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um a very warm welcome to everybody um good afternoon today's event we're lucky to have two speakers actually when we advertised it we only had one confirmer we've actually got two and our broad theme is about sustainable finance but particularly because it's the environment and sustainability institute we're focusing on the ways in which finance connects with the sustainability agenda around the environment in particular and for those of you who don't know and perhaps are new to the esi the environment sustainability institute we have research going on in three areas which we call the three e's ecosystems energy and engagement and all of those things actually depend on questions of finance and it's interesting in the last year or so it seems as though biodiversity and environmental sustainability natural capital is really rising up the agenda in the city and the financial world and the business institutions so it's very timely for us to have this event today to just start having a conversation about some of those more financial business oriented issues as they connect to the questions that are central to the esi so today we've got chengdi zhang who's going to say a few words about the university of exeter's news center for sustainable business based on the stretton campus but very dynamic and keen to collaborate so it's great to have cheney with us today to tell us what they're doing he'll just make a brief overview but i hope once you've met him you'll be able to follow up with him and we'll carry on collaborating and then our main event today is to hear from the ceo of southwest mutual tony greenham so hi hi tony very pleased to have you with us and how he will tell you that southwest mutual are trying to set up a new regional bank and for areas like the south west of england where we and then cornwall in particular perhaps we have a very particular economy that always tends to get overlooked because it's sme driven we're a rural dispersed population we're a long way away from the centers of business and decision making often and we're just the kind of area that needs a regional bank that's about banking for local people that's much more embedded and engaged in what's going on in our region so it's a fantastic project he's going to tell you about today and i hope again there'll be lots of chances for us to collaborate going forward so tony's talk will be about half an hour and then we'll have lots of time for questions and comments and discussions so save your comments and questions for after his talk so without further ado i'll pass over to cheney who'll tell you about the new center for sustainable business great uh thanks jane for the introduction my pleasure to be here to join the community to talk to colleagues in congo and with um tony as well let me just try to share my screen here okay great well as jane said we are establishing a new center at um uh business school in the university of exeter so we our focus is on the topic of sustainable finance i'm the director of the uh the center but what is sustainable finance um in how we um we think of it as an integration of esg factors so these are environmental social and governance factors into finance into financial decision making but with the aim to create value for all for the society so here's the key difference with i guess traditional finance where we just think about shareholder value maximization but here uh what we try to i guess encourage our students and the fellow researchers in a academic community to to think is about firm's objective is probably going beyond just shareholder value or share prices maximization okay and as jane also mentioned this is a growing industry so when i started the research doing research on this area probably 15 20 years ago was a very niche area in finance a small number of investors in europe and the us are doing some sustainable or socially responsible investing basically integrating some of these non-financial objectives into uh their decisions in finance but nowadays is a huge market um based on some industry estimates there are 30 trillion dollar out there that are managed based on some uh esg or sustainable responsible factors in the investment decisions okay so this is about 20 of um all the assets around the world under professional management okay so what are we going to do as a exeter sustainable finance center we try to do rigorous research provide large scale rigorous evidence on on the field of sustainable finance well but it's not only research we also try to bring together students and other faculty alumni and other industry partners to the debate and share ideas on them on innovation around sustainable finance in terms of research we look at currently three main areas the first one is esg investing environmental social governance investing and second is stakeholder governance looking at the impact of other stakeholders of the firm and then finally on climate finance and climate risk so there are three key questions we are currently working on um at the center uh hopefully hopefully address these issues and then inform our stakeholders about these issues right so how sustainability affects the risk and returns for for investors that's probably the first order issue in finance investors want to understand how it affects their profile the risk profile of of their investment by taking these factors in into account and then the second question is looking at which factors under which conditions are most important for for business right and then the third question is we look at the overall impact so how finance uh contribute to this global debate uh problems such as climate change and inequality right especially look at the financing and the investment to these um uh solutions right to um to uh helping i guess to uh give a solution to these problems right so we offer both undergraduate and postgraduate models unsustainable and the response responsible for finance we think it's really an important thing to do because if you look at like business schools in um top universities um still very much uh focused on this idea of um well um the social responsibility of a business is to maximize profits right so as if shareholder is the main it's only uh i guess um stakeholder main stakeholder behind business i'm sure tony will talk a lot about that and then