Banking Overview
How much do you know about your bank? Do you know what type of businesses it lends to?
Does it refuse to lend to companies with poor human rights records, that sell arms or pollute the environment, for example? Does your bank offer services to those on low incomes or the unemployed? And how many women sit on its board?
Such questions often go unasked of the banking sector. But the same caring principles that make you buy Fairtrade goods and recycle household waste can be applied to how you bank too.
Key green and ethical issues to consider
Finding a green or ethical banking option
How banks use your money
The money that you deposit in your current or savings account doesn't just sit there untouched until you require it again - your bank lends it on to others at interest.
Banks don't just lend money to current account-holding customers either, they lend to large corporations, public institutions and even governments.
As many banks are listed on the stock exchange, they are answerable to external shareholders who expect healthy returns on their investments.
While the Treasury hands down some prohibitions as to who banks can and can't do business with, it still leaves them relatively free to engage with companies that you might not approve of and they use your money to do it.
Would you approve if your bank was lending money to heavy polluting industries or even to an oppressive regime?
Key green and ethical issues to consider
Responsible Lending
The recent global economic downturn is often attributed to the 'sub prime crisis'.
Sub prime lending means giving loans to people who are considered to be in higher risk categories - those more likely to default or who have a poor credit history, for example.
This type of lending is not problematic in itself - credit unions and community development finance institutions regularly lend to sub prime candidates. Instead, irresponsible lending to customers in the sub prime category is the problem.
In the build up to the 'crunch' some financial institutions were lending 100% mortgages (and in some cases more) to people who would not be able to make their repayments in the long term.
Lending responsibly shouldn't be limited to just mortgages - it applies to all loans, big and small, and to the provision of credit cards too. Figures from the Bank of England show that UK residents owe £233bn on credit cards, overdrafts and other loans.
Key questions to ask: Does your bank have responsible lending policies that ensure that its products are targeted in an appropriate manner? And does it provide advice or debt management services to customers who fall into financial difficulty?
Climate Change and the Environment
Banks have an impact in these areas, not just in terms of who they lend to or invest in, but how they run their own operations. It is important to find out what your bank is doing to improve its environmental performance as a business: have they pledged to go carbon neutral for example? Or do they offer any green products to their customers?
Financial Exclusion
There are an estimated two million people in the UK without even the most basic bank account. Is your bank doing anything to address this situation?
For more details see our Financial Exclusion section.
Project Finance
In its most basic form, this type of financing is for companies and governments where lenders are repaid through the revenues generated, i.e. the lender has a vested interest in the success of a project.
Common projects receiving finance are petrochemical and chemical plants, power plants, telecommunications and infrastructure. But do lenders ensure that these projects are conducted in a green or ethical way?
Use our search facility to find out about your bank's policy on the environment, ethical lending, responsibility towards its customers, equal opportunities and other issues.
Finding a green or ethical banking option
Building Societies and Credit Unions
Mutual building societies and credit unions are generally smaller, customer-owned operations that primarily lend to individuals and so are less likely to have the same exposure to issues like the arms trade, for example.
Green and Ethical Alternatives
There are a number of banks and building societies with prominent green and ethical credentials.
- Co-operative Bank: this bank's robust green and ethical policies govern its current accounts, savings and investment products.
- Smile: this internet arm of the Co-operative Bank shares the parent company's ethical policy.
- Triodos Bank: this bank offers green and ethical savings accounts and investments. The bank was established in 1980 in the Netherlands and now has significant operations in the UK.
- Ecology Building Society: this mutual building society offers a range of green savings accounts and mortgage options.
- Charity Bank: this bank invests through loans to benefit charities and communities. It offers saving accounts and cash ISAs to consumers.
You can use the banking section search to find the banks that perform best against our green and ethical criteria.
Your next steps
What do you do now? Check out our guide Next Steps - Banking for information on how to give your bank account a green and ethical makeover.
Useful links to know
The Financial Conduct Authority (FCA) regulates the financial services industry in the UK. The FCA aims to protect consumers, ensure the industry remains stable and promote healthy competition between financial services providers. The FCA has a useful guide to your banking rights. Visit www.fca.org.uk or call the FCA consumer hotline 0800 111 6768 for more information on your rights and the FCA's work.
