how ethical is your bank?
Arctic mining, fracking, arms dealing, nuclear weapon production. It sounds like the shopping list of James Bond villain, but what if I told you that the money sat in your bank account right now is probably funding all these activities?
If you bank with any these guys…
HSBC
Barclays
Royal Bank fo Scotland (includes Natwest)
Santander
Lloyds
… and I bet my reusable coffee cup that most of you do if you’re UK based (collectively these banks have 80% market share in the UK), then it’s time you knew the truth.
These banks use YOUR money to fund unethical, carbon intensive and financially risky projects all over the world. Chasing profit at the expense of the planet and human health is easy when you’re not required by law to publicly declare how shady your spending is - so it’s time to untangle this mess ourselves.
Whilst you’ve been innocently squirrelling away for your dream holiday, or a deposit for your first home, or just to have some cash set aside for a rainy day, your bank has been investing it everything from UK fracking sites and American oil pipeline to Colombian coal mines.
It’s not just happening in the UK. Since the 2015 Paris Agreement was signed, 33 leading banks globally have poured $1.9 trillion to the fossil fuel industry, and $600 billion was invested in 100 companies most aggressively expanding fossil fuels. So if you don’t bank with any of these culprits, do your research.
Here’s a snapshot of ways these big banks have been complicit in climate change - focusing on the last few years only. All these figures are as recent as I can find but are not 100% up to date. Why? Because, well, it’s not easy to access recent figures on the ethics of banking when they aren’t obligated to provide them!
Barclays:
Barclays is the biggest funder of fossil fuel infrastructure in Europe. It’s claimed that between 2012-2017, Barclays bankrolled 15 fossil fuel companies with more than £22.6 billion, including corporations pushing plans to develop the UK’s fracking industry. Barclays has supported the hugely controversial North Dakota Access Pipeline - a 1,172-mile-long underground oil pipeline that cuts through land in the United States, impacts indigenous communities, affects the quality of drinking water puts wildlife at risk, not to mention it’s significant contribution to climate change. It’s also The application for the pipeline was made in 2014 approved in 2016 - AFTER the Paris Agreement was signed in 2015 by almost every nation including the UK to reduce the negative impacts of climate change. Barclays has invested in North Yorkshire’s fracking plans - although this wasn’t approved by UK government and over the last two year its shelled out $5 billion in the nuclear weapons.
HSBC:
HSBC spent over £7.7 billion from 2014 - 2016 on dirty investments including tar sands exploration and deepwater drilling for oil in the Arctic. In 2019 HSBC launched a PR campaign to announce it would ‘mostly’ stop bankrolling unethical companies working on coal plants and arctic drills in high-income countries. We celebrated - for a moment - until it was revealed they had simultaneously created a deliberate loophole in its energy policy that allows them to fund coal plants across countries including Bangladesh, Indonesia and Vietnam - all in the global south on the frontline of climate change. The commitment made to cut tar sands exploration ‘over time’ without any specific goal for completion is loose at best too. Reality is that HSBC is one of the biggest backsliders in banking having increased its investments by $2.6 billion from 2016 to 2017.
Santander:
Santander has escalated spending in fossil fuels too. In 2014 investments stood at $574 million and this increased to a whopping $2.24 billion by 2016 - again after the Paris Agreement. Spending in ultra-deepwater mining (one of the most extreme fossil fuel extraction methods) was the most significant area of growth from $290 million in 2014 to $1.82 billion in 2016. Santander not only demonstrates support the fossil fuel by investing, it’s also aiding its expansion despite claims to support the Paris Agreement. Santander also maintains over 21 subsidiaries in tax havens, suggesting its involvement with tax avoidance plans.
RBS
The Royal Bank of Scotland (which incorporates NatWest) is 62% publicly owned. Evidence shows it has invested over $4 billion into fossil fuels since the Paris Climate Agreement was signed in 2015, directly contradicting the Government’s objectives to curb climate change. RBS has shares in companies involved in unsustainable palm oil deforestation and claims of serious workers’ and human rights issues. In 2018 the bank announced new energy lending policies that excluded Arctic oil drilling and oil sands exploration plus fossil fuel lending by RBS in the last couple years has fallen considerably but their track record reinforces skepticism - we can only celebrate their changes once they’ve been made permanent and specifically exclude financing fossil fuels.
Lloyds:
Last but not least, Lloyds Bank put almost £3 million into nuclear weapon production companies between 2014 - 2017 and has been linked to funding companies selling arms to Isreal, fuelling a massive humanitarian crisis (HSBC and RBS have also been caught up in this).
What can we do about it?
Whilst most of our major banks have recently announced commitments to reducing finances that support carbon intensive, financially risky and environmentally catastrophic fossil fuel projects, we’re not feeling the urgency. Don’t be fooled by the squeaky clean image they are trying to build as they slowly build portfolios of clean, renewable and sustainable initiatives. Their actions (or lack of!) since the Paris Agreement accord was signed clearly demonstrates a lack of genuine intention to revolutionise their efforts for the sake of people and planet.
An IPCC report on Global Warming estimates that we need to invest $2.4 trillion per year up in clean energy to 2035 to have impact. We don’t have time to stand by whilst the finance sector profits from destroying the planet, leaving us to feel the environmental backlash. Our money has the power to change the world, and we need to act.
Triodos, hailed as the pioneer of ethical banking, screens out companies that are harmful to people and planet before making investments. It finances companies which it thinks add cultural value and benefits society and the environment - and all its reporting is transparent so you can see where every penny goes. Ethical Consumer has investigated, scored and ranked the ethical and environmental record of 29 current accounts so you can find a bank that aligns with your values.
If changing banks isn’t an option then hold your current one to account for its investments. Visit your local branch and speak to the manager. Find out where your money is going, demand transparency and ask for your concerns to be escalated. Put pressure on your bank to divest from funding from unethical projects, weapons manufacturing and arms dealing. You have a right to know (and say) where YOUR money is invested.
Ultimately we need to take control of our money. Make sure it’s invested in places that align with a world you want to live in and a future you want to leave behind.
Other resources:
People and Planet has launched a campaign to divest Barclays and have been staging peaceful protests around the UK in 2019 with more planned in 2020.