Now's the Time to Make the Switch: Ethical Banking
21 April 2020
In December 2019, UCL divested from fossil fuels, committing to end investment in any company involved in fossil fuel extraction or production. Feeling inspired? Sustainable UCL has provided this guidance to help you switch to an ethical bank for your own finances.
Opening an ethical bank account means that you entrust your money to a bank which is concerned with the social and environmental impact of its investments and loans. Currently over 80% of people in the UK have their current account with one of five big banks. Unfortunately, these banks regularly receive negative ratings when it comes to ethics. But how do you determine which banks are ethical?
Check whether a bank is transparent about where it will invest your money and read their ethical investment policies. Do they invest in companies that manufacture nuclear weapons or finance coal mining projects and fossil fuel projects, thus enhancing global warming? If so, this might not be the most ethical bank
2. Tax Avoidance:
Another warning sign to look out for is whether a bank is paying its taxes. Tax avoidance is an ethical concern with banks that artificially shift their profits to places with very low or zero corporate tax rates. Due to this trick, countries lose large amounts of potential tax revenue.
3. Sustainable Services:
Check how the bank is incorporating sustainability into its operations. Do they have a sustainability policy or are they taking active steps to improve their impact on the environment, such as lowering their carbon footprint?
4. Read Expert Advice:
Not-for-profit organisations such as Ethical Consumer, regularly rate banks for how ethical they are. Get insights from their guide, or find more accessible information on finance on sites such as Young Money Blog or the Good with Money guides.
By engaging in ethical banking, you can ensure that the way you manage your money aligns with your values and your money has a positive impact in the world.
*Photo by Micheile Henderson.