When you deposit money into savings and current accounts, banks use that money to invest in projects and give out loans to businesses etc. With banks often lacking transparency, your money could be being used to support projects that you don’t agree with without you knowing - including fossil fuel extraction, fracking, arms manufacturing and deforestation. “Greenwashing” has become a big problem - there is a tendency to display and advertise the ethical and sustainable policies a bank or business may be supporting as an attempt to obscure/cover up the unsustainable and unethical projects they are supporting and don’t wish customers to know about.

The following banks have been found by multiple groups to have unethical or unsustainable practices:

 

Barclays: Barclays is recorded as the worst bank in Europe, in terms of ethics and environmental impact. Since the Paris Agreement, Barclays has reportedly funded £106 billion into the fossil fuel sector, including investing into the UK fracking industry. Barclays has supported the North Dakota Access Pipeline, continues to have investments in companies that extract oil and gas from the Arctic, and funds deforestation, fracking and tar sands companies. It is also the 4th biggest contributor to the plastic supply chain out of banks around the world. However the bank aims to be a "net zero bank" by 2050, claiming plans to phase out financing to carbon intensive companies, and plans to invest £100 billion in green companies by 2030.

 

HSBC: The Fossil Finance Report 2021 has ranked banks around the world in terms of how much money they are contributing to fossil fuel companies. HSBC is within the top 15 highest contributors to fossil fuel companies, and is the second worst in the UK, having contributed over $28 billion in 2020 alone. HSBC has funded crude oil extraction within the Amazon Rainforest, coal mining and deforestation programmes. HSBC has also been ranked as the 6th biggest contributor to plastic supply chain out of banks globally. The bank’s sustainability report includes a commitment to phase out the financing of coal-fired power and thermal coal mining by 2040, and an aim to be a net zero company by 2030.

 

Santander: Santander has reportedly funded nearly $7 billion to companies involved with fossil fuel expansion in 2020 - nearly double than what they contributed in 2019. $3 billion of this was invested in Offshore oil and gas companies. Between 2016 and 2020 the bank increased its funding in fracking companies, arctic oil and gas extraction and coal mining. Santander’s recent sustainability strategy, however, states the bank is now refusing to financially support oil and gas drilling projects north of the arctic circle. The bank has also pledged to be carbon neutral by 2050.

 

Natwest: Natwest has contributed around $861 million to companies linked to the expansion of fossil fuels in 2020 alone, including $23 million to oil and gas extraction companies in the Arctic.and $86 million to companies involved in coal mining. It has however decreased its involvement with fracking companies and liquefied natural gas. In the Sustainability Report 2020, the bank has pledged to halve its financed emissions by 2030, and pledged to drop involvement with oil and gas companies that do not line up with the Paris Agreement. Natwest is doing better than other banks in terms of ethics and sustainability, but still has a lot to do.

 

Below are examples of a number of sustainable banking options:

 

Triodos bank: Triodos bank is focused upon providing financial support to companies that are sustainably and ethically focused. Investing in renewable energy projects, organic farming and ecological development projects, triodos only provides funding to companies that want to make positive differences. The bank was awarded the title of Best Ethical Finance Provider in the British Bank Award 2021, as well as Best Savings Account Provider. Triodos is an online bank, with no physical branches - however customers are still provided with a physical bank card. You can set up an account easily by setting up a personal account and downloading the app. Triodos charges a £3 a month fee for having a personal account - attributing the cost to their lack of hidden costs and large overdraft fees, that other banks charge to present their accounts as “free”.

 

Starling: Starling bank is also an online bank, with no physical branches. Starling refuses to provide investment, or take investment from, companies involved in the extraction of fossil fuels, or companies involved in promoting behaviour that is harmful to society e.g. arms manufacturers, tobacco companies etc. The bank is the founding member of UK’s TechZero Taskforce - a small group of UK tech companies working towards net zero emissions. A paperless company, they also show commitment to sustainability by powering their four offices on renewable energy, as well as relying on recycled PVC to make

 

Co-operative bank: Co-op bank prioritises social and environmental responsibility. In comparison to other banks, co-op bank is transparent about its sustainability, listing all areas it needs to improve to become more sustainable, as well as areas it is doing well in, in the yearly sustainability report. Co-op bank measures and reports its direct emissions using UK Government guidelines, has been carbon neutral since 2007, and funds a large number of charities including Amnesty International UK and The Gola Rainforest Conservation Project. The bank also refuses to invest in businesses that do not line with their ethical policy. However, after suffering a number of financial losses, the bank was saved by investments from a number of US hedge funds in 2013. Some of these investors are much less transparent about their own involvement with unethical companies.

 

What can you do?

Transferring banks to more sustainable option is an easy way to ensure your money is funding projects you are supportive of. Moving banks is far easier than it used to be.

You can also put pressure on banks to improve their sustainability! Sign petitions and contact banks personally to demand greater transparency, as well as an end to funding of fossil fuel companies and an end to Greenwashing.