switch to an ethical bank
Disclaimer: This is not financial advice.
Switch to an Ethical Bank for a Sustainable Future
Most of us don’t think twice about where our money sleeps at night. However, while it’s sitting in your bank account, your money doesn’t just stay put. Banks use your deposits to fund loans and investments, and unfortunately, many major banks channel these funds into fossil fuel projects. Since 2016, the world’s 60 largest banks have collectively poured a staggering $6.9 trillion into fossil fuels. That’s a huge investment in industries that contribute to climate change and environmental destruction.
By switching to an ethical bank, you not only prevent investment in fossil fuels, your money could also be used to fund renewable energy, community projects, and other sustainable initiatives.
Why Switching Matters
The impact of where you bank is far-reaching. Research shows that keeping money in a carbon-intensive bank can indirectly contribute up to 2.4 tonnes of CO2 emissions per £10,000 you have deposited each year. In contrast, ethical banks refuse to fund fossil fuels, instead directing their investments towards projects that foster a greener, fairer economy.
In fact, one US study suggests that moving just $8,000 from a carbon-intensive bank to a climate-responsible one results in a climate reduction equivalent to twice that of adopting a vegetarian diet for a year — and the more money you have, the greater the impact.
How Bad Is Your Bank?
If you’re wondering how your current bank stacks up in terms of environmental impact, it’s important to look at their funding habits. Some banks are heavily invested in fossil fuels, while others focus on sustainable, green projects. To help you assess the environmental footprint of your bank, MotherTree has provided a comparison of how much CO2 is emitted by depositing £10,000 in various banks and Bank.green have provided their own rating.
To give you an idea of what a tonne of CO2 is, one tonne is equivalent to one passenger’s share of a flight between London and New York.
| Bank | Tonnes of CO2 Emitted Per £10,000 (MotherTree) | Rating (Bank.green) |
|---|---|---|
| Barclays | 2.4 | Your money is being used to fund the climate crisis at an alarming rate. |
| HSBC | 2.2 | Your bank is failing on climate responsibility. |
| First Direct | 2.2 | Your money could be funding the climate crisis at an alarming rate. |
| Chase | 1.9 | Your money is being used to fund the climate crisis at an alarming rate. |
| Santander | 1.7 | Your money is being used to fund the climate crisis at an alarming rate. |
| NatWest | 1.3 | Needs to do better. |
| RBS | 1.3 | Needs to do better. |
| Monzo | 1.1 | Climate responsible. |
| Lloyds | 0.7 | Needs to do better. |
| Halifax | 0.7 | Room for improvement on climate responsibility. |
| Metro | 0.7 | Leader in climate responsibility. |
| Starling | 0.6 | Not yet rated. |
| Virgin Money | 0.5 | Leader in climate responsibility. |
| Nationwide | 0.4 | Leader in climate responsibility. |
| The Cooperative Bank | 0.3 | Leader in climate responsibility. |
| Triodos | 0.3 | Leader in climate responsibility. |
The Best Ethical Banks in the UK
Triodos Bank: Known for transparency, Triodos only funds projects that have a positive environmental or social impact. From wind farms to organic farms, your money works for good here.
The Co-operative Bank: With a longstanding ethical policy, this bank avoids investments in fossil fuels, arms, and tobacco while supporting charities and renewable energy projects.
Nationwide: As a building society, Nationwide is member-focused and has a history of ethical banking practices. It invests in sustainable housing and community initiatives.
Practical Steps to Switch Bank Accounts
Choose Your Ethical Bank: Explore options such as Triodos, The Co-operative Bank, and Nationwide to find one that aligns not only with your values but also with your practical needs. For instance, while Triodos stands out as the most ethical choice, it charges £3 per month for its current account and offers fewer financial products compared to Nationwide.
Open a New Account: Once you've chosen your new bank, go online to their website and open a new account. You’ll need to provide documents such as proof of identity and address.
Use the Current Account Switch Service (CASS): If you want a hassle-free experience, you can opt to use CASS. Most UK banks participate in this free service. CASS ensures a seamless transition by transferring your direct debits, standing orders, and salary payments to your new account within seven working days.
Manual Switching Option: If you prefer, you can choose to handle the switch manually. This involves contacting companies to update your direct debits, standing orders, and salary payments, and moving your funds to your new account yourself. This approach requires more effort and time but gives you control over the process.
Close Your Old Account: Once you’re confident that all payments have been successfully transferred, close your old account to avoid any lingering environmental impact.
Spread the Word: Share your decision with friends, family, and colleagues. Encourage them to consider the impact of their bank accounts too. If you're passionate about the cause, speak to your employer or business about making the switch to an ethical bank for their corporate accounts as well. Encouraging businesses to move their funds to green alternatives can amplify the positive impact and help create a broader shift towards sustainability.
Find out more
MotherTree Carbon Calculator: Calculate the carbon footprint of your savings.
Bank.green: a platform that helps identify banks funding fossil fuels.
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