As Paul Ellis marks 22 years as CEO of Ecology Building Society, the longest standing CEO in the UK building society sector, we look at the building blocks behind his success.
EF Schumacher’s book, Small is Beautiful, is a manifesto to inject humanity into economics, over the dehumanising profit-led system of giant corporations. This, Schumacher felt, would enable environmental, and human, sustainability.
The writer Madeleine Bunting lamented: “Small is Beautiful is the cry of the romantic idealist, and there seem to be none left.”
She clearly hadn’t met Paul Ellis. Paul is the longest standing CEO in any UK building society, notching up 22 years at the helm of the Ecology Building Society. What’s more remarkable is he has helped to build it from the founders’ initial investment of £5,000 thirty-five years ago, to a balance sheet of £180 million. All while not only dreaming Schumacher’s ideals, but living them.
“Organisations like the Ecology Building Society and other initiatives are really building the blocks, or pointing the way to a new economy,” Paul said. “It’s about practical stuff. That’s what I tend to like actually, some of my personal time is spent doing woodlands conservation. I’d rather do that then hand out leaflets if truth be told; rather than argue for something, it’s about doing it.”
Ecology is literally building a greener society, providing mortgages for properties that support sustainable communities and respect the environment.
It all stems back to his childhood. A fan of the scouts, ‘because it’s all about the outdoors, and that’s where I’m happiest’, the theme of communities and nature runs through Paul’s DNA.
Paul’s philosophical and political outlook is forged by his upbringing. Born in Hull, his father was in the Armed Forces and moved the Ellis family all over the world: Belgium, Malaysia and Germany. It was in Germany at secondary school that Paul’s passion for social justice was seeded.
“The school was a Monastery during the war,” Paul said, “it was taken over by German authorities in the Second World War. The monks had looked after disabled children and adults. Those people were eliminated as ‘useless resources’ as part of the Nazi’s plan to rebuild the German economy – next to the school is a memorial to them. So I went to a school which was a site of a crime against humanity. As I’ve grown older that’s become a more important fact to me.”
It shaped his views on Brexit.
“My German colleagues and colleagues in Europe generally speaking, have more awareness of the chaos and disaster that the Second World War brought, so you can understand their commitment to European Unity as a way of avoiding that. It’s a bit of a catastrophe that we don’t quite fully understand because we weren’t invaded as such; we suffered a lot of damage and lost a lot of people, but we ended up on the winning side, so we have a different experience, and we don’t quite fully appreciate the motivations around European unity.”
Growing up he developed an ‘internationalist outlook’.
“As far as I’m concerned we’re all human beings and citizens of the world. Political divisions are quite arbitrary and often nonsensical. The whole thing of trying to reassert our national identity by leaving the EU seems, to me, an incredibly false premise, based on fake history and a limited understanding of what our role in the world is. The idea that we can survive independently, or in competition the whole time with everybody else and somehow we will end up on top, seems quite a dangerous delusion.”
As a child, Paul saw the rainforests and river plantations of Malaysia and felt an affinity with the natural world.
“I gained an interest in nature from my mother. We used to rescue birds and plants and watch them grow. I very quickly gained a feeling we needed to protect our natural environment. I then allied that into an interest in social justice. The two link through to me quite clearly. Without social justice you can’t protect our natural environment, and we need to protect it for all our sakes, and future generations. Everything I do is driven by that.”
As a student Paul was a member of the Ecology Party, now the Green Party. “Saturday afternoons were spent on Save the Whale demos! I considered living in a communal house. That didn’t come off. I’m probably less keen on that now!”
In London, Paul studied European integration at the London School of Economics. He met Jean Lambert, a founder of the Ecology Building Society, and a member of the Ecology Party who is now a Green MEP.
“I would badger her on progress on the Ecology Building Society project. I got the idea straight away of people using their own personal capital to build the economy that they wanted, using their capital to effect transactions that made a change. I was a big supporter of the idea.”
Paul had toyed with the idea of working in the EU. He went into social work, but then decided he needed a more permanent career.
“What I hit on was IT. I found I had a flair for coding. I used that in the early days of the Society so in my spare time I would do the computer systems here. It gave me a way of learning how an organisation actually works, nuts and bolts.”
