Late last year, we finally made the switch to an ethical bank. It’s something that I’d been thinking about for a while for Hello Charlie. But I kept putting it into the “too hard” basket.
Many of us, whether you’re an individual or you run a business, hate the banks we’re dealing with. But we don’t make the change because we think all banks are basically the same. It’s a major pain to move banks, too. You have to switch all your direct debits. You need to get new cards, and sort out new PINs.
And for a business, you need to let all your customers know that they need to start paying into a different account. Then you’ve got to sort out all your accounting software, and so on. You see why many of us stick with the same non-environmentally friendly banks for years.
What’s the problem with regular banks?
Regular banks aim for profit over the people and planet.
According to Market Forces, since 2016, four major banks in Australia have funded $44.4 billion for fossil fuels vs. only $14.9 billion of their total lending for renewable energy. These banks have a relatively lower investment for clean energy than other Australian banks. They continue to transact in this way despite committing to the Paris Agreement, which aims to limit global warming below 2 degrees Celsius.
Aside from funding ‘dirty’ energy, many banks worldwide also profit from providing capital for many industries and activities with negative impacts on human health, society, or the environment. Some of these enterprises are into arms deals, factory farming (or intensive animal farming), and the tobacco industry.
What is an ethical bank?
According to FEBEA (European Federation of Ethical and Alternative Banks and Financiers):
“The role of an ethical bank is to work for the common good and ensure the right to receive credit through a banking activity consisting in raising funds and reallocating them in the form of credits for cultural, social and environmental projects. Through their activity, ethical banks promote social inclusion, sustainable development, development of social economy and social entrepreneurship. Ethical banks also help raising public awareness on the role of money and the failure of the economy based on short-term approaches and profit as the only objective.”
Why is ethical banking important?
What’s great about ethical banks is they share their customer's values. They'll carefully consider funding, lending, or investing your money in businesses and activities. But they'll also make sure their actions yield positive impacts at a social, environmental, and economic level.
They also have strong and clear sustainability and ethical policies in place. They don’t lend money to arms manufacturers, tobacco companies, highly polluting industries, casinos or online gambling operators, and other ‘problematic’ industries.
Why did Hello Charlie decide to move to an ethical bank?
One of Hello Charlie's core values is to ‘do the right thing’. We do this and strive to continue doing right by being ethical in all our dealings. We choose products that are beneficial and not harmful to people and our environment. As an eco friendly company, we continue to uphold and promote sustainability. We do this through initiatives like offsetting our team’s personal carbon emissions. We also aim to leave the world a better place through our impacts.
We're committed to doing the right thing in all aspects of the business. So, switching to ethical banking is a necessary move on our part. As a company driven by sustainability, it's only right and ethical to choose a bank that doesn’t invest in projects harmful to the environment. More so in initiatives that deepen social inequalities and injustice.
Moving to an ethical bank doesn't only mean that we're making sure our money isn’t put into such harmful projects and industries. It also means that our money is proactively used for the good of society.
Why did we choose Beyond Bank Australia?
How ethical is my bank, you might ask? Well our new bank, Beyond Bank, is 100% owned by its customers, and it's recognised as ethical Australian banks. It’s also driven by the bank’s emphasis on social inclusion, adding that:
“This style of ownership means our links to local communities are strong and profound. It also means that we have an important responsibility to address some of the social inclusion problems in the community.”
Beyond Bank has put people before profits and always has for 60 years now. It also supports community banking by collaborating with non profit and community organisations. The certified B Corporation bank also assists these organisations in their fundraising initiatives through the Community Reward Account.
The Beyond Bank Foundation has been giving back to the communities. It also pays attention to some of the most pressing challenges of society. The bank supports programs for affordable housing, financial education, people with disabilities, and aged care. It's also been assisting customers and communities in times of natural disasters. Since 2007, it has contributed over $25 million to local communities through grants, donations, and sponsorships.
Some of the best ethical banks Australia:
- AWA Alliance Bank like most ethical banks, is a member owned social enterprise bank. It supports local communities through programs and strategic partnerships and is a certified B Corp.
- BankVic is a member owned ethical bank that is about people before profits. It’s a certified B Corp. bank for police, emergency, and health workers. It reinvests 100% of its profits to benefit the members and the local community.
- Bank Australia is the first customer owned bank in the country. It has a responsible banking policy and promises ‘clean money’. The bank has an extensive list of impacts, one of these being carbon neutral. It’s also a certified B Corp, and runs on 100% renewable electricity.
- CIRCLE Alliance Bank is also a member owned bank. The ethical bank generates funds through its Do Good Banking Products to support the community and its social impact initiatives. It’s also another certified B Corp.
- Teachers Mutual Bank has been one of the World’s Most Ethical Companies® for eight consecutive years (2014-2021). The TM bank is also one of only five banks worldwide to be recognised as such in 2021.
This ethical, community driven bank has a strict exclusion criterion for funding. They don’t fund gambling, alcohol, pornography, and others more.
They’re also a member of the Global Alliance on Banking on Values (GABV).
Image from Beyond Bank
The bottom line about ethical banking
Switching to ethical Australian banks is about putting your money where your mouth is. Ethical banks are people and planet focused. In our experience, they’ll also treat you as a member and not just a number.
As for Hello Charlie, our values, mission, and goals are simply in line with ethical banking. That is why we’ve switched, and we’re never turning back.