How ethical is your bank? People in the East want a say in how banks invest their money
Research by The Co-Operative bank has called for a ‘kitemark’ system.
We all like to know where our money is being spent, and whilst there’s been a lot of focus on shopping sustainably and locally in the last few years, it seems a lot of people can’t say the same for the place where our money is actually deposited to.
More than two-fifth (41%) of people in the East want a say in how their banking provider approaches key social and sustainability issues.
The research by the Co-Operative bank had prompted suggestion that a clearer ‘kitemark’ system should be put in place to help consumers easily identify banks that meet ethical and environmental standards.
Maria Cearns is Managing Director, Customer and People at The Co-Operative bank: “It’s about making it absolutely sure that you know what it is your bank is doing around net zero, around how it treats customers, around renewable energy, around who it banks and doesn’t bank.
"Banks absolutely under pin our society, and I think this research says consumers are beginning to understand that.”
It’s easy to forget that where we store our money has consequences beyond our own savings.
The new research shows that almost a quarter of people in the East say they will potentially stop using a company if it acts in a way that doesn’t represent their values.
Whilst banking and ethics aren’t two things you often put together, Dr James Dyke is an Earth Systems Scientist, and tells us why it’s important to address: “Banks are absolutely crucial for us to be able to avoid dangerous climate change..."
"Banks are centrally involved in the continued expiration and exploitation of fossil fuels. Many people don’t really appreciate just how much money banks give to the energy majors. how many billions of dollars of financing”
“They are continuously investing billions, that’s how banks make money. So how they invest it, how they are making their money is something that we must all be much much more engaged with. Because we do have some power to control some of the aspects of investments from these banks. We need to use that power and we need to quickly. “
According to Money expert, the bank Triodos is top of the ethical banking list. They refuse to invest money in commodities or industries such as mining, fossil fuels, fracking and arms military.
Starling Bank is also one of the most ethical app-based banks around. Like Triodos, they expressly avoid fossil fuels, mining, arms and military, and instead invest in “government securities and other high quality liquid assets”.
Since they’re a paperless, branchless bank, their carbon footprint is significantly lower than some of their competitors.
Whereas, according to Ethical Consumer, several UK banks are in the top 60 in the world for fossil fuel financing. It includes Barclays in 7th position which funded over $144 billion in 2020, and HSBC in 13th place with over $110 billion.
There is a growing trend towards improving ethics in the world of business and the banking industry is no exception.
The research also shows that when we are asked what social and environmental issues are most important to them, a third (33%) cited climate change with a similar number specifying adequate access to healthcare (likely fuelled by the pandemic and fears of resulting hospital wait times). Poverty and homelessness (30%), mental health awareness/action (28%) and animal welfare (24%) make up the rest of the top five.