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Mouthy Money Your Questions Answered panelist, Martyn James, helps one reader who is trying to discover the green credentials of her bank.
Q. I don’t want to bank with a company that invests in fossil fuels, how can I find out how green mine actually is and how can I believe what it says?
A. There’s a legendary scene in Absolutely Fabulous, when Edina is marketing some plastic sunglasses.
“What does that sticker with a green tree on it mean?” asks Saffy. “Kind to trees, sweetie,” she responds. When Saffy questions how, she’s told bluntly: “Well they aren’t made of wood, how kind do you want?” and that in a nutshell is greenwashing, where words like ‘green’, ‘environmentally friendly’, or ‘eco’ can sometimes mean the exactly the opposite.
Greenwashing is an incredibly complex area to research if you want to invest ethically but it usually involves using ‘environmentally friendly’ labelling that isn’t so accurate. If you want to invest ethically, you must assume that businesses might not be honest about their motivations or actions.
There are also different levels of involvement, a business could be involved in direct production of fossil fuels, for example, or it may provide funding, investment or banking facilities for fossil fuel companies.
One of the problems at the moment is there is no one standard for how banks are judged when looking at their green credentials. The Financial Conduct Authority’s Sustainability Disclosure Requirements (SDR) are due to come in to force soon and they will introduce a whole range of new rules around sustainable investments.
Until then, if you want to check out how ethical a bank or business really is, then cut out the website fluff and go straight for the annual report. These documents are usually designed to hide contentious issues under text, graphs and picturess so it’s worth skimming the key bits and searching for key words to save you time.
Many charities and campaign group, such as Reclaim Finance, also have tools and guides tell you how invested a bank is. But always yourself how objective this data is, where it was sourced from.
Martyn James is consumer rights expert and campaigner with over two decades of experience covering every business sector in the UK, from finance to utilities.
As a broadcaster and presenter, he appears on all the national television channels and is a regular guest and presenter on Rip Off Britain, Morning Live and The One Show, as well as commentating on breaking stories for all the news channels and bulletins. As a journalist, he has written for all the national newspapers and regularly features in the news.
Photo credits: Pexels
Award-winning freelance journalist with a decade of experience working for online and print publications in the consumer sector.