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
Yorkshire Bank
Green/Ethical Products
- ReadyCash Account (Basic Bank Account)
- Agribusiness Program for rural farmers and businesses
Ethical Lending or Insurance
Yorkshire Bank’s parent company, National Australia Bank, states that the group should avoid lending to certain industry sectors. For example:
- pornography, arms dealing and testing on animals
- non-government regulated gambling
The NAB website states that the group’s lending and investment policies and processes reflect its beliefs and behaviours, changing regulatory requirements, approach to risk management and commitment to meeting voluntary standards, such as the Equator Principles.
According to the parent company, National Australia Bank’s, website, credit and risk managers in corporate and business banking units oversee credit quality and provide on-the-job training to bankers so that they can properly apply the environmental risk policy. This system applies to Yorkshire Bank.
Furthermore, the group is required to screen general credit applications to see if the environmental credit policies should be applied. They are applied if the lending has the potential to involve environmental risks due to:
- the nature of the industry in which the borrower is involved;
- the location or nature of the property owned by the borrower; and
- any adverse comment made by a valuer in regard to an environmental risk.
Each of the businesses within the NAB Group are also required to develop and maintain an environmental risk assessment checklist to guide their bankers through the environmental credit risk assessment process. These checklists are updated as required to reflect changing regulatory requirements and regional operating contexts.
The environmental risk assessments include understanding:
- customers’ current operations;
- historical uses of a customers’ sites;
- customers’ environmental practices, management systems and compliance records;
- risk of liability transfer in regard to environmental issues;
- nature of any licences, permissions or consents held by a customer;
- outcomes of any previous site investigations, environmental surveys or audits; and
- community concerns in relation to the customer's operations
The assessment may also include expert third-party reports, environmental impact assessments, and site visits. This may result in the inclusion of covenants in lending contracts with annual reviews.
For projects in all other countries, the Group applies International Finance Corporation (IFC) and World Bank safeguard policies (as a minimum). It applies these policies, regardless of the monetary value of the project, if there are concerns that environmental habitats, Indigenous peoples and community rights may be at risk. Its internal standards require an environmental impact assessment for all projects financed by the group.
No evidence found of the company’s ethical lending policy in action.
Human Rights
No policy was found to indicate that Yorkshire Bank avoids lending to or insuring companies that directly contribute to human rights violations.
Financial Exclusion
The bank offers a basic bank account (Readycash) for low-income customers and credit card debt management for personal customers in financial difficulty
It also offers personal insurance for terminal/critical illness and disability.
No evidence that Yorkshire Bank provides direct financial support to or engages in partnerships with Credit Unions and CDFIs (Community Development Finance Institutions).
In 2008, NAB announced that it was providing Traditional Credit Union Limited (TCU) with interest free loans of up to $1 million (with no fees or charges) to fund the opening of branches in remote locations in the Northern Territory of Australia, providing access to financial services for more than 3,250 Indigenous customers, in the next five years.
However, no information has been provided since 2008.
According to its website, Yorkshire Bank provides:
- Talking ATMs
- Braille, large print or audio formats for statements, documents, and information packs
- Where possible, ATMs positioned for wheelchair accessibility
- An accessibility programme for continued branch access improvements
- Accessible website features
- Branches with ramps and/or wheelchair lifts where necessary, low level counters, counters with a hearing induction loop, and interview rooms accessible for wheelchair users
For more information, click here.
There is no evidence that Yorkshire Bank participates in microfinance.
Yorkshire Bank’s parent company, National Australia Bank, is partnered with Good Shepherd, State and Federal Governments and other community agencies, and has been developing microfinance solutions to help address financial exclusion and to help all financially disadvantaged Australians. National Australia Bank Microfinance helps low-income families buy basic household items such as refrigerators and avoid paying more than they should.
The National Australia Bank provides maintains the Microenterprise Loan program to support individuals who wish to start up or grow a business but who have limited access to capital. These unsecured loans of between $500 and $20,000 are provided on a not-for-profit basis and loan recipients get access to business skills training and advice during the first year of their business.
