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
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Smile
Green/Ethical Products
Smile is part of the Co-operative Bank. All Co-operative Bank products are covered by its customer-led Ethical Policy.
Products with a specific ethical or green element include:
- Smile sustainable funds.
Ethical Lending or Insurance
The Co-operative Bank has an ethical lending policy which applies across all its transactions with businesses seeking finance.
On applying for banking services with The Co-operative Bank, all business customers are required to complete an Ethical Policy questionnaire. The Co-operative Bank states that it will only offer a business banking facilities when it is confident that there are no conflicts with its Ethical Policy.
The ethical lending policy includes exclusion criteria in human rights; the arms trade; corporate responsibility and global trade; genetic modification; social enterprise; ecological impact, and animal welfare areas.
Since 2011 The Co-operative Bank's Ethical policy has been extended to cover the investments underpinning its home and motor insurance products. As a result it does not purchase bonds issued by organisations that do not meet the criteria of the policy.
The Co-operative bank has internal controls to monitor its lending policy as well as inviting an independent auditor to comment on the implementation of their policies and publish the findings.
The Bank states that since its launch in 1992, The Co-operative Bank has withheld over £1.2 billion of funding from business activities that its customers have said are unethical.
During 2012, 110 finance opportunities were referred to the Ethical Policy Unit in connection with international development and human rights, of which 17 were declined with an estimated cost of £2,659,000 gross income foregone.
Human Rights
The Co-operative Bank's ethical policy includes human rights criteria. It will not finance any organisation that advocates discrimination and incitement to hatred, or the manufacture or transfer of indiscriminate weapons, e.g. cluster bombs and depleted uranium munitions".
They will not finance any of the following:
- any government or business which fails to uphold basic human rights within its sphere of influence;
- any business whose links to an oppressive regime are a continuing cause for concern;
- any organisation that advocates discrimination and incitement to hatred;
- the manufacture or transfer of armaments to oppressive regimes;
- the manufacture or transfer of indiscriminate weapons, eg cluster bombs and depleted uranium munitions;
- the manufacture or transfer of torture equipment or other equipment that is used in the violation of human rights.
Since 1992, they have declined £385m finance to businesses in line with their Ethical Policy statements on international development and human rights. During 2012, 110 finance opportunities (2011:159) were referred to the Ethical Policy Unit in connection with international development and human rights, of which 17 were declined (2011: 13), with an estimated cost of £2,659,000 in terms of gross income foregone.
Financial Exclusion
No evidence of any accounts, products, or services aimed specifically at the financially excluded.
Although The Co-operative Bank, of which smile is a division, offers a range of products and services for the financially excluded.
- In 2012, 38% of the bank's branches were located in deprived areas.
- The bank also reports that finance to small businesses in deprived areas as a proportion of equivalent bank activity remains significantly above the industry average in 2012.
- The bank provides basic bank accounts to prisoners ready for use on release. 13,380 bank accounts for prisoners opened since 2009.
- The Co-operative Bank offers a basic bank account, Cashminder, aimed at those who may not be eligible for a standard current account.
No evidence for Smile however The Co-operative Bank, of which smile is a division, has the following:
Credit Union Current Account launched in 2006 in partnership with the Association of British Credit Unions Ltd (ABCUL). In 2012, 25 credit unions were offered the account and over 36,500 (2011: 33,281) customers benefited.
In line with the Bank’s Ethical Policy commitment to support credit unions, a three-year strategy was developed and agreed in 2012. Principles are to provide credit unions and their members with: an accessible, Co-operative banking package; access to a range of Group products and services; and assistance and advice.
Smile's website is ranked as meeting A-level in relation to their level of accessibility according to the Web Accessibility Initiative’s (WAI) Web Content Accessibility guidelines (where AAA is the most accessible).
No other evidence for Smile however The Co-operative Bank has the following:
The company provides the following:
- Mobile and Internet Banking.
- Templates to help customers complete cheques and paying in slips.
- Hearing induction loops in our branches to assist the hearing impaired.
- A textphone, which can be accessed by making a call through TextDirect, dialling prefix 18001 before the telephone number you want.
- Correspondence, statements, PIN advice and brochures available in large print, braille and audio formats.
- Chip and signature cards for customers who are unable to use a keypad or have difficulty remembering numbers.
- Card readers with a larger keypad and audio format for use with internet banking.
- Facsimile signature stamps for customers who have difficultly reproducing a consistent signature.
In 2007, The Co-operative Bank introduced a £25m microfinance fund to support the development of small businesses in some of the world’s poorest countries. To date, they have lent to four microfinance schemes and supported microfinance institutions in 28 countries. In 2012, they agreed a new investment of $5m in a fund supporting microfinance institutions and social enterprises in Latin America, Eastern Europe and Asia.
No evidence found that the company invests in or lends at lower rates to financially excluded communities.
Environment
Co-operative banking Group’s environmental policy covers the key areas of climate change/energy efficiency, water use and waste management.
The environmental policy also contains a commitment to continued improvement in environmental performance.
Carbon Neutral
In 2012 The Co-operative Banking Group, of which smile is a division, maintained its policy of going ‘beyond carbon neutral’ for the sixth consecutive year by offsetting its emissions plus an extra 10% of emissions to cover legacy issues (8% of total carbon offset).
Equal Opportunities
The bank’s diversity policy takes into consideration the key equality issues of race, gender, sexuality, and disability.
Women on the Board
The Co-operative Banking Group:
2/12 women hold top level board positions (17%).
Voluntary Standards & Initiatives
Smile is not a member / signatory by itself of any relevant initiatives, but its parent company the Co-operative Banking Group is a member of or signatory to the following relevant charter or initiatives:
- Opportunity Now and Race for Opportunity (The Co-operative Group)
- UKSIF (Co-operative Banking Group)
- The London Benchmarking Group (Co-operative Banking Group)
- Employer's Forum on Equality and Inclusion (Co-operative Group)
- Employers' Forum on Disability (Co-operative Group)
- Extractive Industries Transparency Initiative (Co-operative Insurance UK)
- ClimateWise (Co-operative Insurance)
- Carbon Disclosure Project Water Disclosure (Co-operative Financial Services)
Charitable Giving
The Co-operative Foundation is an independent charitable trust set up in 2000. The Foundation's current grant-making programme, Truth about Youth, aims to challenge and change negative perceptions about young people, by working with seven charities in cities around the UK. Has committed a total of £5 million since 2009.
Community Initiatives including Skills4Schools, Reading partners, StreetGames Young Volunteers, Offenders’ art exhibitions (invested £82,000), Supporting the homeless (donated £89,000).
Smile
- Current Accounts
- Savings
- Credit Cards
- Loans
- Mortgages
- Investments (through Co-operative Investments)
- Insurance (Car, Home, Pet, Life, Health, Business – through The Co-operative insurance).
- Student Current Account
Smile
smile (smile is a trading name of The Co-operative Bank and part of The Co-operative Group)
The Co-operative Bank plc.
P.O. Box 101,
1 Balloon Street,
Manchester
M60 4EP.
