How to make your money work… for the planet!

Jon Rowe — Sun, 08 Oct 2023 21:24:36 +0000

Ealing FoE member Jon writes about ethical banking...

As a father of a three-year-old daughter living in South Ealing, with my wife and I expecting a new baby any day now, I increasingly find myself looking for ethical choices to contribute towards a sustainable future. Looking for ways that can make me feel proud to protect the world we are handing down to future generations. Having some kind of an answer when my children inevitably ask me: What did you do to help look after the world we are inheriting?

Finding ways to answer that question can be daunting, whether it lies in lifestyle, work and life choices, or acts of campaigning or activism. But an area I overlooked for too long, whilst I was busy sorting the recycling and cutting down on meat and personal travel by car, is who I choose to bank with.

So when I recently looked to open a children’s savings account for my daughter, I wanted to make an ethical decision that was not only contributing to her future in some way but also, at the very least, not contributing to the destruction of the planet’s ecosystem. This small life choice opened up a world of ethical banking to me that I had previously been embarrassingly ignorant of, and led me to clean out the fossil-fuel tainted skeletons in my banking closet.

One of the most significant changes we can make in our lives to protect our environment, climate and our society is to make ethical choices for our savings, debts, loans, mortgages and pensions. To ask ourselves what our banks are doing with our money whether it is good or bad for our world. And with a growing number of ethical banking choices out there, it’s also one of the most straightforward changes we can make, with very little impact on our lifestyle.

What does ethical mean?

Now, ‘ethical banking’ can be a vague and slippery term ranging from questions about transparency in business practice and investments, to how staff are treated, to active investment in the non-profit and environmental sector, or simply whether they avoid investing in particular industries such as weapons, tobacco and fossil fuels. Ultimately your ethical priorities are up to you.

Since my own number one concern right now is the climate crisis, I set my minimum bar at whether the bank or building society avoids any investment in the fossil fuel industry. With any other ethical benefits a positive bonus. So, for my daughter, I went with Yorkshire Building Society, which has no investment in the fossil fuel industry according to bank.green and has the added benefit of having a branch in Ealing. Plus with their One Day account, which at the time of writing has a very competitive interest rate, you get a nice little passbook which is fun for kids!

How to switch

I quickly shifted my other accounts to more ethical choices, with fossil free banks as my priority, and couldn’t believe how quick and simple it was, kicking myself for not making the move before. Moving current accounts is made super easy by the Current Account Switch Service, a guaranteed service that shifts your money and direct debits and triggers the closure of your old account. You simply set up the new account, tell them where you’ve moved from and the switching service does the rest within about a week.

So if, like me, you’re late to the party on ethical banking I encourage you to check the credentials of your bank, and make the change if you’re unhappy with what you find. A comprehensive online resource is Ethical Consumer. But bank.green is a quick and easy place to start if you are time-poor and especially concerned about climate change. Money Saving Expert also offers a short guide to Ethical Banking, and of course you can cross-check any of MSE’s lists of top-rated banks against ethical credentials using other ethical banking sites.

What next?

If you don’t know where to start, Friends of the Earth have a longstanding relationship with Triodos Bank, which is considered pretty much the gold standard on environmental banking. Triodos invests in socially and environmentally beneficial projects. And Friends of the Earth Ealing use Co-operative Bank which has a solid reputation across a range of ethical practices according to Ethical Consumer. Also with a branch in Ealing.

It’s important to stress that ethical banking choices are not small or niche, and there are plenty of current accounts, savings, ISAs, and business accounts available at banks that strive for higher ethical and environmental standards. Most with the usual FSCS protections (do check).

Mortgages and Pensions

Mortgages can be a little more complex, especially if you’re locked in to a fixed term, and it’s always best to speak to a financial advisor. But as a starting point, Ethical Consumer rate Nationwide and Ecology Building Society highly.

Pensions are very much another day’s work, but a large and growing range of ethical funds are available and according to Make My Money Matter, greening your pension can cut your carbon footprint twenty times more than going veggie, giving up flying and switching energy provider combined. So it’s absolutely worth investigating, and I myself changed to a fossil free fund some time back but again, make sure to seek proper financial advice!

So if you want to feel good about an ethical choice with minimal effort, check out the credentials of your bank and switch today!

The post How to make your money work… for the planet! first appeared on Ealing Friends of the Earth.