The last year (2019) has seen the narrative around climate change, now the climate crisis, shift dramatically. Between David Attenborough, Greta, Extinction Rebellion and numerous scientific reports, the discourse on climate has taken centre stage. Companies have been quick to fall into line, at least on paper, and consumers have become far more aware of the impact their own choices have on their carbon footprint.
When it comes to our personal finance, not all banks (or building societies) are created ethically equal, far from it. The big name high street banks are, unfortunately, consistently the worst performers in tables focusing on ethical or sustainable banking– think Barclays, Lloyds, HSBC, RBS and the supermarkets.
Building societies tend to perform much better as they are far more regulated and accountable in how they invest their (and by proxy, your) money. Plus, profits tend to be invested back into the business for the benefit of borrowers and savers, rather than shareholders.
Credit Unions are another good option. Run as cooperatives by their members, they offer those on low income, affordable credit.
Then there are the organisations who have an ethical mission at their heart. We’ve listed three of these below.
Mainly this comes down to how the organisation invests its money. Below are some examples industries or areas of concern to consumers:
In contrast, organisations with a ethical mission, will seek out investment in positive causes such as sustainable energy projects, charities or companies with a proven sustainability track record.
Below are three companies that consistently score highly on ethical credentials tables.
Please note that these organisations have been selected on the basis of their ethical performance and not on how competitive their products are relative to the rest of the market, customer services or other factors.
Consistently a best performer across the ethical tables, the formerly Dutch bank is now based in Bristol and savings are covered by the Financial Savings Compensation Scheme (FSCS). They ‘only finance companies that focus on people, the environment or culture.’ Transparency is a strong theme also, with the bank publishing a list of every company they have funded.
Good for: Current accounts, Cash ISAs, Savings accounts.
Also consider: Charity Bank – uses its savers’ money to lend to charities and social enterprises.
Pipping other building societies to top position, Ecology are ‘improving the environment by supporting and promoting ecological building practices and sustainable communities.’
Good for: Mortgages
Also consider: Leeds Building Society, many other building societies perform well
You know, the ones with the colourful card.
Newbies (relatively speaking) Monzo have been spearheading the app-based money revolution which has been challenging traditional models of banking. They also fair well on ethical comparison tables.
Good for: transparent app-based banking, a loud credit card!
This news article was posted on 1 February 2020.