Starting or running a business and want to give a good impression to customers and your staff? Picking the right business bank account is a great way to start. Read on to learn more.
Why does Ethical Business Banking Matter?
Banks collateralize debt and use money in your account to make investments. Many banks invest in fossil fuels, arms and companies with unethical practices, some solely invest in ethical businesses and renewable energy.
By extension, your bank reflects your business ethos, as your money will be used for varying purposes according to who you bank with. Some may even consider banking within Scope 3 carbon emissions, as money invested does have a carbon factor, especially if invested in fossil fuels.
Your bank appears on your invoices and maybe tracked through your payments. Increasingly the public is becoming aware of banks with poor environmental and ethical investment practices, and although this may not stop someone from doing business with you, it may become a subconcious consideration.
Checking a business bank account is ethical
If you’re running a business you’ve probably already got an account, if you’re looking then these tips will help you make a good decision from the get-go.
Here are some markers you may want to consider in your search:
- Investments in the extraction or burning of fossil fuel (e.g. coal mining/power, arctic drilling, tar sands, fracking)
- Investments in arms or military activities.
- Have they made a declaration of a climate (and ecological) emergency? If so – what actions are they taking?
To save you time on the fossil fuel question there is a brilliant report produced from Bank Track which details level of investment from banks in 2019 into fossil fuels. Barclays, HSBC, BNP Paribas, Santander, RBS as well as many others have billiosn invested in fossil fuels.
You will probably want to ask your bank directly about arms and military activities. Declarations are usually a very public thing so either this will be searchable online or it will be a very simple question for an employee to answer.
The Best Ethical Business Accounts
Triodos started in 1980 and only uses money in ways that benefit people and the environment. They do not invest in fossil fuels or arms or military activity, and have recognised the climate emergency, with CEO Bevis Watts signing a letter in support of Extinction Rebellion last year.
The great thing about the bank account at Triodos is there is no standing charge, only charges for transfers and payments in/out of the account. Limitations include only online banking services, and very few high street locations. Cash payments can be made through a post office though and if you need a card for your business a credit card from a seperate provider can be used and put on automated payment.
The Co-operative Bank bank has had a recently chequered history, but it has always remained committed to ethical practices. Although not quite a niche in how it limits it’s investments, it does not invest in fossil fuels or arms/military. Although there is not public record of the bank declaring a climate emergency it’s operation is carbon neutral and it has publicly supported the school strike.
For this account you get cards and good online banking and there are no charges for the first 30 months for small businesses, including for transfers/withdrawals. Payments can also be made through post offices, as well as the number of high street banks available.
A relatively new player, which is quickly growing. It has been confirmed through curiouslyconcious that this bank does not invest in fossil fuels, arms or military activities. As a paperless, branchless bank hosted in the cloud their activities are pretty carbon neutral.
There are some great services with Starling including automated annual reports for HMRC and VAT returns, as well integration with Quickbooks. Their fees are pretty reasonable with no monthly charge for a basic account but charges for withdrawals/transfers. This is a great option for a small digitally aware business!
How to Switch Bank Account
Switching bank account is really straightforward and can happen in just 7 days. Simply start an account that then transfer funds.