MoneyTransfers.com has pulled together 5 of the key things to look for that are signs of more responsible banking practices.
They include searching for banks with specific b-corporation status, which means they have met a set of standards of performance, accountability, and transparency in various areas of their business; looking into any investments that are publicly known to check whether they align with your values; and checking for any emissions reporting or offsetting programmes so you have a better idea of the wider impact of the bank.
Accountability challenge
The social responsibility of banks, and whether they have one at all, is open to debate.
There is no doubt that there has been an increased public interest in socially responsible banking in the last 10 years, just like there has been in ESG (Environmental, social, and corporate governance) investing,
said Jonathan Merry, CEO of MoneyTransfers.com.
Every consumer will have an individual take on what constitutes ethical behaviour from their bank, or at least what they are willing to tolerate. For some, funding of oil and gas projects will be a factor which is where reports like Banking on Climate Chaos can help them make more informed decisions.For others, it might be important that they fund sustainable projects in other areas such as by donating to carbon offsetting programmes. We believe this set of pointers will get them off to a good start to finding what is at least the most ethical bank for them.
Jonathan Merry, CEO of MoneyTransfers.com
Examples of ethical banks
Triodos Bank, a b-corporation, was voted the UK’s most ethical bank in a Which?/Ethical Consumer survey in 2021.
UK building society Nationwide was the largest institution that ranked highest in the same survey. The survey highlighted that it had at least 75% of its assets in residential property, meaning it was less likely to fund unsustainable practices. As a building society, it is also accountable to its owners – those that bank with it – rather than shareholders.
French banks Helios and Only One pledge to only invest customers’ money in sustainable practices.
Of large-scale full banks, La Nef was ranked the most ethical bank in France by Eupedia
The Banking on Climate Chaos report praises the likes of France’s La Banque Postale for a policy committing it to exiting oil and gas financing completely by 2030, and having a “robust” policy on coal.
The biggest fossil fuel financer, according to the report, is JPMorgan Chase, AKA Chase Bank, followed by Citi, Wells Fargo and Bank of America.
In 2021, the US’s Truist Bank issued its first ESG-focused social bond of $1.25 billion.