about the center we currently have 14 faculty including five professors two associate professors and three lectures and four senior lectures if you want to know more about center please get in touch with me and we have a website here it is that's about it yeah i guess if you have questions i'm happy to answer at the end of the session great yes over to you yeah over to tony uh who's going to share his slides too i think yes well thanks very much uh jane and chandi and thanks for having me here uh so um uh i'll i'll pop the slides up um and just briefly give you a little bit of background this is a slightly unusual talk for me because most of the time i'm obviously sort of giving more of a pitch for the bank to investors and other stakeholders but um i also have a background in political research and and have and lecture in money and banking as well so given that this is a university audience um the first half i've thrown in a bit of conceptual stuff and theoretical stuff which i thought you might find interesting leading to why we think we need to set up a regional mutual bank so i'll talk about that at the end so um oh and just to declare an interest i suppose in cheney's work particularly i also do sit on the advisory committee of a leading esg fund management firm in the city called lion trust so very much a believer in esg strategies because their funds guess what they outperform mainstream indices over the long term so it definitely works we want to apply that to banking so what i'm looking to cover today these four things just something about banking on a just transition and what's what's the challenge for banking secondly and this is more of the conceptual bit why banking is particularly important in the financial system and that's around its role in credit creation or the power to create money then why regional stakeholder banks and i'll explain what we mean by that are important and then finally i'll introduce a little bit more about southwest mutual so the challenge well very recently the uk climate change committee published a report on the role of finance and achieving our goal to get to net zero and i think it's really interesting to frame this conversation because they suggest the additional investment every year they think will be needed and it will have to ramp up from 10 billion a year in the uk to nearly 50 billion a year investment a significant amount a significant amount of that is into retrofitting residential buildings and another big chunk is to do with electrifying energy systems so a massive amount of investment needed in greening the economy you know the question then arises is our current financial and banking system fit for this purpose um now uh frankly i don't think it is i mean it's certainly getting better but we think we've got a long way to go so that's the scale of the challenge this chart shows us what uk banks actually allocate lending to and it runs from 1997 up until 2019 and what i'd like to draw your attention to is is is the bottom two slices are for personal consumption and non-financial business what we might call the real economy and you'll see that over that period that hasn't really gone anywhere the huge growth in bank lending has been lending to other financial institutions and commercial real estate which has grown although it's relatively small relative to the others it's grown amongst the fastest and then residential mortgages so there's a a persistent problem that the the bank the banking system isn't lending to the things we need it to be lending to in sufficient quantities even to sort of fuel productive investment let alone towards greening the economy just to make that point i've listed their the scale of bank finance going from the largest banks in the uk into fossil fuels over a three year period which are enormous sums into what should be a sunset industry so that's how far off they are and here's an interesting little thought experiment so um the amount of smes uh deposits in the region that we serve which is the great southwest region and i'll go on to explain a bit more about what that is but small and medium-sized businesses actually deposit six billion odd into the main stream banking system but they only get 3.3 billion of loans out so the huge irony is that south west smaller businesses are putting money into a banking system that is using it for financial speculation and fossil fuel investment and we don't think that's what they would like to happen um on that sme point i've skipped a slide sorry so this this here's another part of the challenge now when we talk about transition adjust transition um it's not just that we need to get to a net zero carbon economy it's just that the way we get there has to be fair and seem to be fair i mean this is a growing consensus and hence this uh this phrase of banking on a just transition social justice is important so we need to also tackle issues of financial exclusion and in the region there are still substantial numbers of people who don't just lack access to a bank account but they may be dependent on cash and a lot of people who are not actually users of the internet so it's all very well saying well banking's gone digital use an app for an awful lot of people that is just not suitable um a little bit more on the sme finance problem i mean it's been a persistent trend that large high street banks and global banks have sort of withdrawn increasingly from lending to smaller businesses and there are a number of i won't go into them but there are a number of particular sort of gaps and niches and sorts of niches one of them interestingly is um a lot of businesses have lost so much trust in the banking system that they'd rather sacrifice growth and productivity than invest in their business if investing in their business means they have to get a bank loan so these are problems which we again we want to address and the sort of final piece here i suppose is that the uk is there's more and more awareness now there's political imperative of leveling up i was around during a previous government um that talked about rebalancing the economy so you know lots of talk not much action over the years but definitely people recognize that it's not a good thing that the uk has such an unequal distribution of wealth within it and of course cornwall is right down near the bottom of that chart but so so are the other