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Ethical banking might not be something you have considered in the past, but with climate change and sustainability being a topic at the forefront lately, we often forget that where we store our money has broader consequences than merely maximizing our own savings.  Where we invest and spend our money is a powerful way of voting each day to reflect the kind of world we want to be a part of.

Ethical banks are defined by their investment and dedication into environmentally supportive industries and are generally measured across five criteria: environment, people, politics, animals and product sustainability.  Ethical banks use customer money to invest in sustainable sectors like green energy and in projects that benefit local communities, as well as focusing on transparency so we can see what our money is being used to fund.

Considerations

• How does it invest? Find out where banks invest our money.  You can use BankTrack who monitor financing and investment in unethical industries
• Is it paying a fair share of tax? Holding companies registered in tax havens are commonplace amongst the biggest banks
• Is it financing climate change? All big banks heavily invest in fossil fuels and fracking.  The Co-operative bank is the only high street bank that has directly prohibited support for fossil fuels
• Is it funding nuclear weapons or overseas military? Financial institutions hold shares worth billions in companies that sell weapons, military equipment and technology.

Ethical banks in the UK

Triodos comes out top of the pile when looking at ethical banks and are a certified B Corp.  It was established in 1980 with the goal to fund organisations that benefit the environment and communities. They refuse to invest money in coal and other fossil fuels, mining, arctic drilling, fracking and arms and military technology.  They only lend to businesses and organisations that promote positive change such as organic farms, wind farms, social housing, community projects and fair-trade enterprises.  They also publish the details of every investment they make, showing full transparency.

Charity Bank is wholly owned by charities and social purpose investors dedicated to supporting UK charities and social enterprises.  Since its launch in 2002 it has made over 1,000 loans to housing associations, schools, community hubs and other social purpose organisations.

Ecology Building Society is a member of the Global Alliance for Banking on Values, a network of banking lenders committed to advancing positive change in the banking sector.  They focus on mortgage loans to make homes more energy efficient and loan support to community-led affordable housing and renovation projects, developing some inspiring examples of low impact living.

Building societies tend to be more ethical than high street banks as they face stringent regulations that limit the amount of money they are able to invest in certain industries and their profits are invested back into the business for the benefit of savers and borrowers, rather than shareholders.  Both Nationwide and Cumberland building society rank fairly high as ethical providers by Ethical Consumer.

Making the switch

Of course, there are many things to consider when choosing the right bank for you, but if ethical considerations rank highly then switching banks could be one of the most impactful changes you make.  It has never been easier to switch bank accounts with government regulation designed to reduce monopoly in the sector, taking just seven working days.

Our experts are here and happy to help.  Call or visit one of our offices in Dalston, Dumfries, Penrith or Workington today.