Ethical business banking?

thermidorthelobster

Hi,

As a long-time Co-Op Bank customer, I've found their customer service is going rapidly downhill so I'm moving my accounts elsewhere.

I'm looking for ethical banks - those who invest ethically, have good governance, and don't make people want to punch their executives in the face. Unfortunately this rules out most of the standard High Street names. I also want decent customer service, which narrows the field even further.

I've gone with Nationwide for my current accounts, on recommendation, but they don't offer small business accounts, and neither do First Direct, who were also recommended.

Apart from Co-Op, can anybody recommend a business banking provider which doesn't give you the same feeling of uncleanliness and disgust as a dead badger carcass?

Thanks.

OhReally_2

thermidorthelobster wrote: »

Hi,

As a long-time Co-Op Bank customer, I've found their customer service is going rapidly downhill so I'm moving my accounts elsewhere.

I'm looking for ethical banks - those who invest ethically, have good governance, and don't make people want to punch their executives in the face. Unfortunately this rules out most of the standard High Street names. I also want decent customer service, which narrows the field even further.

I've gone with Nationwide for my current accounts, on recommendation, but they don't offer small business accounts, and neither do First Direct, who were also recommended.

Apart from Co-Op, can anybody recommend a business banking provider which doesn't give you the same feeling of uncleanliness and disgust as a dead badger carcass?

Thanks.

How do you define "invest ethically" exactly? :huh:

First Direct are owned and operated by HSBC, so plenty of opportunity there is that suits you.

eskbanker

As above 'ethical' can mean different things to different people, but try the configurable analysis tool at http://www.ethicalconsumer.org/buyersguides/money/bankingcurrentaccounts.aspx to see if this helps you decide....

innovate

OP, how would you vet the top echelons of your ethical bank for ethical-ness? Would you just trust what they say until some journalist one day would film them buying drugs / curb crawling / proposition an underage person / losing a few billion behind the sofa etc etc?

ManAtHome

Nationwide maybe not such a good choice http://www.thisismoney.co.uk/money/saving/article-2377076/Nationwide-members-revolt-bumper-pay-awarded-directors.html (unless you get a job on the board....)

SurfKing

thermidorthelobster wrote: »

Hi,

As a long-time Co-Op Bank customer, I've found their customer service is going rapidly downhill so I'm moving my accounts elsewhere.

I'm looking for ethical banks - those who invest ethically, have good governance, and don't make people want to punch their executives in the face. Unfortunately this rules out most of the standard High Street names. I also want decent customer service, which narrows the field even further.

I've gone with Nationwide for my current accounts, on recommendation, but they don't offer small business accounts, and neither do First Direct, who were also recommended.

Apart from Co-Op, can anybody recommend a business banking provider which doesn't give you the same feeling of uncleanliness and disgust as a dead badger carcass?

Thanks.

As previous commentors have said, ethics can be hard to quantify and mean different things to different people.

In light of recent events it's easy to point the finger at the Co-op and call them hypocrites for claiming to be ethical, but their central claim really wasn't related to whether their executives took drugs, or whether their commercial loans book was good.

The Co-op did not invest in the likes of oil companies, they actively turned away business from organisations which worked against the interests of minorities, they had large business units which specialised in lending to renewable energy projects and to local government, and they actively worked on improving financial inclusion by making their basic bank accounts accessible to more people than most banks, by running schemes to help people who's instability would usually preclude them from even having a basic bank account (such as recently released prisoners), and by being among the first to have accounts accessible through the Post office. The co-operative ownership model, in theory, also has the potential to be more ethical than the traditional ownership model of most banks.

Unfortunately, you'll find it difficult to find anything close to that level of ethical consideration among other banks providing business accounts. Nationwide had announced a few months ago that they would enter the business account market - if you can wait it out with the Co-op it might be worth seeing how Nationwide's offering compares (if it ever emerges).

If you really have to jump ship soon, then the only thing I can think of would be that you should look at smaller banks. Depending on your particular ethical interests, TSB (once it floats) might be the best of a bad bunch as they focus on personal accounts and small business accounts, so they don't have the big oil and weapons investments which the likes of RBS and Lloyds have.