counties in the southwest now why is banking important in particular in the financial system and i want to make a case that um it plays a special role and therefore deserves special scrutiny and that's all about the idea of um well that's the idea i mean it's it's now become an accepted sort of description of what banks do which is that they create money now for those who haven't sort of come across this concept that might seem outlandish but let me try and unpack it a bit the starting point is actually to ask the question what is money to which most of us grow up with an idea of money as an object a commodity gold and you know you see this in in films in popular fiction so that picture there is from harry potter you might recognize the gringotts bank uh full of treasure but also treasure island you know that a lot of literature equates uh money with with gold and commodities and objects now gold of course has been used as money but that's not really the essence of what money is money i will argue is actually a social relationship it's not a thing it's a relationship now what do i mean by that well we have to start by unpacking where this erroneous idea of money came from uh so here i'm going to be very brave and say that adam smith the founding father of economics was wrong about something but luckily i'm i'm not the only person to have said this so uh the wealth of nations the sort of founding text of economics talks about barter when um smith talks about the butcher the baker and the brewer so he imagines that while how the specialization of each and specializing in their own thing is a good thing that creates wealth well that's true nothing wrong with that insight but where he gets it wrong is imagining how they then trade with each other to swap their goods and i've given the quote here i won't read it all out but the crucial bit is that he sort of imagines that uh to get over this people must have just settled upon using a commodity such as gold as a means of exchange to allow them to rather than having to swap you know a piece of meat for for a barrel of beer the problem with this story is as anthropologists and historians and various other people have pointed out is that it's just not true i'm afraid i'm an economist so therefore i deserve the right to take up economics but you know i'm afraid economists can be rather guilty of making stuff up if they don't know the answer so this and these are all quotes from economics textbooks which i think are quite amusing because you'll see each of them uses the word imagine so in trying to explain the origins of money as coming out of the inconvenience of having to barter goods directly they all use these quotes about well imagine how hard that would have been you know imagine you have roosters but you want roses i don't know that's a terrible thing to happen but in actual fact the idea that there was ever a place where you would attempt to go and swap roosters for roses is just not true there's no evidence that any society fundamentally organized most of its economic activity through barter barter may have taken place of course but that wasn't really the true origins and nature of money and david graber expresses this best uh in his book on debt which i'll cite later which is quite simply that nowhere has been able to locate a place where the ordinary mode of economic transaction was i'll give you 20 chickens for that cow now i'll come to why all this matters but first then so what is you know what is money then if money isn't a commodity and gold tha was arrived as a way of getting around this inconvenience of having to barter what is it well here are some uh explanations um not ferguson who's a historian sums up very nicely money is not metal it is trust inscribed and just to make the point i've got a a little excerpt there from a bank of england 10 pound note and in very small print it says i promise to pay the bearer on demand the sum of ten pounds and of course if you were to arrive at the bank of england with that ten pound note and say oh it says on here that if i i'm the bearer of this note uh i demand the sum of ten pounds they will just give you another bank note i mean there is no the point is that the money is actually the promise to pay um and the bank of england itself says that now so i've quoted their own explanation um that modern banknotes are have a value which clearly is way in excess of their paper value and they have a value because everybody trusts that they can be accepted in exchange for goods and services so really you know it turns out that money is really just an iou in the case of the bank of england that iou is backed by the full um coercive force of the state actually because you have to pay your taxes using uh sterling you can't pay them in roosters or cows so it really enforces the acceptability of the money by ensuring you have to pay your taxes in it but uh what's interesting is that you know an iou can of course be written by ordinary people and uh it amused me when i saw in a collection box at a museum somebody had sort of instead of putting some actual banknotes in and put a little note saying i owe you 50 pounds and then decided that it was too generous and crossed out 50 pounds and written five pounds but i presume that they genuinely meant to come back later and put a five pound note in so the reason for me wanting to say all of this and again i'm sort of for those unfamiliar with economics or monetary economics i'm delving into some perhaps quite um tricky concepts here but um in essence i'm saying that money is something which has a public in a strong public interest it's not a private matter you know money is uh acceptable because it is something that is reinforced by the states it's a social construct it's a political construct and therefore i would argue that money is really a mutual concept it's it's a in order to enable mutual exchange money is a mutually acceptable medium of exchange so i'm not going to try to go through the full there is a whole lecture to be done on how banks create money but i will just for those if this sounds unconvincing um this is again a quote directly from the bank of england that simply makes the point that given that um bank deposits are themselves merely a promise to pay from the bank they are an iou that these ius can be created by the bank whenever they make a loan and that is