What is Ethical banking?

Ethical banking, also known as sustainable banking or socially responsible banking, is a type of banking that focuses on social and environmental concerns in addition to financial performance. Ethical banks use their resources to support projects and initiatives that have a positive impact on society and the environment, and avoid investing in industries or companies that are deemed harmful.

Some of the practices that ethical banks may engage in include offering financial services to underserved communities, supporting renewable energy projects, investing in fair trade and organic agriculture, and avoiding investments in companies involved in activities such as fossil fuels, arms manufacturing, or human rights abuses.

Most of the big banks will claim to be environmentally and socially conscious but in reality have major investments in fossil fuels. The UK’s big five – HSBC, Barclays, Santander, NatWest and Lloyds are guilty of this:

Some critics argue that ethical banking focuses too much on social and environmental issues and not enough on financial returns. They argue that banks have a fiduciary duty to maximize returns for their shareholders and that prioritizing social and environmental concerns could lead to lower profits. Since the impact of ethical banking is relatively small compared to the scale of global social and environmental problems. They argue that ethical banks alone cannot solve these issues and that other solutions are needed.

It's worth noting that these arguments are not necessarily mutually exclusive, and that ethical banking is still a relatively new and evolving field. Many people believe that ethical banking has the potential to play an important role in promoting social and environmental sustainability leading to a more equitable economy.

Ethical UK banks:

1. Monzo - app based so low carbon footprint, tries to be socially conscious and does not invest in fossil fuel companies

2. Starling Bank - another app based bank and voted ‘Best Current Account Provider’ at the British Bank Awards 2022

3. Nationwide - Britain’s biggest mutual bank (non profit organisations owned by the members not shareholders)

4. Triodos Bank - a new bank to the UK (2019) that publishes all of its investment to it’s website, full transparency is rare in the sector

The global green scene this week 🌱

Finland ended it’s homelessness by giving homeless people housing! 😲

There is an open letter to governments that if public money is used to create software the code should available to the public

Belgium legalised ethical hacking