How To Be A Green Saver
When you entrust your savings to a bank that pays a good rate of interest, what does it actually do with your money? And would you approve of it?
A group called mymothertree.com assesses how green banks are by examining their annual reports and statements to add up their global emissions – not just by their business but by the businesses they finance. It also looks at how they contribute (or not) to biodiversity, clean water and poverty.
The result is a league table that has some smaller firms like Nationwide Building Society, Cooperative Bank and Triodos clad in green, with large ones like HSBC, Barclays, First Direct and Chase bunched at the red end. Some smaller banks that are not listed may also be green. Nationwide is the only building society listed (because of its size) but all of them are owned by their members and most – including Ecology Building Society – can be considered green.
Anna Bowes, founder of savings comparison website savingschampion.co.uk has analysed the rates paid by banks that could be called ethical or green for Radio Times. “There’s more choice and you no longer need to give up all your interest,” she says. “But you do need to check that your beliefs align with the account or provider.”
Overall, the smallest differential between “best rates” and “green” is with Gatehouse Bank, whose products are generally less than half of one percentage point below the best-buys in terms of interest paid. So putting £10,000 there will cost you less than £50 lost interest compared with the best-buys.
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Gatehouse is one of several banks that follow the Islamic principles of Shariah law: interest is banned, so it pays savers a share of its profits expressed as a percentage of the money deposited. You won’t find Shariah-compliant banks funding doorstep lenders, alcohol, gambling, armaments or pornography. But the rules do not specifically exclude investing in oil and gas industries, so they may not be green or sustainable in that sense.
The analysis shows that saving for the planet does mean some compromise between the highest returns and the greenness of your chosen savings bank. But you just might help prevent further environmental damage.