exactly what they do so 97 of the money supply in the uk consists not of bank notes created by the bank of england which is only three percent but of ious or bank deposits created by commercial banks so this is an enormous power that is effectively privatized what this means is that the quantity of money that's created in the uk and more importantly what it is allocated for in the form of loans is up to the decisions made by private for-profit banking institutions so if you want to sort of dig deeper into any of that i can um with uh apologies for the terrible self-promotion on this slide but um yeah university professors would never normally do that i know so you could read where does money come from which i co-authored david graber is an amazing text money money modern monetary theory go to stephanie kelton and there is a tedx talk that i did on this subject as well if you fancy that now so if i'm saying that first of all we got this huge challenge in the banking system to finance the just transition to net zero and i'm arguing that uh the way that banks create money and what they created for isn't up to scratch right now what can we do about it well you could think of there being three broad strategies for changing the banking system uh you know culture change um there's a little photo from the southwest mutual team away there there um or better regulation uh which i'm not going to talk about but obviously that's a fair strategy and there are changes in regulation that are making banks pay more attention to their climate risks for example which is all good but i want to talk about the final bit which is well you could also make sure that you have the right kind of banking institutions um and actually cheney is referred to this earlier on in terms of the dominant form of of institution having been the shareholder owned for-profit company and actually would a more diverse landscape of institutions service better well i'm going to argue that it would in banking for sure so here's the case for what we call regional stakeholder banks now to set this up i'm going to play you two adverts about a minute each the first one is from barclays bank from 2000. i used to work for barclays back in the day and i promise you it's not a spoof it's a real advert and the second one i'm going to play is from a new zealand bank so sit back and enjoy anthony hopkins in barclays bank advert big what is this about you know seeing a big picture having a big idea pitching the big deal nobody wants against anybody who wants to do that be a little dear clincher small shark when you go and get a burger you want a big mac goes in front you ride a big dipper you turn on tv and you see big bird or you're afraid of the big bad wolf when i was growing up i wanted to be the big man i never wanted to be the little man you go to america you want to go to the big apple off the little apple i get up in the morning i want a big breakfast or my girlfriend say good morning big boy to which i reply my big house i tony that was quite hard to hear on my computers and maybe if you increase the sound at your end don't if anyone else found that difficult ah sorry about that well just about catch it tony so it wasn't a waste but it was difficult i get the message it was all big yeah maybe uh okay i'll apologize for that well you can send the link around the um it's a shame because uh you would have missed the full cringeworthiness of the uh of the script uh and i don't forgot any sociologists in the room but you'll have fun unpacking that the patriarchy and various other embedded memes in that but um let me i'm not i can't seem i don't think i can increase well maybe i can try um let's let's move on to the see if we can have better luck with the new zealand bank which i want to contrast with the um the brash uh you know uh bigness of that of that advert what is this about the oh hold on you i'll just check if that's audible not good yeah a bit better tony yeah okay another record the math [Music] profits with its customers so obviously there's a sort of bit of uh silliness in in those adverts but uh it's sort of subverting the fact that um the idea that anybody would celebrate a bank increasing its profits of course well he would if it was your bank and you're you're it was a cooperative and you own the profits um that barclays advert um actually was controversial at the time because at the time they were stalling the virtues of being big the chief executive had just given himself a massive pay rise and they'd slashed their branch network serving rural areas so anyway um i'm going to argue that actually in banking it's not that we don't need big banks okay actually the real argument here is about diversity of banks and we certainly do need to have a place for in our banking system smaller banks and banks that are mutual um and those are examples of what we call regional stakeholder banks so what regional stakeholder banks are are ones which are mission-led so they are not solely profit maximizing firms they have a social mission embedded in their corporate structure like cooperatives or in law or in some other way they're regionals so they serve relatively small areas geographical areas which they then become intimately knowledgeable about which enables them to do better lending and they often cooperate in networks to gain economies of scale now why does that matter well it matters because there is substantial evidence of these banks that they do better on financial inclusion which is a problem i mentioned earlier on they allocate a higher proportion of deposits to sme lending again which i mentioned previously they overall allocate more of their credit to the real economy so they do not engage in lending to other financial sector firms um and sort of non-productive lending which again was one of the problems i highlighted earlier and there's lots of evidence that these sorts of banks and tend to reduce the inequalities between regions within countries so the fifth one is boosting resilience so i've mentioned the previous four but i just want to say a word about this idea of economic resilience um so here's evidence from germany post the financial crisis of how three different types of banks performed the bottom line are deutsche bank and the other big global banks which withdrew credit from small businesses and real economy but in germany the sparkassen