How good is my bank?
Supporting local businesses and ethical brands is one of the many things individuals can do for a better future, but have you ever thought about the impact of choosing the right bank? Simply letting your money “hang around” in your bank account can have a huge impact on our environment. Banks use your money, whether held in an account, pension or other investments, to lend or invest in other businesses, which are often not environmentally conscious. Although not all banks subscribe to ethical goals, some do. Read on to find out which side your bank stands on.
Many of the largest private banks in the world have still chosen to invest in fossil fuels. Banks such as HSBC, Barclays, BNP Paribas and Deutsche Bank, to name a few, continue to help finance pipeline construction. What’s interesting with banks like HSBC or Barclays is that their website promotes sustainability and renewable energy, often giving customers the impression that their money is being invested in a safe and sustainable way. A closer look at their history shows that there is more behind the organization’s claims.
In 2012, HSBC was involved in a money laundering case scandal involving a Mexican drug cartel, simply because the bank was careless enough to ignore the obvious signs that something was wrong. In 2012, HSBC’s money laundering program was substandard and left only two compliance officers for approximately 600 customer accounts. In addition, HSBC is also responsible for transaction processing in Iran, Libya, Sudan and Burma, which is currently illegal. But they are not the only banks to engage in such activities. SCBFF, ING, Barclays or the Royal Bank of Scotland have all had to pay fines for facilitating similar transactions over the years.
However, all is not so bad. There is at least one positive element that I have taken from the information that I have found, namely that HSBC prohibits the financing of New fossil fuel expansions. According to HSBC, the Bank is working with its customers to achieve a transition to a low carbon economy. Barclays has even set a target of reducing emissions financed by energy, including coal, oil and gas, by 15% by 2025. While critics say there is little evidence so far Now that these statements are being acted upon, only time will tell the results of these ambitions.
The most sustainable banks
As customers, we cannot ignore the discomfort of this world. Sometimes it takes time to find the right choice, especially when the bank you have chosen prevents you from finding the truth. To help you make a faster decision on sustainable banking, there’s a simple tool you can use. The website bank.green can provide you with a report of your bank’s fossil fuel balance based on your location. Unfortunately, not all banks are listed on the website yet. HSBC and Barclays are listed and unsurprisingly they are both listed in red, meaning they are investing in fossil fuel expansion.
It’s not up to you as an individual to change what big business is doing or fight the climate crisis alone, although that can be an easy way to change your bank to an ethical one. There are a few banks across the UK, each of them supporting their own unique and special projects where you might find your own values represented. A rather refreshing first place to start when looking at ethical banks is their transparency about where your money is invested. Take a look below and choose your bank!
Triodos Bank: “banking can be a powerful tool for good”
Triodos Bank is a financial banking service for savers, investors and entrepreneurs with the aim of connecting these groups. Its mission is to make money work for positive social, environmental and cultural change! The bank only finances sustainable projects – from aid to disadvantaged groups to social housing and renewable energy projects. The bank’s capital is used to fund its growth so that the money can then be loaned to a wide range of inspiring ethical organizations. “We aspire to a sustainable, transparent and diverse financial sector that makes money work for positive change” (Vision and impact of Triodos). You can find out more about the projects in which Triodos Bank invests here.
The Co-Operative Bank: best ESG rating
With a score of 9.2 the cooperative bank has the best Environment, Social and Governance (ESG rating) ratio of any high street bank in the UK and is now recognized by independent experts Sustainalytics. They stopped funding fossil fuels in 1998 and since 2007 they have been totally carbon neutral. The Bank strives to be a long-term sustainable business that makes a positive difference to communities and does not provide banking services to organizations that are involved in human rights conflicts, contribute to the degradation the environment, abuse animal welfare or act irresponsibly. . Additionally, the Co-Operative Bank supports the third sector by providing free banking services to charities, helping to address youth homelessness, fighting abuse and advocating for human rights.
Ecology Building Society: “We use your savings to have a positive environmental impact”
Their vision is a just society in a sustainable world by enabling sustainable buildings and communities. The green building society´s values fairness, openness and responsibility to people and the planet. To improve the environment, they support and promote green building, renovations and sustainable community projects. They specialize in providing mortgages to charities, voluntary organizations and community groups that support the environment or provide benefits to local communities. On their websitefind customer projects and the story of their sustainable construction.
Charity Bank: “Uses your money to lend to charities and social enterprises”
The charity bank lends money to charities, social enterprises and organizations that tackle social and environmental issues. By helping charities like TREASURE, a community group with the goal of developing renewable energy resources in their area, the Charity Bank loan has helped TRESOC expand its solar portfolio to support a local dairy farm. The money allowed the farm to archive additional annual income by saving on electricity costs. Other charities like the Independent Cinema Office Group, the Big Creative Education Community or the YMCA Black Country Group are all charities in different sectors, although they have all found support from the Charity Bank when they
impossible to find it elsewhere. The bank shows people how their savings could be invested ethically while helping to improve the lives of local communities.
Banks that see their customers move elsewhere due to climate, sustainability and community concerns are more likely to reduce their investments in fossil fuels or unethical investments. By taking your savings out of the bank, you are helping to stop their supply of money to be spent on unethical investments. Make it a journey of learning and exploring the world of money and the influence you can have! Discover your true beliefs and values, see the importance of each, and try to make a small change each day.