PeacefulWaters

The Co-op did not invest in the likes of oil companies

This always baffled me. The extraction of oil helps get the average working man to his place of work. The pious Co-op wouldn't support them.

they actively turned away business from organisations which worked against the interests of minorities

Another moral judgement. I'd be intrigued to see examples.

they had large business units which specialised in lending to renewable energy projects

There is an insanity in, for example, wind power. While I have no objection to the development of the technology if you take it to the nth degree you would need to cover over 40% of the UK with windmills to replace traditional energy sources. And then have alternatives sat idle waiting to kick in when the wind drops.

and to local government

I bet they picked their councils by political colour.

and they actively worked on improving financial inclusion by making their basic bank accounts accessible to more people than most banks

And then closing them with their "three strikes and you're out" rule.

being among the first to have accounts accessible through the Post office.

A commercial decision that was cheaper than opening the hundreds of branches that they needed.

I struggle with the Co-op. They tell you they're different, but they still paid the top man an obscene amount of bonus, mis-sold PPI, repossess houses when push comes to shove, have had some of the most mediocre products of all banks when it comes to price rarely offering great value for customers and due to accounting incompetence (or criminal negligence) lost hundreds of millions of pounds many years ago and forgot to mention it until now nearly destroying the wider Cooperative movement.

Apart from that, they're a shining model of ethics and perfection.

thermidorthelobster

It's quite hard for me to define my own view of "ethical" banking. I'm thinking about two strands: ethical investment, and corporate responsibility. I'd also view attention to customer service as falling under the banner of corporate responsibility.

So ideally I want a bank who invests ethically and at least pays some attention to making the world a better place, not worse. Personally I don't view the typical newsworthy antics of banks (paying vast bonuses to loss-making directors, sailing as close to the legal wind as possible to squeeze the last penny out of customers to pass on to investors, etc) as a positive contribution to the world in general (probably because I'm not a wealthy investor).

I'm sure people can pull apart my thinking here without too much difficulty and tear my philosophy to shreds, but I think you probably get the gist of what I'm after.

Co-Op scores moderately well in terms of ethical investment, but their governance doesn't appear to be any better than anybody else's; as a Co-Op customer I do find their customer service is pretty abysmal recently though.

As a basis for discussion, let's consider the ratings on !!!!!!.uk. Clearly this is all hugely open to interpretation, and this thread could easily turn into a discussion of the accuracy and meaning of this type of rating, but it's a starting point.

Triodos come out well, and when I researched them they seemed to tick a lot of boxes; the one problem is that their business account doesn't provide a debit card, and as a SME this would be very useful to me.

Handelsbanken also look good on paper, but they don't deal with smaller businesses, only established medium to large enterprises.

I'm therefore led back to Co-Op, but I'm put off by their incompetent (rather than malicious) governance, and my poor customer service experiences with them.

InsideInsurance

You still haven't said what you consider ethical investments to be? Do you have issues with firearms/military kit? Pharmaceuticals (ie animal testing)? Alcohol? Petrochemicals?

Handelsbanken will consider a vSME business account if you are also a personal customer (or at least the ones I spoke to are). Branches are very autonomous and so ultimately it comes down to local policy on who they will consider for both sides of the fence

thermidorthelobster

I'd say I have blanket issues with tobacco, and am fairly uniformly supportive of renewables, but with everything in between it's very dependent on the detail. For example, I have no issue with pharma, but there's ethical pharma and unethical pharma. If a company is hitting the headlines for questionable practices which the majority of reasonable people think are putting relentless profit ahead of quality of human life, then I wouldn't really want my bank to be investing my money in it.

I spoke to my local Handelsbanken (Plymouth) and they were polite but didn't want my business account, although I'm not a current account holder with them.

BillJones

thermidorthelobster wrote: »

If a company is hitting the headlines for questionable practices which the majority of reasonable people think are putting relentless profit ahead of quality of human life, then I wouldn't really want my bank to be investing my money in it.

It's maybe useful to remember that a person, or bank, buying shares in Glaxo (for example) is not really doing much to benefit Glaxo. You are not giving that money to Glaxo to use in its nefarious plots, you are giving it to an investor who previously owned the shares, and wanted to sell them.