An ethical bank, also known as social, alternative, civic or sustainable bank, is a bank concerned about the social use of its investments and loans. A banker or bank is a Financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money Investment or investing is a term with several closely-related meanings in Business management, Finance and Economics, related to saving A loan is a type of Debt. This article focuses exclusively on monetary loans although in practice any material object might be lent Although there are differences among the main ethical banks, they share a common set of principles, the most prominent being the transparency and the social or environmental aim of the projects they finance. Some of them are specialized in microcredits. This article is specific to small loans For financial services to the poor see Microfinance.
Ethical banks are regulated by the same authorities as traditional banks and have to abide by the same rules. They have to be distinguished from ethical institutions that provide certain banking services but do not meet the legal definition of bank.
The name of "ethical bank" is somewhat controversial, because it seems to imply that the other banks are not ethical. However, it is the most extended denomination.
Ethical banks usually work with narrower profit margins than traditional ones, and therefore they tend to have few offices and operate mostly by phone, Internet or mail. Profit margin, Net Margin, Net profit margin or Net Profit Ratio all refer to a measure of Profitability. An extreme case of this is Smile (a subsidiary of Co-operative Bank), the first ethical bank that operates exclusively by Internet, followed by eBay Microplace. Smile, or smilecouk, is a British Internet bank, and a trading division of The Co-operative Bank. eBay Inc is an American Internet company that manages eBaycom an Online auction and shopping Website in which people and businesses buy and MicroPlace, founded in 2006 is a broker-dealer registered with the SEC and a member of FINRA (formerly NASD MicroPlace is currently the only broker-dealer
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Green ethical banking
Green banking is a subset of ethical banking focused on green energy, to address global warming. Green energy is a term used to describe sources of energy that are considered to be Environmentally friendly and non- polluting. Global warming is the increase in the average measured temperature of the
Green banks
Ethical banks
English-speaking countries
- Co-operative Bank, United Kingdom. ShoreBank is an American Community development bank and green bank
- Reliance Bank, United Kingdom
- ShoreBank, USA
- RSF Social Finance, San Francisco and New York, USA
- Shared Interest, based in the United Kingdom, investing throughout the developing and developed world. Formerly known as The Salvation Army Bank Reliance Bank Limited was founded in 1890 by William Booth. ShoreBank is an American Community development bank and green bank RSF Social Finance, located in San Francisco California is a non-profit financial services organization offering investing lending and philanthropic services to individuals and enterprises Shared Interest Society Limited is a Fair trade financial co-operative based in the United Kingdom formed in 1990.
- Wainwright Bank (USA). An ethical bank, also known as social, alternative, civic or sustainable bank, is a Bank concerned about the social use of its
Non-English-speaking countries
- Banca Popolare Etica, based in Italy, with branch in Spain.
- GLS bank, Germany. The GLS Bank (full name GLS Gemeinschaftsbank eG is a German bank that was founded in 1974 as an anthroposophical initiative
- Grupo Financiero FINSOL (Mexico).
- JAK members bank, Sweden, interest-free bank
- La Nef, France. The JAK Members Bank, or JAK Medlemsbank, is a cooperative member-owned bank based in Skovde Sweden.
- Triodos Bank, based in the Netherlands with branches in Belgium, the United Kingdom and Spain. Triodos Bank NV is a Bank based in the Netherlands with branches in Belgium, the United Kingdom and Spain.
Further reading
- "Banking and Credit Cards", Guardian Unlimited, Feb. 22, 2001.
- "How To Guide: Make the Switch to an Ethical Bank", Friends of the Earth Scotland
- Ben Cohen and Mal Warwick, Values-Driven Business, ISBN 1576753581
- Christopher J. Cowton & Paul Thompson, "Do Codes Make a Difference? The Case of Bank Lending and the Environment", Journal of Business Ethics, v. 24, n. 2 (March 2000)
- Paul Thompsn & Christopher J. Cowton, "Bringing the Environment into Bank Lending: Implications for Environmental Reporting", British Accounting Review, v. 36, n. 2, pp. 197-218 (June 2004).
See also
- Carbon Disclosure Project
- Climate ethics
- Corporate social responsibility
- Equator Principles
- National Venture Capital Association
- Socially responsible investing
External links
- FEBEA, European Federation of Ethical and Alternative Banks
- INAISE, International Association of Investors in the Social Economy
- Social Investment Forum
- Moneyfacts ethical banking information. The Carbon Disclosure Project is an organisation which works with Shareholders and Corporations to disclose the Greenhouse Gas Emissions of major corporations Climate Ethics or Climate Justice is a new and growing area of research that focuses on the ethical dimensions of Climate change. Corporate social responsibility (CSR also called corporate responsibility corporate citizenship responsible business and corporate social opportunity is a concept whereby Organizations The Equator Principles (EP are a set of environmental and social benchmarks for managing environmental and social issues in development Project finance globally The National Venture Capital Association (NVCA is the leading trade association representing the Venture capital industry in the U Socially responsible investing, also known as sustainable investing or ethical investing describes an Investment Strategy which seeks to maximize both Financial
- Westpac (Australia).
Ethical banks
- Banca Popolare Etica (It)
- Co-operative Group ethical policy Smile Bank (The Co-operative Bank).
- Cultura Bank, Norway
- JAK, Sweden, interest-free bank
- Merkur Bank, Denmark
- RSF Social Finance (USA)
- Triodos Bank, UK
- Wainwright Bank & Trust Company (USA), ethical bank.
Specialized green ethical banking
- Green banking, ethics and sustainability.
- How Green Are Your Money Mangement Skills?.
- Bank customers keen to be green.
- Green banking options remain limited, EIRIS says.
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