the local savings banks public savings banks and the local cooperative banks both steadily increased credits to uh domestic companies and smes which was one of the important factors why the german recession was not as bad as it was in the uk it wasn't just in germany because switzerland has a very similar banking system in having three different types of bank same story credit suisse who i used to also used to work for back in the day and ubs withdrew credit from the economy but the others um made sure that they carried on lending uh japan also similar similar thing here's the picture in the uk there was a massive withdrawal of credit from the real economy in the uk but we didn't have the other parts of our banking system able to step into the gap and this is because the uk is very unusual in being so concentrated so this shows the proportion of backs bank assets between different categories commercial banks cooperative banks public savings banks so although it looks as though the uk is in a bunch of similar countries there actually were different even from canada and japan and the us because in our case that sector of non-commercial banks or cooperative banks are building societies nothing wrong with building societies but they only do residential mortgage lending or at least 75 needs to be residential mortgage lending so they don't play that strong economic role in sme lending in regional economies whereas in all the other countries they do so we miss out and it's unusual and particularly we miss out on having regional level or local banks which are commonplace and significant in most other uh countries of what of any size or if you're very small country there's not much need to have regional local banks but in larger economies there is just around that point home is comparing usa germany and france and the number and the general assets that are within regional banks whether those are commercial regional banks or stakeholder banks and although there is a community finance sector in the uk of credit unions and community development finance institutions when you add them up they total only about four billion of assets whereas in these other economies the regional banking sector is a thousand times or more bigger or it's a different order of magnitude well three different orders of magnitude different um here's some examples torbay is twinned with um hamlet in germany of pied piper fame they are both roughly the same type same size but unlike torbay there's a local savings bank that serves purely the region of hammond vasoberger and is one of the main mainstays of sme lending and financial inclusion it has two billion of assets just that one bank serving an area the size of torbay here's another example bournemouth similar size to lucerne lucerne has its own cantonal bank which is a public savings bank assets of 25 billion and a market share of business lending over 50 percent does longer-term lending than the commercial banks do and has long-term relationship banking with its business clients another example from japan okinawa prefecture has its own cooperative bank that's about the same size as devon you know so i think you're getting the picture here that you know when you look at the southwest and the uk it's actually quite unusual we don't have our own banks final example plymouth there's quite a few plymouths for obvious reasons in the us here's one of them northeastern savings bank and uh you know it's assets of over a billion dollars 18 branches and just look how happy all those people are on the adverts which sort of proves the point i think and here's here's the here's that branch network superimposed roughly over the scale of the southwest so why is it not that you know why don't we have this kind of bank we should have this kind of bank and we're not the only people that say so you know there's there's a number of different think tanks policy institutions and now uh indeed politicians who agree um and and cooperative banks i just want to say a word here most of the research that goes on into the benefits of regional stakeholder banks happens in germany and other countries not in the uk probably for obvious reasons because there's nothing to study in the uk but here's a recent one from the university of hohenheim that says uh particularly that small banks significantly help the economic growth prospects of underlying regions and especially cooperative banks boost economic growth kevin holland rake and uh john glenn who is he is the minister for banking have both also said that they find the proposition of regional mutual banks compelling um so what does it look like so this is the bank we're seeking to establish southwest mutual covering that area cornwall devon somerset and dorset otherwise known as the great south west the key features are it is a cooperative we do have financial inclusion as part of our mission in terms of businesses it's not just smaller businesses but also the growing social enterprise sector community enterprises employer and enterprises things with non-standard corporate forms the large banks have generally not very been very good at understanding or serving so we think that's an important niche that we can do well we're multi-channel we will have state-of-the-art digital as a new entrant we can take advantages advantage of the latest fintech but we're also going to have face-to-face customer service because that remains extremely important for um well for discussing products for dealing with complaints um for building trust actually and as a way of delivering customer service high social environmental standards so i'll talk more about this but we are very keen to be an exemplar in how we can embed esg factors which cheney talked about right at the beginning in our own banking risk frameworks because we don't perceive this as being done very well there are banks that are better than others and triodos i'll call out as a good example in this case but they generally will have a sort of wrapper over their core banking risk assessment of sort of esg factors we want to have an integrated approach where the way that we make a lending decision absolutely takes the environmental and social factors into account through that process and in terms of the scale we're aiming to build a bank of about a half a billion pounds balance sheet so here's the vision uh community is flourishing in