Green Your Bank Account
Switching your bank accounts is possibly the single biggest change you can make to broaden your positive social impact.
Our bank account is so often nothing more than a convenience. You can’t live in the modern world without one - it’s like having a fridge, or underwear. Whether we like it or not, financial structures enable everything we do. Our bank accounts become part of the background apparatus of our lives and provided nothing goes wrong we barely notice them.
This attitude is rapidly changing as more and more evidence emerges of banks and the finance system funding industries that are increasingly at odds with the social and planetary challenges we face.
The Bureau of Investigative Journalism and Unearthed produced records from May 2013- 2019 to show that British-based banks and finance houses provided more than $2 billion in financial backing to Brazilian beef companies linked to Amazon deforestation.
Barclays is the largest individual provider of current accounts in the UK and as research in Ethical Consumer Magazine shows, also Europe’s biggest financier of fossil fuels since the Paris Agreement. From 2016-19 the company provided $118.1 billion in fossil fuel funding. At its AGM in May 2020, over 75% of Barclays shareholders voted against a resolution to end the company’s investments in fossil fuels. HSBC is the fourth largest banking group in the UK. The company has the worst gender pay gap of any UK bank, with women earning just 52p for every £1 paid to men. It has publicly backed China’s recent anti-democratic legislation in Hong Kong.
The money you put in the bank doesn’t simply sit in your account like biscuits in the jar. Your bank actively uses it in investments of its own choosing, and turns a pretty healthy profit.
You may not have particularly significant savings but would you really want a penny of your hard earned cash going towards forest clearance or new petroleum extraction technology? Probably not. So it’s a question of principle rather than quantity. Also remember that your money is added to the savings and assets of many, many other bank customers. Although you might not have squillions, your money forms a fractional part of a much larger financial network that has enormous investing power.
As the editorial team at Ethical Consumer Magazine puts it “the place of most banks at the centre of the web of business means that the choices you make can become amplified across the economy. When choosing a bank, you are in a sense choosing how you want the whole economy to look.”
There is also a difference between not funding harmful initiatives and actively investing in positive impact projects. Triodos Bank invites its customers to “Live by your values. Bank by them too.” Triodos is a purpose led bank who set the standard when it comes to positive impact investing. Their head of investment Analysis and Economics, Hans Stegemen outlines the difference between not doing harm and actually helping - “Until recently, a lot of sustainable investing has been about exclusion – what not to invest in. We’ve always had an investment approach that went well beyond exclusions... a strategy that all companies invested in are making a positive impact on society and the environment.”
Another interesting move towards greening the financial world is the demographic shift going on whereby millennials are replacing baby boomers as the most populous, influential portion of society. Morgan Stanley’s Institute for Sustainable Investing found that in 2017, 86% of millennial investors were interested in investing in sustainable causes. That figure is now closer to 95%.
Younger people are demanding responsible business practice and sustainable products - the idea that all people care about is their % return is starting to look dated, shortsighted and unethical. There’s a growing cohort of investors who want the return on their money to be just one metric amongst others - how is their bank contributing towards greening the economy and funding social and environmental change for the better? A bit of research now means that you can find a bank account that uses your money to invest in anything from renewable energy sources to organic farming practices, microfinance to day nurseries.
I’m not a financial advisor so wouldn’t dream of offering you guidance on what best to do with your money and where to park it. I’m just trying to pique your interest.
Financial systems lie at the very heart of everything we do and won’t change unless forced to by consumers. Voting with your wallet - literally - will not only enable ethical banks to increase their financing of worthy, responsible, future-focused projects, but will also force the really big banks to reconsider their damaging policies and start redirecting their spending power towards something more worthy than coal.
There is SO much more that could be said on this subject and I could talk about it all day. If you have any comments or would like to discuss this then please get in touch. It’s an important topic and one we should all be talking about.
For a number of other ideas to expland your business’ positive social impact, click over to my blog on the “Ripple Effect”.
