Green Finance, UK News

Ethical Finance - A Green Future For Money?

In the current climate of fear in the financial sector, there is one area that isn't doing too badly.  In fact it's doing quite well, and for good reason- ethical finance is finally finding its feet. With the level of mistrust surrounding banks growing by the day, ethical banking seems an almost self contradictory statement but institutions like The Co-operative are showing the way for the future.  It isn't really that surprising that people are leaning towards such places now. The financial sector has mislead and unfairly profited from its customers for far too long. How does it work? The way financial institutions like banks and insurance companies make money is by taking their customers' money and lending it to companies at higher interest rates of interest. This means that customers rarely know where or how exactly their money is being used. Ethical banks and insurance companies believe that this is wrong. For the Co-operative Bank it all began in 1992, when they released their pioneering ethical statement. This laid out their intention to not fund any unethical companies- for example those in the arms trade, those with poor ecological records, or companies who worked alongside oppressive regimes. With such clear intentions and 'transparent' balance sheets, ethical financial institutions are becoming a very attractive prospect to those who have grown disillusioned with the current banking system. Other banks are benefitting as well- Bristol based Triodos Bank recorded huge increases in profit and amounts of money customers are depositing, unheard of in this current climate. Ethical insurance is a little way behind banking, but again The Co-operative are leading the way. In 2005, they became the first insurance company to launch a customer-led ethical policy to guide the ethical performance of its investments. Being major shareholders in large companies give Co-operative Insurance the opportunity to change them from the inside, a very rare position to be in. Other companies such as Naturesave Policies Ltd are also increasing in prominence. Some people may be put off by the fact that ethical finance will not be as rewarding as banking with the major banks, but the bug is catching on, with companies like Legal & General offering ethical trusts.  Also more and more insurance companies offer green schemes, especially with motor insurance. As always though, study your policy thoroughly, as some try to sound greener than they are. For those who are looking for ethical home insurance, Co-operative Insurance offer good cover- you'll get a 1/3 off your contents premium if you buy buildings and contents insurance together and if you buy online you'll get a further 15% discount off your premium. Glasgow News : back to index Edinburgh Houses Glasgow Houses