Student Finance Overview
If you buy Fairtrade goods, believe in human rights, or are concerned about climate change -
- put your money where your mouth is and open an ethical bank account too.
Financial institutions make all sorts of offers to get students through their doors, from discounts to vouchers to bags of freebies. But these short-term gestures can mask long-term issues.
How would you feel if your money was being used to prop up oppressive regimes, test cosmetics on animals or damage the environment?
What are the issues?
Before you open a new student bank account, or if you want to find out about your current bank’s green and ethical credentials, you should consider the following:
Lending
Banks don't just lend money to current account-holding customers, they also lend to large corporations, public institutions and even governments. Would you approve if your bank was lending money to a company with a poor track record on human rights or one manufacturing arms for use in war zones?
Climate Change and Environment
Financial institutions 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 or insurance provider 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?
Equal Opportunities
A lot of people believe that equal opportunity in the work place is now the norm, but there is still a massive pay gap between men and women doing the same jobs across most industries, including finance. Also the number of women in high level positions is still significantly lower. Not only that but some companies’ equal opportunities policies don’t take other key issues like sexuality and disability into consideration.
Financial Exclusion
There are an estimated two million adults 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.
Responsible Credit
Does your bank, credit card provider or insurance company take care to appropriately target and market its products? Does it offer assistance to customers in financial difficulty? Some credit card providers may not treat their customers responsibly – issuing cards to people who’ll struggle to make their repayments and not offering help to those who do fall behind.
What are the ethical options?
There are a few banks, building societies and insurance companies with well-recognised green and ethical credentials. The examples listed below for banking and saving also scored the highest marks on ethical lending in our research:
Banking
- The Co-operative Bank: this institution provides student banking, insurance and credit cards facilities and has an ethical lending policy that extends across all its business operations.
- Smile: this internet arm of the Co-operative Bank and also offers student accounts.
Saving
- Triodos: this bank offers green and ethical savings accounts. Its commercial lending is primary to green businesses.
- Ecology: this mutual building society offers a range of green savings accounts and mortgage options and its commercial lending is mainly to small, green businesses.
Insurance
- Co-operative Insurance
Insurance type: home, motor, life and health
This company offers a wide range of insurance products and has an extensive ethical engagement policy governing who it will provide cover to. - Climate Sure
Insurance type: travel
Climate Sure calculates the CO2 produced by flying overseas and pays for it to be 'offset' by funding sustainable energy projects. - Green Insurance Company
Insurance type: motor
This provider aims to offset your car's carbon emissions and offers discounts on greener cars/lower mileage. - Naturesave
Insurance types: home, travel, personal accident and illness insurance
This company puts 10% of its personal insurance premiums in a fund (Naturesave Trust) to benefit environmental and conservation projects. It also offers a free environmental performance review for commercial clients and aims to use suppliers that support sustainable business practices.
Credit Cards
Before signing up to a card you should check out the ethical credentials of its provider. Visit our credit card section for more information.
Your next steps
See our Next Steps Guide - Student Finance for information on finding the best green and ethical service provider for you, how to switch accounts and how contact your bank or insurance company about their policies.
Student Finance Search
American Express
Green/Ethical Products
- None – charity affinity cards are not considered to be green or ethical products
Ethical Lending or Insurance
As the company is a credit card provider it does not lend money in a way that would necessarily require an ethical lending policy. Responsible lending to customers, however, is a key issue.
Responsible Lending
1. Credit Lending
American Express UK does not indicate if it runs credit checks on potential customers.
However, the online application for all credit cards includes the following provisos:
- Applicants must be aged 18 or over
- Have a current UK bank or building society account
- Have an Annual Household Income of £40,000
- Have a permanent UK home address
- Have no County Court Judgements for non-payment of debt
- Have been trading for over one year if self-employed
The company states that it informs customers of any unrequested increases in their credit limits.
2. Debt Warning
The company outlines various penalties arising from payment default in its card products’ Terms and Conditions. These include fees for non-payment of minimum balance within 25 days, rejected payments (including possible solicitors fees) and ‘overlimit’ charges.
Customers are not referred to the FSA Debt Test or an equivalent test. This test is designed to help customers find out whether you have, or are likely to have, problems with borrowing. It also has tips on what to do if customers find themselves in difficulties.
3. Debt Management and Advice
No policies were found publicly on handling customers who have defaulted on their payments or fallen into financial difficulty. Also, no reference to the possibility of taking payment holidays was found.
However, American Express states that if customers report difficulty making payments, the company may look at ways of assisting them on a case by case basis.
Financial Exclusion
American Express provide statements and other documentation in Braille and in audio formats.
In the US, the company has provided financial literacy training to teens for whom English is their second language, as well as disabled adults to help them open current or savings accounts.
Examples of American Express’s work with small business includes:
- The bundesweite grunderinnenagentur in Germany (National Agency for women start-ups and entrepreneurs) which partners entrepreneurs or successful businesspeople with women who have ideas for small businesses but are unemployed, on welfare or entering the workforce for the first time
- A microfinance program to assist women in Sydney, Melbourne and Brisbane in Australia with loans to get their businesses off the ground
- The American Express-Endeavor Argentina Leadership Development Program supporting entrepreneurs
Environment
The company’s environment policy addresses the key issues of energy efficiency and waste disposal as well as showing a commitment to future improvement of its environmental performance.
Carbon Neutral
American Express is committed to reducing the carbon footprint of its business operations by 10% by 2012.
Equal Opportunities
The company’s equal opportunities policy addresses the key issues of gender, race, disability and sexuality.
Women on the Board
American Express reported that 14.3% of board members were women (2007 figures).
Voluntary Standards & Initiatives
No green/ethical standards and initiatives were found that are relevant to American Express’s overall operations.
Charitable Giving
American Express donated 0.55% of its pre-tax profits in 2006. No data found for 2008/09.
American Express
- Credit Cards
American Express
American Express Services Europe Limited
Customer Services
Edward Street
Brighton
East Sussex
BN88 1AH
