Ethical Business Banking

Choosing an ethical business bank account

Most banks use your money to make investments. Many banks invest in fossil fuels, weapons or other unethical practices which might contradict your own company ethos such as animal exploitation. 

But there are other providers that won't invest in these areas and which may be a better fit for your values and will be less of a reputational risk. There are also big problems with excessive director pay in banks. With increasing awareness of banks' unethical practices and the problems of wealth inequality, who charities and businesses bank with may be more of a consideration to your customers than it used to be.

Our ethical rankings for business bank accounts in the score table above include several that are solid ethical choices, many that have issues, and quite a few banks that should definitely be avoided. 

With scores ranging from almost no points out of 100 to almost full marks, moving your business or charity account to a more ethical provider is a quick way to have an immediate ethical impact.

Making an ethical impact with your business banking

We reveal which banks are the most ethical providers of current accounts for small businesses, charities and not-for-profit organisations.

• The score table above compares providers of business current accounts.
• Many banks listed both here and in our consumer savings accounts guide also offer business savings accounts.
• Most banks and one major building society provide business current accounts, and these tend to come with monthly fees and transaction charges.
• Some banks also offer special accounts for charities and not-for-profit community organisations, and you can find details of those below.

High street business banking

The four biggest banks remain dominant in the provision of business accounts in the UK, with Barclays, HSBC, Lloyds and NatWest controlling 85% of UK business accounts.

This is hardly surprising: switching is rare, physical branches are still important for financial advice, and many business directors prefer the ease of using the same bank for business as they do for personal finances.

However, the mainstream banks score very badly in our ratings. Unethical financial practices are most definitely the norm, with excessive directors’ pay and tax avoidance still rife. Furthermore, the big banks get marked down because of their investment practices. Far too many banks lend money to unethical corporations and a lack of transparency doesn’t help them take positive steps forward.

Barclays and HSBC stand out, but for the wrong reasons: they are two of the world’s leading providers of fossil fuel finance. 

Ethical alternatives for business banking

There are many actively ethical banks, as well as mutually owned building societies. Charities and businesses are therefore not limited to the 'big four' banks, and can show customers and supporters that their banking choice is another element of their ethical ethos.

CAF Bank (Charities Aid Foundation) is a charitable organisation, providing services exclusively to not-for-profits. 

Charity Bank reinvests savers’ deposits into loans that support positive social change, funding initiatives such as affordable housing, community centres, and environmental conservation projects. 

The Co-operative Bank with its strong, wide-ranging and customer-led ethical policy.  It has also been bought by the Coventry Building Society at the start of 2025, returning it to co-operative ownership after more than 10 years of being owned by US hedge-funds and other investors. 

Cumberland Building Society, now the only major building society to offer business current accounts, keeps its business practices simple by sticking to mortgage lending. Plus, it is mutually owned which helps to avoid the pressures of profit-hungry shareholders. It offers business current accounts to customers living in Cumbria, South West Scotland, West Northumberland and North Lancashire.

Reliance Bank is owned by the Salvation Army Trust, and specialises in lending to organisations that provide health and social care, affordable housing projects, and treatment centres that help people affected by gambling-related harm.

Triodos Bank  has strong environmental reporting and ethical policies, however it only offers saving accounts not current accounts for businesses. 

Unity Trust Bank performs well and has a clear and well-established commitment to providing banking services that have a positive social impact. 

The building society Nationwide took over Virgin Money in October 2024. These changes will hopefully prove that it's also possible for mutuals to service and lend to businesses in a more ethical way than mainstream banks have done so far. There is some work to do in clarifying their values in this new combination, but we are optimistic. 

Digital business banking

There has been a rise of app-based banking services for businesses, which appear to be a more ethical choice than the more established names due to having less involvement in damaging investments. However, it is not certain whether this will remain the case.

They generally sit around the middle of the score table. We hope that they will develop more robust ethical policies as they grow larger.

When is a bank not a bank?

Tide is not a bank in itself, but its accounts are provided by ClearBank, therefore all savings and deposits are covered under the Financial Services Compensation Scheme.

While Starling and Monzo became regulated banks in the UK almost 10 years ago, Revolut is still transitioning, so currently, your money is not protected in the same way as with a bank protected by the FSCS. Should Revolut fail though, there are still significant protections in place. 

We recommend that readers considering Revolut examine their website for more on this issue and read their page specifically on how they keep your money safe.

Banking for charities and community groups

The brands ranked on the score table all provide current accounts for small business, but the offering for community groups and voluntary societies is much slimmer. 

The banks that do have accounts for non-profit organisations tend to come with the stipulation of being a registered charity.

Whilst the ‘challenger’ app-based banks listed above tailor their products towards making life easy for micro-businesses, they are still only for sole traders or registered companies. 

Which banks offer what for small businesses, charities and community organisations?

De-risking and the impact on charity banking

In 2018, we reported on the issue of ‘de-risking’, a process whereby banks, in a bid to comply with new international regulations against money laundering, freeze or cancel bank accounts that seem risky.

Unfortunately, many humanitarian charities rely on transferring funds to high-risk locations to carry out their work. This can raise red flags for cautious account providers – banks such as Co-op and HSBC faced criticism, in 2015 and 2017, respectively, for closing the accounts of NGOs with little warning.

Since this time, there has been less reporting of de-risking which suggests banks are applying greater care and thought before they freeze an organisation’s account. However, it is often unclear whether any concrete action has taken place.

In a 2019 report from the House of Commons Treasury Committee, Stephen Jones from UK Finance highlighted the need for better communication from banks, stating “In terms of access to banking, it is very important that, if someone is de-banked, they understand why they have been de-banked, why the institution has de-risked, and we are working with the FCA on better communications around that.”

The 2018 Sanctions and Anti-Money Laundering Bill, which came into force when the UK left the EU listed general exemptions and licenses for NGOs carrying out humanitarian work in sanctioned countries. This was received as a positive step by some charity bodies. However, whether this will represent a major break from current de-risking practice remains to be seen.

Do ethical banks use unethical clearing banks?

Some of the smaller, more ethical banks in our guides may use larger banks to access the banking system. This is often referred to as the 'clearing bank' and was particularly prevalent for clearing cheques.

There is growing awareness of the ethics of banks, and customers are increasingly concerned that their attempts to avoid the 'big four' banks (Barlcays, HSBC Group, Lloyds Group, NatWest Group) are thwarted by the smaller banks and building societies using some of these big banks as their clearing bank.

We explore this in more detail, and list who uses which bank for clearing, within the savings guide.