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Fed up with greedy bankers? Five reasons to join an ethical bank

Apr 15, 2011

Fed up with greedy bankers? Five reasons to join an ethical bank

It’s not often banks are commended for their services to society.

To the contrary: since 2008 the word “banker” has become almost like a swear word!

But should all financial institutions be tarred with the same brush?

You might have noticed a number of so-called ethical banks claiming to be putting social, ethical and environmental concerns before simply making money.

Three of the foremost examples are Co-operative Bank, Triodos Bank and Shared Interest Society. Judging by their growth and success to date, these groups are blazing a trail that others are sure to follow.

So what’s in it for you to be this – well – virtuous? Particularly if that’s not 100% your thing?

Easy: changing your banking habits allows you to make a stand against the “evil banking empires” that you readers clearly loathe as much as we do!

Here’s the five top reasons to wait no longer before off switching funds to an ethical bank…

1. Green beats greed Most of us try to do our bit for the environment. We make sure our empty beer bottles go in the recycling bin and turn off the tap while we’re cleaning our teeth. But can the bank we choose make a difference to our planet?

You bet…

  • Triodos Bank, together with its climate and energy funds, finances more than 175 wind farms, 85 solar plants and several small biomass and hydro projects. It also funds 1,200 organic food and agriculture projects.
  • The Co-operative Bank was named Sustainable Bank of the Year in 2010 by the Financial Times. Its parent group aims to increase corporate lending for renewable projects from £400m to £1bn and wants every UK school to have a green energy source by 2020 – it is already fitting solar panel systems through its £1m renewable energy fund.

On top of the conscience boost, this is good news for you money too, as the renewable industries they invest in are also high growth.

2. The power’s in YOUR pocket

You may not realise it, but your saving habits can literally help save lives. Did you know that some conventional banks have used funds – i.e. your money – to fund the arms and tobacco trades? Although you will never be held accountable, this money could be directly responsible for deaths in other parts of the world. Don’t be complicit in this!

  • Shared Interest claims to be the only 100% Fairtrade lender. It helps Peruvian farmers turn former mining areas into coffee-yielding communities and helps Kenyan soapstone producers earn a living. Each year it lends more than £33 million to ethical businesses across 36 countries.

3. Charity begins at home

Many of us would say we give generously to charity. On average, Brits fork out £192 a year for good causes.

But giving to charity could be easier than you think

  • With Co-operative Bank, you can support Action Aid, Shelter, Christian Aid, Greenpeace, Help the Aged, Water Aid and many other good causes just by taking out a charity credit card. With its Save The Children credit card, the charity receives £15 for every account opened plus an extra £2.50 if it is used within six months.
  • People who save with Triodos can nominate projects to receive funding, so they can have a direct input into where their money goes. And If you’re feeling ultra altruistic, you could donate money to the Triodos Foundation, which provides funding for projects involved in social renewal such as art and culture, education, sustainable energy, the environment, organic farming and healthcare.

4. Fighting back against the bankers

Many people have become disillusioned with the British banking system. If it wasn’t enough that they practically crippled the economy through unwise lending, they then got our backs up by paying their executives millions in bonuses.

  • Triodos has an appealing bonuses programme. It does occasionally dish them out if a staff member has performed particularly well, but bonuses are limited to the equivalent of two months’ salary. It isn’t into just backing the fat cats either – at the end of 2009 every worker received a bonus worth €300.

5. It’s easy

Because these banks aren’t as prominent on the High Street as Lloyds, Barclays et al, some people think it’s going to be an uphill struggle to actually bank with them daily.

Not necessarily.

It can be just as easy to bank ethically as it is to bank with traditional companies.

  • The Co-operative is the closest to a mainstream bank. They offer 24-hour armchair banking on their current accounts, a High Street branch network (and Britannia branches in partnership), and a full range of complementary products: ISAs, savings accounts, loans, home and motor insurance, life insurance and credit cards. On top of that, there’s the award-winning, Internet-only Smile current account as well.
  • Triodos is a great bet for savers. They offer a range of savings accounts including regular savers, ISAs and children’s savings accounts.
  • Shared Interest is ripe for longer-term investors. You can start an ethical investment fund with just £100.

