In Search of Financial Goodness – The Rise of Ethical Banking
August 31, 2012
August 31, 2012
Many may consider the concept of “ethical banking” an oxymoron. Especially taking into account the banking crises that have been plaguing the world of late – the idea of using the words “ethics” and “bank” in the same sentence may be, at least to those wary of the financial industry, a contradiction in terms. However the call for institutions that are more concerned with their social and environmental impacts is on the rise.
As many are aware, there is a societal movement toward accountability and global impact. For example, the food industry has comprehensive codes and regulations for labels like “fair trade” and “organic” so consumers can be better informed about a company’s practices and products. Ethical banking is not yet so developed because “ethical” is a relatively subjective term. However, pressure is building for the financial sector to become more responsible.
Though there really is no set definition of an ethical bank, most that claim the label focus on transparency and more benevolent social and environmental aims of projects they finance. The movement appears to be especially potent in the United Kingdom . For example, The Cooperative is a UK-based bank that launched a comprehensive ethical policy 10 years ago detailing the companies it won’t invest or finance. They empower their customers, allowing them to “have your say on the issues that matter to you, such as human rights, animal welfare, fair trade and the environment.” And The Cooperative just tripled its presence by taking over of 632 Lloyds branches. This increase in ethical banking is underscored by the development of organizations dedicated to the cause – such as Move Your Money which encouraging individuals and businesses “to move their money to more ethical and socially responsible banks.”
Move Your Money – UK
This increasing focus on doing what is right and fair is heartening. Financial institutions have a great deal of power and they must be held accountable. Our global conscience is affecting change and the more consumers around the world stand for justice in banking – where lenders are more caring and compassionate – the more stable and prosperous we’ll all be.