harmony with nature our purpose is actually to promote promote inclusive and sustainable prosperity in the southwest of england so note that our purpose is tied to the region and tied to those aims of inclusive and sustainable prosperity so our mission which gets down to things that are now measurable is to provide banking services that are honest effective accessible and locally rooted i want to talk about the one part of our model which is rebuilding trust in banking so we think that being a mutual i don't think actually survey evidence including our own tells us that people do trust mutuals more than um plcs more than shareholder driven ompanies particularly in finance and one of the reasons that they distrust banks is they see senior executives they think overpaid at the same time that they're cutting back branch staff or paying them very poorly so we will not only beat the real living wage in our lowest paid employees but we're going to have a maximum pay ratio from top to bottom and the business model is is well i've talked about it before actually you know when we're going to apply you know that your savings are going to be applied to things investing back in the region that aren't about financial trading speculations about the real economy and it's about sustainable uh projects that are financed we will be doing the normal range of products that's just there for completeness you know current accounts are pretty crucial we want to introduce those alongside savings and loans both to businesses and households how do we do it well i've mentioned this briefly but it's the combination of digital channels human contact either remotely or face to face and making the best use of local outlets like the post office and paypoint for people that still need um convenient access to cash both to deposit and withdraw so the economic social and environmental factors we've developed an impact framework that has i haven't put all the indicators here but which is developing a range of indicators to track our performance across these various goals which is say integrated within our business goals so i'll pick out a couple here which is that you know there are again there are studies and evidence that suggests that the additional sme lending we think we'll be able to fulfill safely through our superior closeness and knowledge of the region will lead to increased job creation and preservation on the social side um if we can do better on financial inclusion uh that has multiple benefits through from saving people money through higher fees that they're having to pay but also well-being effects impacts on education homelessness all sorts of problems with problem debt and on the environmental side well that challenge that we saw earlier on about the huge amount of finance that needs to be available for the transition to a net zero carbon economy in truth as true in the southwest as anywhere else so we're looking not just to back green industries if you like so renewable energy and the like but it's really important to us to be able to finance the change so whether that's businesses that are looking for finance in order to make their own business model more sustainable or if it's home loans for retrofit the huge amount of retrofitting that's going to need to happen in the southwest these are sort of priority products for us that fit into the need for this transition and so i'll wrap up there with just a sort of summary of why we think we're different because we'll be the only bank that combines these three things we're purpose-led so yes we will be profitable it's a business but it's one which is led by its purpose first and the profits are a means to the end of achieving the purpose secondly place will be the only bank that's dedicated to this region and is particularly familiar with it's the industries and the people within this region which gives us a superior risk performance as well there's a business ethic behind that as well as just wanting to serve a purpose and then finally participation being a customer-owned bank that's directly accountable through its ownership structure so thanks very much for listening uh and look forward to some questions great thanks tony that was a brilliant talk and i'm sure there'll be loads of questions um i am often struck walking around cornish towns that you see old buildings beautiful buildings actually with cornish bank across the top and they've now got other things going on in them and we did used to have a course a really strong regional banking sector and when you're talking it's very exciting to imagine what that would be like especially for the regeneration of our own region going forward so very inspiring if anyone wants to ask a question please either just stick put the logo on from the bottom there's a reactions logo at the bottom and you can find some hands there to put on and i can call you otherwise just put your camera on and ask a question or you can raise it in the chat and i can read it out and john taylor's actually already put one in there so go john if you want to ask your question oh hi there tony yeah fantastic presentation and i'm out of region i work i live in east anglia but i work for the um regional energy hubs so i was going to ask are you connected with the south west energy hub and are you supported by the leps in this initiative um answer the first question is not connected with them um it does ring a bell i'm sure i must have seen uh information about them but um if you can make a connection please please do um i i forgot to say right at the beginning actually um so i'll set it now please do follow us on twitter both at southwestmutual at tony greenham and linkedin where you can find the company under southwest mutual um so you can always contact us via those channels or my email address is just tony.greenham at southwestmutual.com so do get in touch on the laps uh yes the the biggest left within the region is heart of southwest that covers all of somerset and devon um and they are um backing us uh initially with with a small investment um we've also talked a number of times to cornwall lep and um haven't spoken to dorset let but we are in conversations with both the constituent councils in dorset so local authority is a very important stakeholder for us as potential investors but also as partners because our mission aligns pretty closely with a lot of