Most Ethical Banks Australia: Ethical Banking and Green Banking

Never has there been a better time to consider the importance of who you bank with. Have you ever asked yourself if your bank is Ethical or Green and who is the most ethical bank in Australia? For most it’s not even a thought process when you apply for a loan.

At a time where we are all becoming more socially conscious consumers it’s important to know there are banking organisations that have chosen to go above and beyond. This includes implementing actions in certain ways which include mindful lending criteria and critical decision making that affect both the environment and economy.

Sustainable banks focus not only on generating transparency, but also consider the social brunt that it may have on its consumers sharing best practices in clean energy and reducing our carbon footprint while still establishing a necessary responsibility of growth of its investments and loans.

There is a difference between ethical banking and green banking but most lists combine the two as there is a strong overlap between them.

Given we deal with banks as experienced mortgage brokers, we found that Ethical banks and Green banks tend not to invest in any of the following:

• Deforestation
• Tobacco companies
• Human Exploitations
• Gambling
• Pornography or sex slave trade
• Animal cruelty
• Weapons (including guns or other arms)
• Fossil fuels and mining of precious minerals

Which Australian banks lend to fossil fuels?

Marketforces.org.au list the following banks who have lent to fossil fuels since 2008.

• AMP
• ANZ
• Bank of China
• Bank of Queensland
• Citi
• Commonwealth Bank
• HSBC
• ING
• Macquarie Bank
• National Australia Bank
• Westpac

The Big 4 have apparently lent over $89,500,000,000 to fossil fuels over the last 12 years. To be clear, that $89.5 Billion (with a B).

So who are the most ethical banks in Australia?

According to Ethisphere https://ethisphere.com/ they have published a list of globally ethical companies. As listed in  https://www.worldsmostethicalcompanies.com/ the most ethical company is Australia is Teachers Mutual Bank.

Strangely, another ratings company who focuses more on sustainable rankings https://www.corporateknights.com/ put Westpac and National Australia Bank on their top 100 globally most sustainable corporations. So how can Westpac and NAB be one of the largest lenders to fossil fuels in Australia and also be listed in the most sustainable companies globally? Well, it has to do with how they assess each company.

www.corporateknights.com evaluates on a whole range of different KPIs which include but are not limited to:

• Energy, Water, VOC productivity (i.e. how many resources do they use)
• Injuries, fatalities, employee turnover, women in Executive management, women on boards and sustainability pay link
• Clean revenue i.e how much profit do they make from clean products/services?

You see from above, as long as “most” of the company’s profit is from clean products/services, it would rate highly. I’m not sure if I would agree with this but certainly, all the above such as low injuries, higher numbers of women in executive management and boards are important but I would have thought this is more classed in the ethical banking segment rather than the green banking or environment banking segment.

Green Banking in Australia

Financial institutions are offering products in a move forward to protect our planet and make a greener word for our next generations. These include investments made into climate-friendly projects such as solar energy and low carbon transport.

Some of top Green products on offer include:

Commonwealth Bank – Green Mortgage initiative

An energy efficient scheme for environmentally friendly home owners offering cashback offers to CBA mortgage holders who have installed solar panels

www.commbank.com.au/guidance/newsroom/cba-unveils-new-green-mortgage-initiative-201905.html

Bendigo Bank Green home loan

For those who are looking to build or renovate green homes with including energy efficient products including solar hot water systems, insulation or rainwater tanks

www.bendigoadelaide.com.au/green_future/generation_green.asp

Bendigo Bank secured green personal loans

Suitable for ‘A’ rated vehicles emitting less than 130g of CO2 per kilometre

www.bendigobank.com.au/personal/personal-loans/green-personal-loan/

Bank Australia – cleaner car loans

Applying a 1% interest rate discount to the loan and no establishment fee for those looking to purchase a Low Emission Vehicle.

www.bankaust.com.au/personal/borrow/personal-loans/car-loan/

U-Bank green term deposits

Invest in a UBank Green Term Deposit and NAB will hold a pool of funds for projects and fund initiatives such as wind and solar energy, love carbon transport and low carbon buildings. UBank Is a subsidiary of NAB.

www.ubank.com.au/banking-overview/term-deposits

Teachers Mutual bank

Teachers Mutual bank is definitely taking action in more ways than one. They are:

1. Leaders in fossil free banking
2. They do not use member’s funds to directly lend to large-scale greenhouse polluting activities within the fossil fuel industry. 3. The Bank does not use members’ funds to finance large-scale greenhouse-gas pollution.
3. Have $1 billion of Certified Ethical Investment based on fossil fuel exclusion.
4. Own six buildings with installation of solar PV and LED’s with carbon
5. Been a carbon neutral bank for over six years

www.tmbank.com.au/community/creating-a-better-tomorrow

Thanks for reading. Click ahead to go back to the news & articles page, or check out some more posts like the banking royal commission recommendations interview and my opinions on this, or another one showing the complete history of interest rate changes in Australia over the past decade.