There is a trend nowadays towards improving ethics in the world of business and the banking industry is no exception.
Over the course of this article we’ll explain what ethical banks are and whether or not choosing to keep your money with one would be a good idea.
What is an ethical bank?
Ethical banks, as they are known, are banks whose business model is designed around making sure they have no negative impact on the environment or on society.
This means that they will have certain rules and policies in place determining where they will invest your money, if you choose to bank with them.
This might involve not investing in any companies that test their products on animals for example, or companies that trade in fur.
However it is not just about withholding money from industries or companies whose practise is against the ethical code of the bank. Ethical banks like to take positive action as well, where possible, promoting environmental and social progression for example.
Should I join an ethical bank?
Banking with one of the UK’s ethical banks is a great way to keep your money and your moral convictions safe at the same time.
If you want to ensure that the money you keep with your bank isn’t being invested in any companies or industries that you consider unethical, then ethical banking could be the right option for you.
Some ethical banks may make smaller profits than non-ethical banks due the restrictions on the number of companies they’ll do business with. However this shouldn’t mean you get a worse deal when you bank with them – for the most parts you’ll be getting the same financial products at the same value as you would with any other bank, all other things being equal.
Use our current account comparison service to compare accounts from ethical and non-ethical banks – we think you’ll be pleasantly surprised by the results.
Or if you’re already set on ethical banking, simply compare accounts from the various ethical banks and get the best deal on your money, all the while making sure it goes where you want it to.
Which ethical banks operate in the UK?
There aren’t a huge amount of ethical banks operating in the UK, but the numbers are steadily growing.
The Co-operative bank was the first in the UK to get the ethical label, publicly focussing on withholding investments from certain companies they deemed unethical or immoral. The Co-operative bank also owns Smile, a subsidiary ethical bank.
Another example of an ethical bank in the UK is Triodos, who specialise in savings accounts and other similar everyday banking products.