Switch to a Green Bank – Ethical Bank for the Environment

It’s been a long time coming but I decided to switch to a green bank for the environment this year. I’ve wanted to do it for a long time but I was worried about it making things difficult for me to pay off my credit card.

I decided to do it anyway in February 2021 and set the ball rolling to switch to a green bank for the environment. Another reason that I decided to do this sooner rather than later was because of joining #therippleeffect, this initiative was created to show that small changes can spread further like a ripple. So I printed out the below sheet and decided to do my bit this year.

The Environmental And Ethical Issues

Environmentally the worst banks that I list below are using funds by investing in fossil fuels and sometimes even fracking for shale gas. This means that your hard earned savings could be used to support these awful polluting industries.

Greenpeace states in their article that over 300 banks and investors are funding businesses that drive deforestation such as palm oil, soya and beef. This is linked to human rights as well because it effects Indigenous people who rely on these eco systems to survive.

Be cautious when you are looking into green and ethical banks. Some of the most polluting banks may use greenwashing tactics to distract from the fact they are investing in fossil fuels. For example using recycled paper in stores or switching to solar energy, does not make up for investing billions of dollars in fossil fuels.

There are banks which are not funding fossil fuels and only using funds for environmentally friendly schemes. Therefore it is possible for banks to use their money for good. With climate change being a very real issue for the future of our planet, we as consumers need to think more about where we are spending and storing our money.

Which Banks Are The Worst?

So if you wanted to check this information yourself. The easiest way to do it is to go to Switchit and select your bank to find out how well they do ethically and environmentally. You can also check your energy supplier to see if they’re green energy from the link to this website above.

If you would prefer not to do that I will list below some of the worst banks which are not ethical banks in the UK.

Barclays

Barclays is one of the worst banks from this list, they have poured $118 billion into fossil fuels between 2016 and 2019. This makes them one of the worst banks in Europe for funding fossil fuels! You can read more about it here.

HSBC

On the same report linked above from Bank Track, HSBC invested $86 billion into fossil fuels between 2016 – 2019, so although not as bad as Barclays they are still not an ethical bank.

Lloyds

Any of the banks that are owned by Lloyds such as Halifax, Bank of Scotland and Intelligent Finance are all considered as environmentally destructive by The Good Shopping Guide Lists and their pension subsidiary Scottish Widows won’t commit to divesting from coal, oil or gas completely. They’re not the worst on this list but their ethics are questionable.

Natwest RBS

Natwest, formally known as RBS have invested over $12 billion in fossil fuels since the Paris Agreement so again not an ethical bank and one to avoid.

Santander

Santander which own banks such as Alliance & Leicester, Carter Allen and First National has invested $25 billion in fossil fuels between 2016 – 2019. Again, not the worst bank on this list but one to stay clear of if you can.

Which Banks Are The Best?

Charity Bank

Charity Bank is owned by charitable foundations, trusts and social purpose organisations making it a great ethical choice. This is an ethical bank which uses it’s savers money to lend to charities and social enterprises.

This bank has loans and savings but no current accounts unfortunately.

Co-operative Bank

Co-operative Bank is a customer led ethical bank in the UK. They state they’re the first High Street bank in the UK to introduce a customer led ethical policy since 1992 and they are also beyond carbon neutral.

The downside to this bank is that it’s majority owned by US Hedge funds. Admittedly, I’m not a expert in this subject, however it seems that a lot of people objected to this back in 2014 because most of the US Hedge funds keep their holdings in Offshore tax havens.

Despite this, the Cooperative bank themselves do seem to be an ethical bank and worthy of mentioning.

Cumberland Building Society

Building Societies are said to be more ethical in general as they don’t have external shareholders like Banks. This does sometimes mean that they don’t offer as many services as Banks.

Admittedly, I hadn’t actually heard of this Building Society until I started researching. However, they are a Cumbria based ethical bank. They do offer services throughout mainland UK, but their branches are only in Cumbria, South West Scotland, West Northumberland and North Lancashire.

Nationwide Building Society

As above Building Societies are generally better ethically than a bank. Nationwide has a good score on the Switch It website that I linked above. They have a responsible business report that you can view, which states what they’re doing for our society, environment and people.

They don’t score as highly on the Ethical Consumer report as Triodos for example, however they are still a good choice for an ethical bank.

Triodos Bank

Triodos Bank is a Bristol based online bank, they are completely ethical bank and they are a certified B Corporation. It’s worth noting that I don’t think any of the others on my list are a certified B Corporation. If you’ve read any of my posts before you’ll know that this is the standard I look for when researching to find out if a company or brand is sustainable and ethical.

Their bank cards are also made from plant based materials, which is really cool. The only downside to this bank is that their standard current account costs £3 a month and all banking is done online or over the telephone. To be fair £3, is not a bad price considering you are paying for a truly ethical bank.

My Switch To A Green Bank

When I decided to switch to a green bank, I did some research. As mentioned above, there are several banks which are much better environmentally and ethically.

I like to have a separate current account for expenses such as rent, utilities bills, groceries etc. This just helps me to stay on top of our finances and make sure we stay within our monthly budget.

Due to this I decided to open two new accounts with two ethical banks that were the most suitable for my family.

The actual process of switching was really easy, if you give them the details of your current bank account – usually they will inform your current account of the switch and transfer all your direct debits and standing orders over so you don’t need to worry. Then your existing account is closed once the transfer has happened.

I wish I’d done the switch to an ethical bank before, it’s not actually too much inconvenience to pay off a credit card from the new account.

My next step is to switch any savings accounts I have for my children over. When this is all completed I will write to them to inform them of why I have switched and to close my remaining accounts.

This might seem a bit much, I wouldn’t usually recommend that you announce you’re leaving a group on Facebook for example. 😂 However, if the reason you’re making the switch to a green bank is because they fund fossil fuels for example. I think it’s an important step to inform your previous bank why you have left them.

Summary

As I’ve said it was a really simple process for me personally to switch to a green bank in the UK, however I do appreciate that not everyone will be able to switch to an ethical bank. For example if you have a mortgage or a student loan with one of the worst banks, it’s unlikely that you will be able to switch to a green bank.

That-being-said I think it’s something to bear in mind for the future and if you’re ever in a position that you can switch to a green bank I hope that this information will help you.

Please let me know in the comments if you have considered a switch to a green bank.

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