Business Banking


Ethical buying guide to Business Bank Accounts, from Ethical Consumer

Ethical buying guide to Business Bank Accounts, from Ethical Consumer


This is a product guide from Ethical Consumer, the UK's leading alternative consumer organisation. Since 1989 we've been researching and recording the social and environmental records of companies, and making the results available to you in a simple format.

A guide to carbon divestment for small businesses, social enterprises and charities. 
 
 

This guide includes:

  • Ethical and environmental ratings of 27 banks
  • Best buy recommendations
  • Which companies are banking on climate change?
  • Meet the super-ethicals

 

This product guide is part of the special report: Ethical Money

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Score Ratings

Our ratings are live updated scores from our primary research database. They are based on primary and secondary research across 23 categories - 17 negative categories and 6 positive ones (Company Ethos and Product Sustainability). Find out more about our ethical ratings

 

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The score table shows simple numerical ratings out of 20 for each product. The higher the score, the more ethical the company.

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The Full Scorecard shows the 'black marks' for each product, by each of the 17 negative categories. The bigger the mark, the worse the score. So for example a big black circle under 'Worker Rights' shows that the company making this product has been severely criticised for worker abuses.

Scores start at 14.  A small circle means that half a mark is deducted, a large circle means that a full mark is deducted.

Marks are added in the positive categories of Company Ethos and the five Product Sustainability columns (O,F,E,S,A).  A small circle  means that half a mark is added, a large circle means that a full mark is added.

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Best Buys

as of July/August 2016


As our ratings are constantly updated, it is possible that company ratings on the score table may have changed since this report was written.

 

Best buys for small business and charity current accounts are the specialist ethical providers: CAF Bank, Triodos and Unity Trust. 

 

 

Last updated: July 2016

 

 

 

Banking on Climate Change

 

 

A significant amount of finance for new fossil fuel extraction comes from our own banking sector, and campaigners around the world are beginning to measure and compare involvement and to name and shame the worst offenders.
 

Image: Protest against Banks in ethical shopping guide 

 

 

The five biggest players


The top five banking groups – HSBC, Lloyds, Barclays, RBS and Santander – control 89% of small business accounts.[1]

As we say in our current accounts guide these ‘big five’ banks have been criticised by civil society over a range of issues including investment in fossil fuels, tax avoidance, excessive directors’ pay, and for lending to nuclear weapons companies. 

 


 

 

 

Are there ethical alternatives?

 

The good news is that there are three ‘super-ethical’ choices for current accounts in this sector not available to individual consumers. They are:

 

  • CAF Bank – specially for charities and not-for-profits.
  • Triodos – for charities or businesses with a social purpose.
  • Unity Trust – for social enterprises, co-operatives and trade unions.

 

It may help to know, when choosing between them, that the CAF Bank is more focused on charities, Triodos on environmentally sustainable projects, and Unity Trust on social enterprise, but each crosses over into all these areas to some degree. Although Triodos is the only one to have a formal no-carbon policy, all three, because of their business models, will be effectively carbon divested.

The Charities Aid Foundation also offers investment products to charities via third-party ‘partners’.  Disappointingly, not all of these are via ethically-screened funds.  However CAF Bank’s own lending remains exclusively to charities and individuals.

 


 

 

 

What about The Co-op Bank?

 

Of the other, more mid-table choices, The Co-operative Bank is the main stand-out option. As the only company with a highly developed ethical policy, formally ruling out investing in a whole range of areas from fossil fuels to factory farming, you definitely know where your money is going. Its well publicised tricky patch seems to be behind it and it now even has a ‘Customer Union for Ethical Banking’ to keep it on track. More info >

 

Also worth considering are the two mutual building societies, Norwich and Peterborough or Cumberland, which, because of their business models, only invest in residential and other property and will also be effectively divested from carbon.

 

 

 

 

Company behind the brand

 

The Clydesdale Bank and Yorkshire Bank lost marks for the activities of their parent company National Australia Bank (NAB), which is 17.96% owned by a subsidiary of HSBC, and 12.3% owned by JP Morgan, the second biggest financier of fossil fuels according to the ‘Undermining our Future’ report.

Both shareholders caused NAB to lose marks for likely tax avoidance, investments in nuclear weapons, and membership of several free trade lobby groups.

 

 Want to know more?

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References:

1. Mintel - Small Business Banking - UK - June 2015

 


 

This product guide is part of the special report into ethical money. See what else is in the report.


 

 


 

 

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