This is a guest post by written by Karen from https://moneyandmarriage.net/
Imagine if banks had their own superhero capes, doing awesome things to make the world better. But here’s the thing: when you take a closer look, not all banks are as heroic as we’d like to think.
While I was working on this article, it became pretty obvious that many of the big-shot banks in the UK aren’t exactly the good guys when it comes to doing right by people and the planet. But don’t worry, there are a handful of banks and building societies that are actually trying to step up and be better, even if they’re not in the spotlight as much!
So, what’s the deal with “ethical banks and building societies”?
When you stash your cash in a bank, they use it to help out other folks and businesses. But here’s where it gets tricky – you don’t have much say in where your money goes. It might end up supporting stuff like weapons or gambling, even if that’s not your vibe.
Ethical banks are the good eggs in the banking world. They’re all about not causing harm to the environment or society. Some of them even kick it up a notch by putting their money into companies and projects that are making the world a better place.
People who want their money to do good things do their research to find the best ethical banks. Figuring out which banks are truly ethical can be a bit puzzling, but I’ve got your back to break it down.
So, what’s the deal with ethical banks?
“Ethical banking” is like a flexible set of rules. Basically, it means a bank avoids doing things that mess up people’s lives or mess up the planet. Ethical banks stay away from investing in businesses like oil, tobacco, weapons, or businesses that aren’t so great for society, like casinos.
Usually, an ethical bank uses your money to support things that are good for the environment, like clean energy and projects that help out local communities. Some of these banks are also all about being honest and treating customers well, even if they don’t totally change everything about how they do things.
Alright, so which banks in the UK are on the ethical side?
At the time of writing, the Banks & Building Societies: Ethical Comparison Ratings Table rates The Charity Bank as the number one ethical bank in the UK.
Charity Bank doesn’t offer current accounts, but does offer savings accounts and loans. If you set up a savings account, the money you store away is used to fund loans given out to charities and social enterprises. Check them out HERE.
Close second are Ecology Building Society and Triodos, both scoring a GSC Ethical Score of 98%.
Ecology Building Society
Ecology was the UK’s first dedicated green mortgage provider and is a well-established eco bank. It’s all about the environment and works towards building a more sustainable future. That’s why it only lends money to people who want to make greener choices in their homes and lives.
Triodos has been around since 1980 and they’re all about putting their money behind things that are good for people and the planet. They’re super careful about where they put their cash. They steer clear of stuff like coal, fossil fuels, or weapons. They even spill the beans about where they’re investing on their website.
They’ve got different types of accounts, like current ones (where you pay a small fee each month), savings accounts, and other cool stuff for businesses and charities. People think they’re good for being ethical champions and having excellent customer service.
Leeds Building Society
Leeds Building Society says it puts “fairness, transparency and good ethical practice remain at the heart” of everything it does. As a building society it will not invest in fossil fuels and all its buildings run on 100 per cent renewable electricity.
Nationwide Building Society
As a building society, Nationwide must hold at least 75% of its assets in residential property, making it far less likely than its big bank competitors to be lending to unsustainable firms. Its profits are also invested back into the business for the benefit of borrowers and savers (it’s “members”) rather than shareholders.
Skipton Building Society:
As well as not investing in fossil fuels, Skipton offsets more emissions than its operations produce. Its partnership with the Yorkshire Dales Millennium Trust will see it plant 30,000 trees from 2021 to 2023. The partnership will also support 400 people from disadvantaged communities to get involved in creating and caring for woodlands.
So, if you want your money to be a champion and make the world better, you’ve got some pretty good choices to think about!