Labor promotes a decree to regulate ethical banking and accuses large entities of investing in weapons or polluting energy

The Ministry of Labor and Social Economy is promoting a decree to regulate ethical banking and the entities that make up the so-called social economy (organizations such as cooperatives, mutual societies, foundations…). The idea pursued by the department directed by Yolanda Díaz is give visibility and promote through subsidies to entities that meet a series of requirements and, at the same time, passively expose the activities of big banks, which the ministry considers harmful.

Sources from the ministry headed by the second vice president They consider that the country’s large financial entities invest in the arms businessin polluting activities or in activities contrary to human rights. With this initiative, according to these sources, Labor seeks to ensure that citizens know what happens with the resources that their entities have deposited and to surface, even if it is through passive means, the unethical behaviors that exist in big banks, in their opinion.

However, in strictly normative terms, The decree that Labor has prepared only concerns entities such as credit cooperativesfinancial services, foundations with financial activities in the social economy or associations that promote aid to groups at risk of social exclusion. The clearest example of entity are the dozens of rural savings banks that exist in Spain. Large financial entities are expressly excluded from the rule, but Labor trusts that, by promoting those that do comply, it exposes itself to all those that do not.

In fact, the decree limits itself to setting the criteria that these financial entities of the social economy must meet for the central administration to consider them ethical. The consequence of obtaining that status is that They will be eligible for a series of specific subsidies and will receive public support to increase their visibility, or encourage their participation in training processes, ethical financing projects or similar issues.

However, the text does not establish any type of sanction or retaliation for cooperatives or foundations that proclaim themselves ‘ethical’, but do not meet the ministry’s standards. To achieve this ethical status in the eyes of the Government, the entities must meet up to ten requirements that must be fulfilled in their entirety.

Among them, It is required that they not finance the arms industry, gambling, the use of fossil fuels or initiatives contrary to affordable housing. These entities are also required to ensure that the salaries of managers do not exceed seven times the salary of the employee who earns the least.

Furthermore, to be considered ethical banking, organizations must prioritize social and environmental impact before maximizing profits, they must reinvest 75% of your profits; allocate at least 20% of its lending activity to finance NGOs or social economy companies for at least three years or promote gender equality.

According to Labor sources, the decree has been negotiated with the Ministry of Economy and has the support of this department, something that has not yet been confirmed by Economy. The standard has already passed the hearing and public information phase, but now must collect reports from advisory bodies. Furthermore, it has already received allegations from the main banking employers, who do not view the ministry’s approach favorably. The same sources maintain that it would not be necessary for the rule to go through Congress, so it would be enough for it to be approved by the Council of Ministers.