reach it and then to continue to improve. The whole point is to get people to agree to commit to a journey of improvement.’

But Robb was also impressed by the transparency of the process. While there are five public sections, there is an additional section – which does not contribute to the overall score – but which focuses on the types of industry with which a company may be involved. B Corp has a list of approximately 12 sensitive industries, which, if a company was heavily involved with, may preclude accreditation.

B Corp is pragmatic, however, so while the alcohol industry is viewed as sensitive, several beer companies are B Corps. ‘It’s not a complete no, but they like to find out your policies and how you might help in those areas,’ she explains. ‘Obviously we have commercial clients, which, for example, might be in brewing. We were very transparent. B Lab knows the number of clients we have in an industry they deem sensitive and our revenue from that. On our ethical, social policies, we don’t have alcohol as a standout; we focus more on coal, oil, gas and firearms, things like that.

‘But they change the assessment every three years; it gets harder. If alcohol was then seen to be as dangerous as tobacco, for example, that might become more of a focus. Or other industries might be added [to the list of sensitive ones].’

Coutts embarked on the accreditation process in January 2020, and submitted its completed questionnaire the following December. It achieved its B Corporation status in July 2021, becoming the largest private bank and wealth manager in the UK to do so. Its overall B Impact Score, as defined by the questionnaire, was 83.2, with the bank scoring particularly well in the governance (15.6) and workers (35.2) sections. Its environment score, however, was just 7.7.’

We had to join a queue because there are now so many businesses wanting to become certified and B Lab is quite a small not-for-profit,’ adds Robb. ‘For at least two months, we were in the queue. We are a large organisation. We had to collect all our data, then we had quite a few sign off processes. Our executive team had to sign off, then our board had to sign off, then NatWest’s executive team had to sign off and then its board had to sign off too. Smaller businesses probably wouldn’t have all that sign off process.’

While Coutts is regulated by the Financial Conduct Authority, it did not need its approval to change its Articles of Association. ‘They haven’t specifically commented on our B Corp status. I think Section 172 of the Companies Act quite clearly defines the board’s responsibilities for considering all stakeholders,’ adds Robb. ‘The change in our Articles and our focus on considering all stakeholders is very much aligned with that, it just goes one step further.’

Rather than simply announce it had achieved B Corp status to its 1,700 plus employees, Coutts was transparent about its intentions, telling them that it was embarking on a journey in which it wanted them to participate and really understand. ‘People are very proud. When [we achieved B Corp] we sent an email from our chief executive to all our staff and clients. There was a great buzz,’ says Robb.

The announcement acted as a ‘unifying force for staff’, who could relate to the ethos of the B Corp initiative and see how it could positively impact their relationships with clients. Coming in the middle of a global pandemic, when there was an increased focus on climate, it had resonance.

The windows of the bank’s historic headquarters on London’s Strand announced the news, and displayed other B Corp brands to demonstrate that it had become part of a community of like-minded businesses. ‘We also made a real effort to join as many of B Corp’s sub communities as there are and to speak to all our clients about this,’ she adds.

Coutts describes its B Corp status as the culmination of a long journey, but also the start of another as the bank seeks to work with clients interested in the process and partner with other member organisations, sharing insights and ideas. At the time of its accreditation, Coutts had around ten clients in its commercial arm that were also members. They automatically received an extra point for banking with Coutts.

‘We don’t get any points for having B Corp clients, but we don’t mind,’ adds Robb. She thinks the free point is smart. Coutts wants its clients to have sustainability plans, because the bank wants them to be around as long as possible.

‘If they’re a sustainable business thinking about these things, which we think are important, they’re more likely to be able to repay loans. The B Corp certification is so good because it’s all about being profitable but in the right way: purpose with profits. There’s no point in being an incredibly purposeful business if you’re not going to be able to survive for two years because then you can’t have an impact.’

Coutts' first Impact Report outlines the progress achieved in its first year as a B Corp, as well as its aspiration to achieve a score of 90 when it seeks re-accreditation in 2024. It also highlights initiatives driven by its membership of the elite club, such as a junior management team that works closely with its executive team, and will join board meetings to ‘provide diversity of thought and counsel’, as well as the launch of its team of B-Keepers.

This working group identify opportunities to improve B Corp scores year-on-year, as well as highlighting areas at risk of decline. Seen as the ‘conscience of Coutts’, this team will work with the bank’s sustainability team and executive committee to factor in B Corp scoring into work being delivered. Coutts’ aspirational score of 90 seems within reach.