What is ethical banking?
As active citizens, the sustainability narrative is framed around purchasing with purpose. Spending on conscious clothing, dining at ethical eateries or participating in climate protests are obvious means we, as individuals can create a positive impact on society and our planet.
But, what happens to the money that we aren’t spending? Ethical banking considers how your unused funds are invested by financial institutions within the global economy. It places value on aligning your beliefs with an organisation that upholds principles on preserving ecosystems and one that is committed to achieving the United Nation’s 2030 Sustainable Development Goals.
For those who work outside of the banking or financial services sector, it may come as a sharp surprise the money we syphon away from our paychecks is being pumped into fossil fuel industries, fracking or companies associated with rainforest destruction. For the longer-term thinkers, this also applies to how your employing organisation manages their pension scheme.
Consider – when was the last time you switched bank? The majority of us will have multiple accounts; daily expenditure versus small savings, cash ISA’s and rainy-day funds for the ‘better late than never gap year contingency plan’.
According to a 2015 Gov UK survey, 75% of personal current account holders have never switched, with nearly 1 in 5 saying this was because of the hassle and potential risks!
Financial institutions constantly address themes of mitigating and managing risk. However, for many – their conduct and commitment towards sustainability issues prove they are inadequately addressing the greatest risk of all, the climate emergency.
This article weighs in on how your banking behaviour pays dividends to your conscience and provides useful tools and a little nuance to enable you to circumvent the quagmire of ethical banking.
For the full article, head over to Millennial Money.