The Prudential Regulation Authority (PRA) www.bankofengland.co.uk is part of the Bank of England and is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and investment firms. It supervises financial institutions at the level of the individual firm.
The Financial Ombudsman Service www.financial-ombudsman.org.uk is a service set up by the UK Parliament to sort out individual complaints that consumers and financial businesses are not able to sort out themselves.
Banking Search
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Bank / Building Society Profile
Post Office Personal Banking
Green/Ethical Products
- The Post Office Bank offers the Post Office Card Account (POCA), which does not contain any overdraft or charges. No credit check is required to open an account, which allows individuals to take cash out and check their balance.
Ethical Lending or Insurance
No evidence found of the bank’s ethical insurance policy found.
Human Rights
No policy was found to indicate that Post Office Bank avoids lending to or insuring companies that directly contribute to human rights violations.
However, with regard to its Responsible Procurement Policy, Post Office Bank’s parent company, Royal Mail Group expects suppliers to:
- Adhere to the UN Universal Declaration of Human Rights and comply with the eight fundamental ILO Conventions
Financial Exclusion
The Post Office Bank offers the Post Office Card Account (POCA), which does not contain any overdraft or charges. No credit check is required to open an account, which allows individuals to take cash out and check their balance.
The Post Office has founded Go ON UK, which is committed to helping 16 million people in the UK who lack the skills or confidence to benefit from new digital services, participate in digital training sessions across the 11,780 branches. To help people who may not have access to, or know how to use, the internet, the Post Office is working with the government and community partners to ensure people can go to a Post Office branch to get the help they need to access these services in a safe and trusted environment.
No evidence that Post Office Bank provides direct financial support to or engages in partnerships with Credit Unions and CDFIs (Community Development Finance Institutions).
According to its 2012 Annual Report, the Post Office strives to be one of the most accessible organisations in the UK, ensuring that colleagues with disability needs are provided with all the support they need and disabled customers receive an excellent experience.
In 2012-13, the Post Office:
- launched the Post Office Disability Helpline to provide solutions and specialist equipment to employees with disability or accessibility issues;
- provided grants to agency branches to upgrade their outlets to make them more accessible; and
- created and met a panel of accessibility experts from disability organisations on a regular basis, whose role is to advise on the accessibility issues facing disabled people and our people.
The Post Office also states it has the largest free-to-use cash ATMs network in the UK (Post Office rural network), providing access to financial services for those in remote or deprived areas.
No evidence found of Post Office Bank’s involvement in any microfinance or microinsurance projects.
No evidence found that Post Office Bank invests in or lends at lower rates to financially excluded communities.
Environment
Post Office Limited’s environmental policy covers the key areas of climate change, energy efficiency, water use and waste management.
The bank appears to be committed to continued improvement of its environmental performance.
According to its 2012-2013 Annual Report, the Post Office states that it recognises its environmental responsibilities, and is committed to minimising its adverse environmental impact by means of a continuous improvement process.
Post Office Limited sets a number of yearly environmental goals for its building energy use, vehicle CO2 emissions, water use and waste recycling and measures its year end performance of these goals.
Carbon Neutral
No commitment to become fully carbon neutral was found.
Equal Opportunities
Post Office Limited’s diversity policy takes into consideration the key equality issues of race, gender and disability. See Annual Report.
Women on the Board
4/10 women hold top level board positions (40%)
Voluntary Standards & Initiatives
Post Office Limited is a member of or signatory to the following relevant charter or initiatives:
Business in the Community (BITC)
Charitable Giving
In 2012 , the branch network worked with BBC’s Children in
Need’s BearFaced initiative. According to the 2012-13 Annual Report, Post Office activities raised more than £1 million for the program.
Post Office Personal Banking
- Current Accounts
- Savings
- Credit Cards
- Insurance (Life, Motor, Home, Pet, Travel, Business)
- Mortgages
Post Office Personal Banking
Post Office Personal Banking
Post Office Limited
148 Old Street
London EC1V 9HQ