No evidence found that Yorkshire Bank invests in or lends at lower rates to financially excluded communities.
National Australia Bank provides the following loan programmes:
- No Interest Loan Scheme (NILS) offers small, no interest loans for people on low incomes for the purchase of essential household goods
- StepUp loan programme offers personal, unsecured loans for individuals or families to buy essential personal, household, or domestic goods at a basic interest rate of 3.99% p.a. Recipients are ‘mentored’ by a microfinance worker throughout the loan process and repayment period.
- AddsUp programme is a matched savings plan that focuses on helping people living on low incomes develop financial independence through savings. AddsUP is open to people who have successfully repaid their NILS or StepUP loan and once $500 is saved within a 6 to 12 month period, National Australia Bank will “once-off” match every dollar making that a total savings of $1000.
Click here for more information.
Environment
National Australia Bank Group Environmental Policy, which includes Yorkshire operations, covers the key areas of climate change, energy efficiency, water use and waste management.
According to the National Australia Bank Group’s Environmental Policy, the Group Environmental Committee is responsible for leading management in respect to the three pillars of the Group’s Environmental Agenda. This includes providing oversight in relation to environmental culture (engagement and awareness), integrated environmental governance processes and environmental strategy, risks and performance (which includes consideration of climate change, resource efficiency and natural value strategy, risks and opportunities).
The bank appears to be committed to continued improvement of its environmental performance.
The National Australia Bank Group, Yorkshire Bank’s parent company, is committed to:
- being a leading financier of renewable energy development;
- building capability in servicing carbon markets; and
- offering new financial products and services with environmental benefit to meet growing consumer demand.
Business opportunities, such as the provision of environmental products and services, are identified and prioritised through the strategic planning process both at the Group and business line level.
NAB Group’s commitment to managing the business's environmental footprint is guided by its Group Environmental Policy, which is part of its plan for long-term growth.
The Group Environmental Policy can be found here.
Carbon Neutral
The National Australian Group became carbon neutral in 2010.
Click here for more information.
Equal Opportunities
Yorkshire Bank’s parent company, National Australia Bank Group’s has an equal opportunities policy that takes into consideration the key equality issues of race, gender, age, sexual orientation and disability.
A list of NAB Goup’s diversity initiatives can be found here.
Some initiatives include:
Voluntary Standards & Initiatives
Yorkshire Bank abides by the 'The Lending Code', a voluntary code which sets the standard for good banking practice.
The National Australian Bank Group is a member of or signatory to the following relevant charter or initiatives:
- 2ºC Communiqué
- Natural Capital Declaration
- Australian Government’s FluoroCycle Scheme
- United Nations Global Compact
- Equator Principles
- Carbon Disclosure Project –Investor, Reporter Services and Supply Chain
- CDP Water Disclosure Project
- United Nations Environment Programme for Finance Initiative (UNEP FI)
- Water Stewardship Australia
- Sustainable Business Network NZ
- New Zealand Business Council for Sustainable Development
- Sustainable Business Australia
The National Australian Bank Group abides by the following:
- OECD Guidelines for Multi National Enterprises
- Universal Declaration of Human Rights
- The Australian Code of Banking Practice
Charitable Giving
In the last five years, Yorkshire Bank has raised over £2.5 million for its Charity Partner, Help the Hospices.
In addition, Yorkshire Bank has supported Count Me In 123, a numeracy programme for children age 5 and under.
The National Australia Bank Group works with the MLC Community Foundation, a charitable trust which was established in September 2008 with a mission to improve mental health outcomes for all Australians. The group has invested $4.5 million over the last five years in grants towards this cause.
Yorkshire Bank
- Current Accounts
- Savings
- Credit Cards
- Loans
- Mortgages
- Insurance (Home, Higher Value Home, Motor, Life, Over 50s Life, Critical Illness, Travel)
- Student Current Account
Yorkshire Bank
Yorkshire Bank
Yorkshire Bank
30 St. Vincent Place
Glasgow
G1 2HL
