From carting our soft plastics to the recycling point to investing in ESG retirement funds, we’re all doing our bit to be more socially responsible. But can you say the same for your bank account? Sustainable banking is gaining more and more traction as more socially conscious consumers dispute their bank’s support of fossil fuel projects and question where their money is really going. We’ve rounded up a handy guide on ethical banking, including some tips on choosing ethical banks in your country.
Ethical banking refers to banks and financial institutions that invest money in projects that support positive social and environmental impact. Generally, this starts with the avoidance of investment in fossil fuels and can extend to impact-focused investment in climate action and human rights activism. Ethical banking is increasing in popularity as consumers become more discerning over how their money is invested.
Identifying a sustainable bank might not be as easy as it sounds. Often, marketing messages can be cleverly crafted to make it look like a bank is more ethical than it really is. Greenwashing has become an issue in many industries claiming to support sustainability. Many banks or companies claim to be ethical, despite investing heavily in fossil fuels or engaging in other harmful practices.
Do your research on your bank’s social footprint by looking at the following areas:
Your country may have local comparisons of the best sustainable banks to help you assess whether it’s time to switch. Global site Bank Green compares banks in various countries and gives them a score rating their ethical practices, including whether banks are invested in fossil fuels, and whether they have any accreditations to support their eco promises.
Choosing to bank with a socially conscious institution is one of the most powerful ways to align your finances with sustainability, but there are plenty of other things you can do too. These include:
Emma Edwards is a finance copywriter and blogger, on a mission to humanize the financial services industry by creating meaningful content that’s accessible and empowering. You’ll find her penning money tips at her blog, The Broke Generation, sharing financial insights on Instagram, or injecting life into content for her business clients.
