For many of us, banking is an everyday necessity. We use our bank account and credit cards to manage our finances, and choose a financial institution, such as a bank, to keep our money safe. But, when it comes to ethical banking, do you know what that means, and what your banking options are?
This article will explore what ethical banking is, the growing options available in the UK, and what to look out for when choosing a bank with an ethical stance.
What is Ethical Banking?
Ethical banking is a type of banking that goes beyond the standard services, and also considers its environmental and social impact. It typically focuses on ethical investments that aim to explore responsible approaches to community and environmental issues, such as green energy, poverty, and animal welfare. It’s a conscious choice for people who are looking to invest money in a different way and align their financial activities with their values and beliefs.
This differs from traditional banking, as the focus is on ensuring that the money invested is used in a socially and environmentally responsible way. It looks to create positive and beneficial outcomes for the environment, society, and communities, without causing any damage.
Sustainable Banking Options in the UK
There are a growing number of banking options in the UK that fit the ethical and sustainable criteria.
Triodos Bank is one of the preeminent examples. They are a sustainably-driven bank that pledges to be a proactive force of positive environmental and societal change. Their investments are alone with small and medium enterprises, charities, and social enterprises which aim to improve society, and make a real difference.
Ethex is another example. They are an ethical investment platform that encourages savers to put their money to work in creating a better world. They have a range of ethically sourced investments, which have a range of themes, such as social housing, renewable energy, and more.
And, finally, Unity Trust Bank is a ‘socially conscious’ bank, which channels its funds into a range of activities, such as environmental projects, educational charities and housing associations. They are also set up to provide banking services to community organisations, charities, voluntary groups and social enterprises.
What to Look For When Choosing an Ethical Bank
When researching and deciding which ethical bank to go with, there are a few key things to consider.
Firstly, you should look at the track record of the bank in terms of sustainability. Are their investments and activities focused on long-term sustainability, and do they have a positive long-term outlook on their investments?
You should also look at their policies on lending, fees, and charges. Are their policies transparent and fair, and do they offer competitive rates?
It’s also important to consider how the ethical bank’s activities impact the wider environment, and whether they are taking measures to ensure that they are helping to create a positive social and environmental impact.
Finally, it is important to ask for customer feedback. Ask around for advice from others who have invested or used the bank, and find out their thoughts and experiences.
Conclusion
Sustainable and ethical banking is becoming increasingly popular in the UK, and with a growing number of options available, it is worth researching and finding one that best aligns with your values and beliefs.
When choosing an ethical bank, it is important to consider their track record, their policies, their impact on the environment, and customer feedback to ensure that your money is being invested in the most beneficial way possible.