Choosing an ethical cash ISA
You may find financial products out there being promoted as ethical or green Cash ISAs because they exclude investments in tobacco, alcohol, pornography, fur, armaments, and some oil investments, rather than making a positive impact.
While its good that these things are excluded, such ISAs are often just one option offered by a provider that doesn’t maintain the same standards for all of its products.
The best ethical Cash ISAs, such as our Best Buys, are from providers who not only exclude the most dodgy and damaging investments, but also are very clear about what they do proactively invest in.
It’s no surprise that the Best Buys in this guide mirror those in our guide to savings accounts.
NB: The Ecology Cash ISA is not available for new applications with effect from 21 November 2022 so it was no longer included in this guide. See how Ecology scores in our Savings Accounts guide.
All host multiple positive stories on their websites about projects they have funded and initiatives they are involved in. In each case, the money held in savings accounts makes this work possible.
This is in contrast to some of the large high-street banking groups who have the advantage of appealing to their huge numbers of existing customers, and hold around two thirds of ISA accounts. Dig a bit deeper into what they do with their money and you may well want to avoid them or transfer to a more ethical provider.
Both of our Best Buys get a positive Company Ethos mark on our rankings table for offering an innovative alternative to the mainstream banking industry.
Both are members of the Global Alliance for Banking on Values (GABV), a not-for-profit independent network of banking leaders from around the world committed to advancing positive change in the banking sector, and also have ethical lending policies.
All of our Best Buys and Recommendations are protected by the FSCS (Financial Services Compensation Scheme), which means up to £85,000 (or £170,000 for joint accounts) held per firm would be repaid to the saver if a firm should fail. You should be aware that some banks or building societies are linked and therefore share one lot of £85,000 protection. You can check which ones are linked using this tool.
Mutuals / Building Society ISAs
Mutually owned entities, in the form of building societies, are also a good option for cash ISAs. They are seen as a more ethical option due to the fact they lend mainly in the housing market and don't invest in fossil fuels and other unethical sectors.
All the mutuals featured on the table pick up an additional mark in our scoring system for Company Ethos due to their more democratic structures. You can read more about mutuals and building societies in our guide to savings accounts.
Most banks do now have Corporate Social Responsibility (CSR) policies which give the impression that they are as concerned about some of these activities as you are.
However, looking at their lending and investments, as we have done for the ranking table, shows that in many cases these words are little more than hot air.
Some of the banks we rated were involved in financing some really damaging companies and projects, fuelling abuses at the intersection of animal rights, human rights and the environment.
Barclays, Lloyds, NatWest, Santander, and Banco de Sabadell (TSB), Virgin Money, HSBC and Royal Bank of Scotland were amongst those who lost marks for lending to particularly problematic sectors including arms, fossil fuels, deforestation and animal cruelty.
See our latest savings guide for more detail on who is funding what.