Just a footnote: it might be worth pointing out that none of these banks needed a taxpayer-funded bailout two years ago!

What do you think? Would you ditch your old-school bank for a more ethical option?

9 Responses to “Fed up with greedy bankers? Five reasons to join an ethical bank”

  1. Mark Jamieson Says:
    Apr 16, 2011 at 9:30 am

    I changed over to the Co-operative bank from Santander just under twelve months ago and it has been a fantastic change! Last month a direct debit went out two days early (thanks Orange!) which left me overdrawn. I keep a very tight budget and I don’t have, or want, an overdraft. I received a letter from the Co-op telling me I had gone overdrawn, that they were not charging me if my account was back in the black within ten days, and asking me if I was alright!! The same scenario with Santander would have left me thirty pounds lighter and a rude letter as well! Change banks today!! The service I receive from the Co-op is second to none and I banked with Barclays for over twenty five years and never received anything like the quality service I get now:)

  2. LORNA Says:
    Apr 16, 2011 at 10:44 am

    I need online banking though as I work abroad just now – Do any of these ‘moral’ banks have such a facility which is reliable please? I do find that the pin machine which I have with my Barclays account keeps funds very safe, so I need something like that which protects against fraud etc.

  3. David Says:
    Apr 16, 2011 at 3:56 pm

    I always try and usual mutual organisations and have been with the Coop since TSB was gobbled up. (I took out a savings account with them when they visited school in the 60s!) No, the Coop doesn’t take risks so you won’t get a silly mortgage, but they are there for their customers/members rather than faceless pension funds. we recently managed to get back on the housing ladder because I now have a couple of pensions coming in (though I’m long-term unemployed) and we got a ten year fixed rate deal. If you are a member – you can join at your local shop – you get money back on your financial transactions too. Except for business accounts (where I’ve found the Coop to be a bit too risk-shy) I don’t know why anyone would want to use a “normal” bank TBH…

  4. Karl Roscoe Says:
    Apr 17, 2011 at 9:43 am

    Lorna, the Coop has online banking with a pin machine to transfer funds.

  5. Amila Says:
    Apr 22, 2011 at 8:40 am

    @Lorna: yes they (Coop) have a secure online banking system that’s very reliale, they also use PIN card-readers as well. Plus you can phone 24 hours for customer service. If you’re outside the country you might want the ‘regular’ phone number not 0845, it’s 01695 53760. Hope that helps, Amila

  6. dee Says:
    May 4, 2011 at 5:17 pm

    Sorry to say may experience of the Co-op is not as rosy as those above – I took out a credit card with them and later discovered they had without my knowledge added PPI – still waiting for this to be refunded after claiming many many months ago – Now they are hiding behind the legal battle recently in the High Court -

  7. Spring girl Says:
    May 5, 2011 at 9:37 am

    I’ve been waiting to change banks for a while and thought Co-op might suit me with its ethical stance on most things, how are they on arranging overdrafts and their ‘normal charges’, does anyone know? Good to see Mark’s experience above. Wonder if its company wide or just a good branch?

  8. Adrian U Says:
    Jul 8, 2011 at 11:51 am

    The Co-op & Smile claim to be ethical and in some ways they are, but don’t for one minute think that they are any different from the big high street banks. Just check out what returns you get as a saver compared with what they charge to loan money. Currently I receive 0.25% interest for a cash ISA because I’m “a customer” but my savings are then loaned out to other poor souls at the rate of 9.9% APR!!! Not really an ethical way of doing business with your customers is it?

  9. m madacky Says:
    Jul 12, 2011 at 9:37 am

    I would but in the past most of the banks have turned me down, regardless of being in a full time job. I am lucky that I have a bank account.

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