How to choose an ethical bank account
March 12, 2013 at 2:17 pm
Hot on the heels of contributing to a worldwide financial crisis plunging the economy into austerity, Barclays Bank has posted pre-tax profits of a staggering £5.9 billion and a staff bonus pool of eye-watering proportions. In the only move they have left, or rather they have ever had, customers are choosing to walk away and invest their money elsewhere. There is a banking revolution going on and it has never been easier to get involved in the resistance effort. This article will help you find an account in an institution whose morals match your own and give you a quick rundown on how and why to choose an ethical banking account.
First of all navigate to the Ethical Consumer’s Free Guide to Banking Current Accounts. The simple design belies the sheer amount of research behind the scenes. Here 30 of the UK’s major banking institutions are rated on an ethical scale from 0 to 20. The rating takes into account five categories – Environment, Animals, People, Politics and Product Sustainability. Should one issue be of more importance to you, each one has a click-and-drag slider to modify its weighting.
Unsurprisingly, Barclays finds itself at the bottom of the table with a score of 0.5 while Coventry, Cumberland and Leeds Building Societies tie first place with 13.5. Building societies are an excellent place for ethical investments as they are bound by law to limit the amount of money they invest in certain industries. Furthermore they are owned by their members and run for the benefit of investors rather than shareholders.
A seemingly new trend in banking is dedicatedly ethical banking. For example Triodos only lends to organisations involved in positive change such as organic or fair trade businesses, and the aptly named Charity Bank, which is a registered charity, lends only to social enterprises and charities.
Another good ethical choice for your money, especially if you prefer local businesses, is a credit union. The UK now has over 400 credit unions dedicated to helping consumers access affordable credit, including more than 20 now offering current accounts. As they are far smaller institutions, you will not find these listed in the score table.
The Free Guide to Banking also contains a special report on the industry in general – outlining the intrinsic problems in our current collapsing system and further chronicling the latest indignities perpetrated by the ‘big five’. Featured articles such as “Stop Bankers Betting on Food”, “RBS Attempts at Greenwashing Backfires” and “Islamic Banking” all make for compelling reading.
In these times of austerity and government cuts it is heartening to know we have a vote to cast even if it’s not the one on the ballot paper. As the old phrase goes, “Money talks” – well it walks too and perhaps that’s the way to make the biggest noise.
