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
Santander
Green/Ethical Products
- Offers responsible and sustainable products in each of the countries it operates. Incorporates ethical, social and environmental aspects as well as financial.
- Financing of electric vehicles and low carbon emissions.
- Financing for environmental and renewable products.
This information is from the group website not the UK company website and may not be available in the UK.
Ethical Lending or Insurance
In the social and environmental assessment Grupo Santander, will take the following factors into account:
- Nature of the products and services offered to customers.
- Countries where Grupo Santander and its customers are present.
Grupo Santander will not accept the following customer categories:
- Companies that do not support or respect internationally recognised basic human rights, within their area of influence
- Companies that do not abide by labour standards, and in particular, those that imposes hard or forced labour on minors.
- Companies that refuse to provide requested documentation or information.
Grupo Santander will not lend money to or insure companies operating in the following areas:
- Agricultural or fishing activity in protected areas.
- Deforestation of protected or high conservation or extraction value forests, and sale of types of native woods that do not have an ecological certificate issued by a third party.
- Extraction of asbestos or manufacturing products that contain asbestos.
- Trading with protected animal species.
- Manufacturing or distributing nuclear arms, anti-personnel mines or cluster bombs.
Which transactions this policy covers is not clear from the group website.
The Bank also has a range of sectorial policies which sets out criteria for financial activities connected with: defence, water. Energy and forestry sectors.
For example the defence policy says that Banco Santander will not finance projects related to arms manufacturing, trade or distribution of anti-personnel mines, cluster bombs or nuclear, chemical or biological weapons. In line with this, the Bank asks clients who could be connected with this sector to sign a declaration of conformity with its defence sector policy.
The Risk Units are responsible for assessing the social and environmental risks of the projects submitted by the different Committees for their approval. These projects must be consistent with this policy and any other policies that maybe approved by the Group on a sector level.
Santander considers social and environmental aspects in the risk analysis and decision-making processes pivotal in their financing operations. The adherence to the Equator Principles has as first objective, prior to funding, to identify and prevent the project’s negative social and environmental impacts and in the event that the impacts are unavoidable, reduce, mitigate or adequately offset them.
Human Rights
Grupo Santander will not accept the following customer categories:
- Companies that do not support or respect internationally recognised basic human rights, within their area of influence.
- Companies that do not abide by labour standards, and in particular, those that imposes hard or forced labour on minors.
- Companies that refuse to provide requested documentation or information.
The Bank will periodically verify its application and assess the risk of non-compliance in the environments in which it operates.
Additionally, in the initial stages of project funding analysis, the Bank will take into consideration the impact on human rights, without prejudice the application of the rest of the criteria normally applied in the Bank's ordinary procedures for customer acceptance.
In due diligence procedures prior to entering into cooperation or any other kinds of agreements within the scope of the Equator Principles, Santander undertakes to evaluate, as part of its analysis process, the human rights policies and practices of its counterparties.
The Bank's Internal Auditing is responsible for verifying compliance with this Policy.
Financial Exclusion
Provides funding for the Money Advice Trust (MAT), operator of the National Debtline and Business Debtline. These services provide free, confidential and independent advice to consumers and small businesses on how to deal with debt problems.
Offers Basic Accounts for first time or those not confident in managing their money.
Launched an improved ‘Financial Difficulties’ website for providing advice to customers in financial difficulty. Developed a new Financial Difficulties Guide in association with Payplan to provide further advice and support for customers in financial difficulty.
Through their ‘Affordable Credit’ scheme they provide small loans at reasonable interest rates from credit unions and CDFI’s. Aimed at low income customers in the UK.
MK Credit Union has banked a £10,000 donation from the Santander Foundation to expand the services they offer to clients who are in financial difficulty.
Offers the following:
- Mobile Banking Scheme
- Youth Bank Accounts for under 18’s
- Offers Hearing loops fitted in branches
- Written correspondence in different formats (Braille, Large Print, and Audio).
- Text Relay
- Online and Telephone Banking.
- Sign Language Interpreters.
- Partnership with the Post Office to offer services through their branches.
Santander operates microcredit programmes in many Latin American countries including Brazil, Chile and El Salvador. Santander has over 250,000 entrepreneurs working with microfinance of over €300 million credited.
No evidence found that the company invests in or lends at lower rates to financially excluded communities.
Environment
Santander UK’s environmental policy covers the key areas of climate change, energy efficiency, water use and waste management.
Committed to setting objectives to achieve continues improvement. Regularly reporting on performance to stakeholders. Use of independent review.
Carbon Neutral
No commitment to become fully carbon neutral was found.
Equal Opportunities
Santander UK’s diversity policy takes into consideration the key equality issues of race, gender, sexuality, and disability.
Women on the Board
Santander UK:
2/12 women hold top level board positions (17%).
Parent Company:
3/17 women hold top level board positions (18%).
Voluntary Standards & Initiatives
Santander is a member of the following initiatives / standards:
- Business in the Community (a business-led charity focused on promoting responsible business practice) and its Opportunity Now and Race for Opportunity initiatives.
Santander UK is not a signatory on its own however its parent company the Santander Group is a member of or signatory to the following relevant charter or initiatives:
- The Equator Principles (guidelines from the International Finance Corporation).
- United Nations: Universal Declaration of Human Rights.
- UN Global Compact: United Nations Global Compact.
- UNEP Finance Initiative: Financial Initiative for the United Nations Environment Programms.
- EC Code of Conduct for European companies operating in developing countries.
- OECD Guidelines for multinational companies.
- ILO Tripartite Declaration on multinational companies and social policy.
- Kyoto Protocol on climate change.
Charitable Giving
Through Moneywise programme provided donations of £1 million to charities specialising in supporting financial education.
The Santander UK Foundation provides donations, and undertake volunteering and fundraising for projects that support disadvantaged people.
Santander UK Foundation and the Santander Universities programme provided £6,008,463 in support to the community sectors in 2009
Donated £28 million to UK charities since 1990 through the Foundation. In 2009, they made 1,500 donations, to both small local charities such as Scout Groups and large national charities such as Macmillan Cancer Care, totalling over £3.28 million of grants.
In the UK, community activities feature employee fundraising campaigns which provide support to local and national charities. In 2009 they launched their ‘Charity of the Year’ programme, raising £140,000 for Great Ormond Street Hospital and £210,000 for Help the Hospices. In 2010 they raised £380,000 for Cancer Research UK.
Santander
- Current Account
- Savings
- Investments
- Credit Cards
- Loans
- Mortgages
- Insurance
- Private Pension Fund
- Student Current Account
Santander
Santander UK Plc.
Registered Office:
2 Triton Square,
Regent's Place,
London,
NW1 3AN,
United Kingdom.