their own economic social environmental goals uh alex had his hands up um thanks jane hi tony um i'm alex i work at the university as well um along with my colleague who's on the call jack oliver um but we're just picking up on your points about esg reporting um jack's come from a finance background and has been working with colleagues around climate risk management climate finance activity uh and but we're just as a university embarking upon um the final stage of a large nerc application which is around nature and people and we have a strand uh in that proposed bid and project around kind of biodiversity finance so this is kind of really starting what i hope is the crest of a new wave but maybe climate finance um has been going on for 20 odd years or so um we've got the new task force for nature-based disclosure that's just kicking off this year so this kind of concept of biodiversity finance or using finance to deliver green or biodiversity outcomes is is building up a momentum and we're really looking for this new nerd call um new you know project that we're developing in partnership with the national trust to have a strand around biodiversity finance so i was just flagging that as an opportunity and it would be kind of great that if if you and um southwestern mutual might be interested in having a further conversation around that and how you can shape things between now and the beginning of june we're going to be developing the final application and it's over 10 million pound in value so um and there's a real opportunity to make it deliver what you want and then more personally outside of work i'm a director of a community benefit society in south east cornwall and we've raised loans and finance um to do to buy buildings and housing and work space um it's called the peninsula trust i'll put a link in the chat but we've worked with the cooperative society and other other kind of banking sectors and tried us in the past but it would be great to kind of transition our banking maybe to a bank that's in the region as well right well on the first thing and um jack hello jack jack and i did meet a while ago actually um so it'd be good to pick up with you both that you've got something in that something cooking except there was there wasn't a particular project at the time when jack and i spoke so that sounds really interesting um we're one of the sectors i'm particularly interested in myself but as an institution given where we are is agriculture and and the capacity for agroecology is a farming method to achieve multiple wins one of them being biodiversity but we've identified that there's a gap in finance for you know anything which isn't farming as normal farming a normal being spraying chemicals and petrochemicals and everything basically if i don't hope there's no farmers on the cool thing that's a bit rude but you know essentially there is there is a lack of finance for um agroecological approaches so that sounds like a really interesting project um [Music] the farming and the food element is also kind of dear to my interests you know and and if one conflates you know both biodiversity loss in the region and climate change challenges um against also our changing common agricultural policy or transition from brexit we know that 60 of our farmers in the region won't be solving solvent without their basic farm payment so they've got to be doing something different or they're going to be going bust so that i think as much as that being a sad and a worrying um thing can be also a great opportunity but also might change the way in which our natural environment looks in the southwest quite drastically as well absolutely i mean i think i think that sector is one of the big sectors along with you know home houses and transport and so on that needs to change significantly but and and that can feel quite terrifying but i think you can also as you've just done you can frame that as a huge opportunity and i think in the southwest the opportunity to transition towards um farming food and farming sector that actually solves a lot of these problems as well as producing food let's not forget food fiber and fuel then uh you know we could end up in a much with a much stronger better and cleaner economy it's not necessarily that these threats are going to drag us down we have to flip that round i think and that's but if you don't have the right finance for that then that's a blockage yeah great um i can't see any hands up or in the chat but keep thinking and while you do i'm going to ask another question which is i'm wondering about the launch tony because you're saying 22 23 you're aiming to launch what do you need to have in place to be able to launch and what's the role of institutions like us and the big universities in terms of investing in the bank and how does all that happen yeah that's a good question so um the um there are a number of other banks by the way emerging it's not just southwest mutual so we have colleagues in bristol starting a bank called avon mutual and we're we're both the furthest ahead but there's also others in manchester north west and north east my colleague in avon mutual has quite a funny line which says it's reassuringly difficult to start a bank in the uk it's a long and arduous process hence the launch is is still some time out so um but really the biggest the biggest challenge we face is raising the capital so um obviously the bank bank funding has two two elements to it there's the there's the savings or the all the deposits um and you know we're pretty confident that we can attract those because we think we'll have a compelling proposition both for institutions in the region but also particularly individuals um and perhaps as alex has just demonstrated but uh and um but the other bit the essential bit for launching the bank is our own capital so we need investors in our shares we will have shares they're just non-voting because we're cooperative and then they will pay dividends and we need at least 20 million and that that figure needs to be determined in discussion with regulators um but it's probably nearer 25 million to launch the bank and we'll need further capital afterwards so we are in discussions with institutional investors around that um [Music] and i think that the best the best investors for that are local anchor institutions you know which universities are one um now i i i