Green Banking

When it comes to your money, do you let your principles rule your profits?

Ethical financial products have been around in various guises for many years, and recently they have been extended to include investments, bank accounts, insurance, pensions and mortgages whose management also carries environmental benefits. Other kinds of companies that handle your money, such as phone, TV and mobile suppliers, ISPs and retailers are also going greener. However, ethical (or socially responsible) investment, can be very confusing as there are so many different funds available that claim to be 'green'. In reality some of these funds are more environmentally friendly than others.

THE GREEN AND NOT SO GREEN

You can find out which UK or global companies have ethical policies by simply reading information readily found on their websites or company literature. Broadly speaking, a truly ethical company will be one that is not causing damage to the environment, exploiting its workforce by paying low wages, using child labour, or producing products which are harmful or dangerous. Two sets of criteria - one positive, one negative - identify ethical investments. Positive criteria include:

Specific environmental protection practices.
Pollution control.
Being involved in conservation and recycling measures.
Ethical employment practices.

Negative criteria include:

Environmentally damaging practices.
Animal exploitation and testing.
Involvement in supporting oppressive regimes.
Alcohol, tobacco, gambling and pornography.
Involvement in armaments and nuclear weapons manufacture.

Criteria like these are not necessarily failsafe, and certainly not tailor-made to your particular set of beliefs. For instance, you might be attracted to investing in a bio-technology company which is carrying out ground-breaking research into tuberculosis but is also involved in genetically-modified foods which you might shy away from. You have to decide how to prioritise your principles otherwise you may end up not investing in any companies at all!

As the World Trade Organisation begins to crack down on companies exploiting people, animals or the environment, companies who don't play the game may well receive negative press and lose customers, meaning they'll start to underperform. Well-run companies with strong ethical principles should be tomorrow's top performers, along with the many companies producing sustainable energy products. So, think long term when you're investing your money.

YOUR GREEN MONEY

Look out for service companies in any field who do any of the following.

Promote sustainable forms of transport.
Paper free billing and online statements.
Members of initiatives such as the UK 's 'We're in this together' campaign. Made up of big retailers and utility providers, the campaign aims to help every UK household cut their carbon emissions by one tonne over the next three years.
Tree planting schemes to help to offset CO2 emissions.
Mortgage deals based on how ecologically sound/energy efficient your home is.
Lenders who will make a payment every year, for as long as you hold your account/mortgage, to charities such as Climate Care, an organisation dedicated to tackling global warming.
Funds that are used to fi nance renewable energy schemes such as small hydroelectric projects and wind farms.
Credit cards that allow you to raise money for environmental causes every time you use your plastic.
Deals such as discounts and lower-rate borrowing when you buy certain green energy saving products or services, such as public transport tickets.
Credit and debit cards that can be recycled, or are made from recycled materials.


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