Businesses have access to a range of banking options, each offering their own perks and benefits. Finding the right choice of banking for your business can be tricky, sometimes your choice can come down purely to a banks ethical stance. FSB explain how to choose business banking
based on how a bank decides to invest your money.
What is ethical banking?
At its most basic ethical banking is the term applied to banks who make investments which have a positive environmental and social impact.
This means that when a bank makes an investment using your business’ money that you know it isn’t going to invested in businesses or sectors which have a harmful impact, such as:
• Tobacco companies
• Business that focus on fossil fuel extraction
• Companies involved in unethical practices such as a reliance on child labour
Choosing an ethical bank
The choices an ethical bank makes, in terms of how they invest money, is outlined in their ethical policy. A document that is often made freely available to help potential customers better understand a business’ ideology.
When it comes to choosing an ethical bank you can think about the values your business has its ideology, and the causes your business supports. Use these as a starting point to find a banking provider with an ethical policy in line with your business’.
This way you know your bank in supporting causes you believe in and can help to create a closer relationship between your business and financial provider by having more common ground.
The other side to this is that you know your bank isn’t investing in industries which can reflect poorly on your business.
By choosing a bank that shares your values and allows you to associate your business with worthwhile causes you can find a banking partner for your business based not only on services but on a valuable ideological standpoint.