intro: are you concerned about what your bank does with your money? Looking for the most effective ways of making your money agree with your principles? Ethical banks can be the opportunity you are looking for to make your money ethical. While offering the same range of services provided by the conventional banking system – such as current accounts, savings accounts, overdrafts, loans, etc. -, ethical banks have stricter policies than ordinary banks on what they will and will not invest in.
how the idea is of a bank that doesn’t invest in companies which carry out ethically negative activities and is directed towards initiatives which have a positive social and/or ecological impact. So, in practise, what distinguishes an ethical bank from a conventional one?
|conventional banking||ethical banking|
|Seeks...||financial gains||social and financial gains|
|Invests...||wherever the highest interests are to be obtained ||in companies that improve society and the environment|
|Its investment funds reward...||companies even if they act irresponsibly||companies that show social responsibility|
|Decisions are made...||by management||by staff and customers|
|Provides...||no information about what it does with our money||information about all the activities it finances|
|You...||can't decide where your money is invested||can choose the activities you wish to finance:|
- alternative energies
- fair trade
- employment schemes
where: ethical banking is already a well established reality in many countries all over the world. Here are a few examples of such institutions:
act & let them know: in the last year many customers have joined these banks because of their fairer policy, voting with their wallets and moving to providers they believe to be more ethically focused. However, if you decide to change banks for ethical reasons, but you don't tell your old bank why you are moving, you miss out on the opportunity to influence them. In any case, even if you don't move your money, sending an occasional letter to your bank can make a big difference.
- Banca Etica (Italy): it was established in May 1998 as a result of the joint efforts of over 30 organisations in the third sector with a view to developing the social economy by financing projects to reduce exclusion, safeguard environmental resources, co-operate with the poorest countries and promote sporting and cultural activities. [www.bancaetica.com/inglese]
- Co-operative Bank (UK) does not lend to businesses with links to oppressive regimes or businesses involved in animal testing or intensive farming…. [www.co-operativebank.co.uk] You can also open a bank account with smile.co.uk, the Co-operative Bank's ethical online banking service.
- Triodos Bank (Belgium, The Netherlands, UK) has a policy of only lending to organisations that it believes add value to the environment, culture, or society. The case of green funds in the Netherlands is interesting: they were first launched in 1990 by the Triodos Bank and brought about a change in the tax law (1995), allowing banks to make low interest loans for ecological and social projects. All the important banks in the Netherlands now have their own green fund. [www.triodos.com] ]
- Crédit Coopératif (France): owned by its clients, it is a co-operative bank, which has been an active member of the Social Economy for more than one hundred years. It assists and accompanies the creation and development of co-operatives, mutual organisations, small businesses, trade associations and work committees. [www.credit-cooperatif.fr].
- Cultura Savings Bank (Norway): the Oslo-based bank was founded in 1997 as a successor to the Cultura co-operative lending society, established in 1986. It prefers to lend to businesses and other projects that ‘create real value’ - for instance organic farms, enterprises producing or trading in sustainable products, etc. Some loans are also given to home builders - by preference to those planning experimental eco-houses. [www.cultura.no' target=].
- Citizens Bank: owned by the Vancouver City Savings Credit Union, Canada’s largest credit union. As part of its community donations programme, clients are invited to suggest groups, which they believe deserve a share of a fund. The suggestions are classified into four groups according to the area in which they fall. After three years in business, the Canadian bank has deposits worth over $680 million, while its pre-tax profits in 1998 were almost three million dollars. [www.citizensbank.ca].
- Australia's first ethical bank deposit account was formed from an alliance between Community Aid Abroad and Bendigo Bank. The trust supports community groups, charities and small businesses needing financial support for a project that meets ethical criteria. [www.bendigobank.com.au].
more than just banking: Get Ahead is a South African organisation established in 1994 during the worst period of Apartheid and which, in addition to its commercial services (micro-credit, business training, housing loans), also promotes employment and financially empowers local communities. FOLADE is a Latin American development fund based in Costa Rica and promoted by 22 NGOs from 14 countries, which acts as an intermediary to obtain funds for collective enterprises. This is also one of the activities of CIPDEL (Peru), which has been obtaining bank loans for producers' associations for the use of their members since the 1980s. The procedure followed by the Local Investment Fund in Mali is that inter-village committees decide the collective works (dams, wells) that are to be financed through the capital accumulated from the cotton harvest.