Financial Institutions Glossary

Search Terms

Green/Ethical Products

Examples of green or ethical products include green mortgages, motor or travel insurance policies, or an ethical child trust fund. We also count Basic Bank Accounts as ethical products as they help give financially excluded individuals access to mainstream banking.

Ethical Lending or Insurance

Typically ‘unethical’ areas refer to areas like weapons manufacturing, companies with poor environmental records or those with operations in countries with poor human rights records.

Responsible Lending

Responsible lending is about running careful checks on potential borrowers before issuing any credit and ensuring that the amount of credit given reflects their ability to pay, whether that’s a mortgage, a personal loan, a credit card or an overdraft extension. It’s also about giving customers sufficient information and warnings about the dangers of borrowing and debt and offering them assistance if they cannot make their repayments.

Financial Exclusion

The financially excluded are those on lower incomes, the unemployed, those with a poor credit rating or anyone otherwise ‘excluded’ from the financial world, perhaps because of age or disability. Some financial institutions might offer products that are suitable for members of this group such as no-frills bank accounts or affordable contents insurance. They might also make access provisions for elderly or disabled customers, those living in remote areas, or those for who English is not their first language. Other ways financial institutions can help excluded groups include investing in community projects or funding financial education projects or lending at lower rates to poor/financially excluded communities. Microfinance is another way of helping excluded individuals and communities, usually in developing countries.

Environment

This search criterion also considers whether a financial institution has a management system in place to ensure that its environment policy is enforced. Energy efficiency and waste management are identified as the two most important elements of business’s environment policies in our research and procurement is key to both of these areas too.

Carbon Neutral

Many institutions that are ‘carbon neutral’ offset their carbon emissions, that is, they give financial support to projects that reduce general emissions of greenhouse gases. The most common types are renewable energy projects, such as wind farms. Additionally many carbon neutral businesses will carefully monitor and manage their carbon emissions and strive for greater energy efficiency across their operations.

Equal Opportunities

While there are a great and increasing number of issues that can feature in equal opportunities policies our research focuses on the four most common core areas of race, gender, sexuality and disability. It is important to note, however, that the quality of a particular institution’s policy is not taken into consideration nor how such a policy is implemented.

Women on the Board

Women are often absent from high level executive and board positions across the finance sector. Unfortunately there is no benchmark against which we can rate the percentage of women in senior positions as good or bad, so this area is not searchable.