The hobby turned into a full-time job, 25 years ago, and in just three years he went to the top position of CEO.
“I was already a non-executive director as I’d taken over from Jean Lambert in the early days from 1984. After the IT I acquired marketing. So I suppose the mix of understanding the regulation, through being a non-executive director, and the IT and the marketing all came together. I got the opportunity and I’ve been here ever since.”
Balancing social and environmental impact with profits is a unique success story, down to unwaveringly sticking to the values of the Society’s founding members.
Ecology was the first building society in the UK to be awarded the Fair Tax Mark, an accreditation that celebrates the issue of responsible tax. It holds the Green accreditation mark under the Investors in the Environment scheme – the highest level of accreditation possible, and it was selected as an ethical ‘Best Buy’ for its mortgages and savings accounts by the Ethical Consumer magazine.
Its approach to the national housing crisis is ground-breaking, if not revolutionary. It recently pioneered mortgages for part of a transformed Victorian workhouse in Tower Hamlets; 23 new homes in the refurbishment were sold by the London Community Land Trust at prices less than half their market value. Ecology Building Society provided a number of mortgages linked to local earnings to make the homes permanently affordable. One new homeowner there said, “Ecology has helped to make our dream of owning a family home in London possible.”
Community-led housing is an area Paul is passionate to build.
“It’s about addressing imbalances in the housing market. We need a massive, as far as I’m concerned, national retrofit and renovation programme to get things up to scratch if we are to have any chance of meeting our climate change commitments. I think it’s a real live issue that’s brought into stark contrast in London where even people with relatively good incomes who are essential to the functioning of the economy and society in London are forced out because they just can’t get a foothold.”
Paul supports small-scale and community developments as he says the UK market is controlled by a handful of large developers, which means affordability is a permanent problem. “It feeds a lot of distortion in our economy,” he says.
Alongside Ecology’s work, Paul believes others need to pick up the baton, as well as lobbying for change politically in the financial system through public policy.
He sees Ecology’s role as being ‘disrupters’, “because it doesn’t have to be like this and we can bring new ideas forward more quickly and we need to.”
“The mainstream banking sector has failed on a number of occasions. We can point to the fact that we have very low arrears, we have almost non-existent levels of losses over 35 years. We’ve proved the sustainability of our model that pursues values; we don’t pursue growth. We have a paradox. By pursuing values we have grown, and been profitable and built our capital.”
Paul is positive about the future, citing their success and movements across Europe the Society is involved with that go beyond banks and build a social economy, which works for people, by people.
He hopes the dislocation the crisis in the finance and banking system caused, and the government’s current ‘retreat from sensible environmental policies’ is ‘hopefully a blip, albeit incredibly significant blips’.
Ten years ago, Paul bought his own woodlands in Calderdale near his home in Leeds. It’s a rather fitting metaphor for what he’s grown with Ecology.
“I do see the woodlands as a place to get level again and just reflect. I like that idea of physical work to keep you honest, and I get a sense of wellbeing simply from being in woods. I’ve noticed that since I was young I had that ability to reconnect with nature and get away from the franticness of our society. We have a tendency to really focus on small minutiae, so if you watch the news here we’ve got our own obsessions, then you got to another country and they’ve got their own obsessions, and all the time the wheels of the universe are turning without much regard to what we’re doing.”
The woodlands had been quite badly deforested by industry so there was a programme from the Forestry Commission to replant.
“A lot of it was done by local volunteers, some of whom are members of the Ecology Building Society, so it actually all comes neatly together,” he said.
Ecology thrives, Paul said, because, it respects the values, ambitions and dreams of its founders. “I think for any organisation it’s actually really important to remember why you exist. I know many building society colleagues feel very much the same. They were organisations founded in their local community with very specific social goals, and the more foresighted of those realised there’s an awful lot of capital to be derived and thrown away at your peril if you don’t recognise that.”
It all comes full circle to his upbringing, his parents and their values.
“You can over romanticise these things but fundamentally I believe in service, and that the greatest degree of happiness comes from helping others and contributing to society.”