The UK’s biggest lenders; HSBC, Barclays, Lloyds and NatWest have made some ambitious statements about their commitment to reducing carbon emissions however looking at the figures of where the money goes, campaigners await this rhetoric to be put into reality.

We can create change by choosing who we bank with.  Thankfully there are plenty of alternatives, providing reliable and practical banking options.

So who are the most ethical banks and how do you switch?

Triodos - top of the list, Triodos only finances projects based on their social, environmental or cultural impact. The service offered may not be as user friendly as high street banking - but they are ethically and environmentally sound.

Building societies such as Nationwide are more ethical than high street banks because they have stringent regulations that limit the amount they can invest in certain industries. Also it's worth noting that profits of building societies go back into the business and not to shareholders. This along with their competitive interest rates and current account offers makes a great high street choice.

Challenger banks - new app-based banks like Monzo are, for the moment at least, a good ethical alternative as they do not currently make large corporate loans or investments.  (However it is possible that they may do so in the future and have not made any commitment to say they will not).  They often offer excellent current accounts and innovative, useful apps which make keeping track of your money really easy.

For those worried about swapping over to a more ethical bank,  there is a national scheme that helps us to do this for free, without hassle, and without losing access to your money. 

As well as high street banking, it may also be that your pension could also be greener.  Whilst many UK providers are working towards a ‘net zero’ position in terms of carbon emissions linked to their default investment portfolios, most employers will offer an ‘ethical’ or ‘sustainable’ fund, and research indicates that moving a £100,000 pension pot from a traditional to a positive impact portfolio is equivalent to taking 5 or 6 cars off the road (Financial Times, 26 Feb 2021).

Accessing your options and making a switch should be an extremely easy thing to do. Your employer or pension provider will be able to provide a full list of the investment options available and look out for an ‘Ethical’ or ‘Sustainable’ Growth (ESG) fund option.  From there you can instruct your provider to move some,or all, of your existing and future contributions to the new fund, and they will do the rest.

Habit, lack of awareness and a perceived inability to change the ‘bigger picture’ keeps us tied to systems which are both corrupt and environmentally disastrous.  But knowledge is power and if enough of us made the change we could see a really positive shift in the future of these corporate machines.