I want to divest from fossil fuel banks – what are my options?
November 26, 2014
Fossil fuel funding is a blight on our planet, with climate change causing significant social and environmental problems across the world. It’s also quickly becoming financially irresponsible, with mounting evidence suggesting that not only are fossil fuels not as profitable as renewables, but also that they could in fact be worthless if we are to save our world from climate crisis.
But with the big 5 banks all deeply invested in fossil fuel funding, it’s important to know where you can move your money to avoid funding global warming. As a result, Move Your Money has contacted all the recommended institutions on our “Good Money” section, and here profile the ones that are best on fossil fuel funding:
As a building society, Nationwide does not invest its customers’ money in fossil fuel extraction, with the majority of its assets going into property and customer loans, rather than lending to businesses. “Nationwide does not have investments in tobacco, arms, alcohol, gambling – or coal, oil & gas,” explains Michelle Slade, Media Relations Manager for Nationwide.
This is actually the case for the vast majority of building societies, including our Magnificent Seven building societies who all scored 98% on our scorecard. As explained by Victoria Bamber of the Building Societies Association:
“Most building societies do not partake in business lending at all. Building Societies are restricted to who they can lend to, and because they do not have external shareholder pressure they are less likely to seek short-term profit and do tend to have a risk-averse attitude to business.”
One such building society is Ecology, who specialise in lending to environmentally sustainable building projects.
“Our lending is driven by sustainability,” said Anna Laycock, Ethics and External Affairs Manager. “Ecology is a building society dedicated to improving the environment by supporting and promoting ecological building practices and sustainable communities. In short, we’re dedicated to building a greener society.”
Similarly, Credit Unions are mutual organisations that exist to serve the needs of their members based around a common bond or local area. Whilst “social and environmental considerations depend upon the credit union,” according to Matt Bland, Policy and Communications Officer of the Association of British Credit Unions, “where they do lend to businesses it would tend to be SMEs or sole traders” – not international energy companies.
Triodos Bank describes itself as the “world leader in sustainable banking,” and it’s easy to see why. Triodos not only refuses to lend to fossil fuel companies, but also actively invests in the renewable industry and is completely transparent about what it does with its customers’ money. As if that wasn’t good enough, Triodos itself is 100% carbon neutral, and uses a variety of offsetting and energy saving techniques. “At Triodos Bank, we believe that profit doesn’t need to be at the expense of the world’s most pressing environmental problems” explains Will Ferguson, Communications Officer at Triodos.
The Cooperative Bank recently enshrined its ethical lending policy into its constitution, cementing the banks ethical credentials for the foreseeable future. One commitment included in that policy is that The Cooperative Bank “will not finance any business whose core activity contributes to global climate change, via the extraction or production of fossil fuels (oil, coal and gas).” As such, The Cooperative Bank looks a safe bet for a fossil free current account.
Finally, Charity Bank only lend to “charities, community organisations and social enterprises that are under-served by other lenders.” As a result, their customers’ savings are never used to invest directly in fossil fuel extraction.
Of course, the other side to the divestment coin is reinvestment – where that moved money gets put. And for positive investment into renewable energy, you can do a lot worse than to look at crowdfunding platforms, some of which – such as Abundance and Trillion Fund – are specifically set up to direct funding into the renewable sector. Others, such as Ethex place you in control of what ethical projects you want to fund – meaning that you’d be hard pushed to find any fossil fuel projects in their investment options.
In short, there are plenty of options if you want to move your money out of fossil fuel funding and into the alternatives. Whether it’s a fossil fuel free current account, sustainable savings, or positive reinvestment into renewables, there’s a wealth of options at your finger tips – so put your bank on notice now, and help build the sustainable future we all need.