won't you know i don't know whether that will feel um you know ultraviolets for university to invest in a regional bank but but maybe it wouldn't but certainly that's one way um but i mean the other role of the university i think is conversations um such as hopefully you want to pick up with alex and jack about how we can leverage your knowledge in a way that that um you know can can make us more impactful uh towards delivering sustainable economy so you know look forward to talking about that it must be extremely difficult to launch a new bank i can imagine there's a few things harder so well done for that the the funny thing about that sum of money is that it's both a big sum of money and actually a really small sum of money by which i mean 20 million pounds will buy you about a mile and a half of your carriageway no no what do you think you'd what do you think you're better off spending 20 million quid on because by the way the dual character women pay you dividends anyone else got john again see stefano has a hand up as well yeah let other people go first sorry i missed your hand oh that's that's totally fine uh it's a quite um quick question i was wondering you know uh the the video that you that you shared uh was was playing with the idea of big and small i suppose uh with i mean it was a bit disturbing for a few other things but um if i may anyway um so i'm thinking aren't you also trapped in that big small obsession as well and what i mean by that is that now that you are trying to uh you know revitalize this this regional place-based banking shouldn't you also maybe experiment a different community engagement it seems to me that it's just a matter of dimension but you are mimicking the same relations and trust building mechanism of a big bank um shouldn't you be trying to be a bit more socially innovative if i may or or think differently having having a purely startup mentality perhaps being much more networked much more microcredit oriented you didn't mention micro credit uh that we have 30 years of a very good example of micro credits around the world why can't this happen in in the west west meaning west cultures west economies just just a curiosity it's not a criticism it's just really uh some thoughts that you stimulated through your your brilliant presentation yeah um well i i think that we are i would say that we are approaching or certainly seek to approach the way we engage with our own members and with communities quite differently from large banks um but but on the point about micro credit and and products you know this is quite an interesting point i think that micro credit is effectively i mean it's not really a term that's used so much i noticed in the uk in the way it has been in in india or in brazil and places right so but in effect those smaller loans that are unsecured um in hundreds of pounds or so on this this is what credit unions do do now we are going to be very different in scale to a credit union in the uk 100 times bigger but still a thousand times smaller than barclays and i think the point is that we need a variety of different scales within the economy so whereas we'll be able to do a span of lending that that does do some of the larger medium-sized businesses down to smaller loans for both individuals and and businesses it's quite a specialist thing to do short-term um high-cost credit loans you know sort of the two or three week loans for 100 pounds we won't be able to do that um and there are various reasons one commerciality but also regulation so we have to meet exactly the same regulatory standards as barclays bank all right that's a tough call and that's because we are seeking the gold standard which is a banking license now there are other forms of credit institution which are less heavily regulated that may be more suitable to do other things so i think diversity the big small thing when schumacher wrote his his book small is beautiful that wasn't the original title and if you're not familiar with that please all go and buy it and read it immediately um it doesn't grow old 1973 i think it was written um but he um actually was making the p int about appropriate scale so for some things we need big size for other things we need small size but um you know but but smaller beautiful was a better it was a better title it's more catchy so so in a way although i've borrowed that the reason for saying small is beautiful is as a counterweight to this cult of the big which you rightly say we're still the mentality we find it quite hard to get away from the idea that bigger is always better so it might not be as brash as that barclays advert in 2000 but that is still the mentality and actually for many many things smaller is better but the thing we need most of all is diversity and the right scale of institution to do certain jobs within the economy diversity is a very good note to end on today because of course it's a very ecological term an ecologist will tell you that the healthy ecosystem is a very diverse ecosystem and banking in many ways has become less diverse and less healthy and we need to get it back but once we lose institutions it is really hard to get them back and that's part of the lesson of banking as well and europe's kept its regional banking whereas we've lost it so i really hope we can work together on this agenda is critically important great you've linked up with alex and colleagues in iib but also if you're looking for people to buy shares in the bank at various points or invest maybe we can use the university networks to support that and likewise link you up to research so it's been a really great session hope it's generated lots of useful ideas and relationships um thank you all very much for coming especially tony and chandi um and um have a lovely afternoon so thanks all we need to end now i'm sorry to russ who's got his hand up there no ways that's okay sorry about that but we're one minute to to ending so apologies pop me an email uh afterwards or or tweet us i would it was just a very quick one because i was going to do a challenger bank about three years ago so i understand the challenges that you're facing and it was just to give you a bit of an insight of how we managed to secure some funding so i'll pop you an email tony right we'll definitely have a chat all right thanks all very much that's wonderful thank you okay thank you thanks tony