How ethical is Lloyds Banking Group?
Our research highlights several ethical issues with Lloyds Banking Group, including its approach to climate change, tax conduct, lending policies, and loans and investments.
Below we outline some of these issues. To see the full detailed stories, and Lloyds Banking Group's overall ethical rating, please sign in or subscribe.
Fossil fuel lending
In 2022, Lloyds Banking Group was the first major UK bank to commit to ending direct financing of new fossil fuels, but according to the 2024 Banking on Climate Chaos report, it continued to provide $1.9bn in financing to the industry in 2023.
Lloyds Banking Group also featured on the conservation campaign group Global Canopy’s Forest 500 project, an annual assessment of the top companies and financial institutions with the greatest exposure to deforestation risk. This stated Lloyds Banking Group was among the top lenders to Forest 500 companies – businesses identified as having the greatest influence on tropical deforestation through their production or use of high-risk commodities, such as beef, soya and palm oil. Specifically, Global Canopy found no overarching commitment to halting deforestation from the company, stating: “In the 2022 selection, Lloyds Banking Group was providing $7.9bn to the Forest 500 companies.”
Environment and climate
Although Lloyds Banking Group is making some positive steps by measuring and publicly reporting its CO2 emissions, it has also been criticised for making misleading climate claims.
In December 2024, the UK advertising regulator, the Advertising Standards Authority, found that a poster and three paid-for LinkedIn posts for Lloyds misled businesses and the public. The adverts focused on its partnerships with nature-positive businesses and not-for-profits, and what it described as its commitment “to help accelerate the transition to a low carbon economy”. The ruling followed a complaint by campaign group Adfree Cities, which claimed that the bank had omitted significant information about its contribution to carbon dioxide and greenhouse gas emissions.
Financing of arms
According to the campaign coalition Don't Bank on the Bomb, Lloyds Banking Group financed nuclear weapons producers to the tune of $2.49bn in 2024, through loans and underwriting.
Ethical Consumer also found that Lloyds Banking Group’s ethical lending policy did not include an adequate policy excluding loans to the arms/military sector. It allowed financing for military equipment manufacturers involved in national defence programs of NATO countries, although it did exclude controversial munitions such as cluster munitions, landmines, and chemical and biological weapons.
Politics and finances
Lloyds Banking Group performed very poorly in our tax conduct and company ethos categories.
According to corporate database D&B Hoovers, the company owns subsidiaries in tax havens including Luxembourg and the Bahamas. In February 2025 the Financial Times reported that Lloyds Banking Group was ordered to pay HMRC £1 billion over tax relief claimed on the sale of its Halifax branches in the Republic of Ireland. At a tribunal, HMRC argued that the bank decided to exit the market in order to claim tax relief.
The bank’s company ethos also let it down with points lost over director pay and lobbying. In 2023, for example, the bank paid its highest-earning director £3.7 million, which Ethical Consumer considered to be excessive. The company was also found to be in two lobby groups considered problematic by Ethical Consumer - the International Chamber of Commerce and the World Economic Forum.
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See how Lloyds compares to other banks in our guide to current accounts.
The text above was written in March 2025, and most research was conducted in February 2025.