Originally published in Society Matters magazine, winter 2017 edition
2017 marks Paul Ellis’ 25th year at the Ecology – and his 22nd as Chief Executive. Here we learn a little more about Paul’s experiences in the sector and Ecology’s story and focus.
How did you first get involved with Ecology?
I followed the genesis of an idea to create a new building society which would address sustainability issues through one of the eventual founders, Jean Lambert, who is now a Green MEP. We were both part of the growing environmental awareness of the late 1970s driven by ideas of low-impact lifestyles, and books such as Rachel Carson’s “Silent Spring”. The idea of using personal financial decisions to influence the economy for better social and environmental outcomes, as with wider ethical consumerism, resonated strongly with me. In the early days, I used my IT background to help the Society computerise.
Did you plan to stay with Ecology for decades, if not, what made you happy to remain?
My early involvement in Ecology was a side-interest, a form of activism, which evolved into consultancy and then full-time employment dealing with IT and Marketing, before I got the opportunity to become CEO. It certainly wasn’t a conscious decision to stay this long, but the idea of values-based financial institutions gained traction, so there was the sense of being part of an exciting new movement. I have to admit that it has become a labour of love.
What is your favourite aspect of being Ecology’s CEO?
I love meeting our members and customers. They are inspiring people who have a positive vision for society and want to work for good outcomes for all rather than the few. The variety of projects, and the innovative ideas they encompass makes every day an opportunity to learn: from housing permanently taken out of speculation, new low-carbon building techniques, woodland creation for biodiversity and organic horticulture, and more.
What is the highlight of your last 25 years at Ecology? What are you most proud of?
There have been many successes over the years: our eco-build West Yorkshire office being recognised as one of the ten most sustainable “bank” headquarters in Europe. Our role in driving the uptake of the Passivhaus low-energy concept in Europe as founding members of the Passivhaus Trust. Being told by a leading commentator that our lending was instrumental in kick-starting the demand for green building products in the UK. However, I’m particularly proud of our recent MFG Product Innovation award for our development of a mortgage solution for homes where the sale price is permanently pegged to local incomes, thus countering the negative effects of house price inflation in the overheated London housing market. This is an example of a building society creatively delivering a solution to meet a specific societal need, which I believe is what our movement is for.
Ecology has a focus on ‘greener’ homes – how far has this area come in the past 25 years and where do you see it in another 25 years?
In the early days, we were dealing with pioneers. We now see a wider pool of potential borrowers who are more informed about sustainable building. Unfortunately, recent Government policy changes have reversed the trend towards improving building standards – particularly when it comes to energy efficiency. This runs counter to the approach in other developed countries so I expect this to be a blip. In the short term, I remain concerned that Brexit may mean important policy gains on support for energy efficiency and a low-carbon economy will be lost.
What’s been your biggest challenge or opportunity at Ecology?
Since the financial crisis, it has felt that we have been subject to a wave of regulation of Tsunami-like proportions. We recognise it is the price of doing business, so we are investing in our people, systems and data capabilities so we can continue to meet the needs of our members while satisfying regulators’ demands.
I’m also excited by the opportunity presented by the rise of fintech, which is transforming financial services and creating new channels for organisations to engage with their customers. We are looking at ways that we can harness the power of technology to facilitate that contact and respond to a new generation of customer, while remaining accessible to all.
What do you feel we could learn from our European neighbours when it comes to housing, and has anything you’ve learned made it into Ecology’s policy or culture?
Since mortgage markets and legal structures differ widely between jurisdictions, I think we should always be careful about reading over to the UK context. That mistake was made pre-financial crisis with policy attempts at importing US energy efficiency mortgage concepts.
Nevertheless, there tends to be a more interventionist/enabling approach from many of our European neighbours, with good policy outcomes. In Germany, community-led housing plays a much bigger part in housing provision than is yet the case in the UK. Here, there is openness to the role of democratically organised baugruppe housing co-operatives leading to a greater role in tackling issues of affordability.
The Netherlands shows that regulatory recognition of the influence of energy-saving measures on mortgage risk can lead to them being included as an option in mainstream mortgage products: therefore maximum LTVs are mandated by law and are higher for energy-efficient properties.
Ecology has lent to housing co-operatives since inception, and encouraged the use of new low-embodied energy materials. We have been encouraged by cities like Almere to make a stronger push to encourage off-site construction and support adaptable housing – something our members have raised with us.
What do you think is the most important focus for financial services in the next five years?
I believe that financial services have a critical role in helping to tackle climate change. We are already seeing the European Parliament considering capital reliefs to incentivise sustainable finance. A concerted response is essential to the maintenance of a sustainable economy, environment and the democratic processes that underpin the good society. For a start, in the UK, we have hardly begun the task of retrofitting 26 million homes to help us meet our Paris targets and lenders will have an important part to play, to deliver this.
If you had one wish for the future of the housing industry, what would it be?
I’d like environmental issues to become more of a focus, including the wider sustainability of housing developments. Energy efficiency should be engineered into housing development so it becomes more of a manufacturing process – which means off-site – and that modern methods of construction become traditional methods of construction, and commonplace.
Finally, what do you think your legacy will be?
When it’s time for me to move on, I would hope that our commitment to the environment and fair finance is sufficiently engrained in our statutes, culture and processes that it is naturally carried on by the next generation of colleagues. By sticking to our core mission and purpose, they will be able to maintain Ecology’s continued resilient success.