by Vince Caruana
Have we ever wondered where our banks invest in? Or will not invest in? Do we know if they have a list of criteria which deals with issues such as human rights, the arms trade, the environment, fair trade and animal testing?
In 1995 the magazine Maxim carried a story about how its reporters tried to open high-street bank accounts for four unsavoury (and fictitious) organisations. Only one bank turned away all the applicants, which included a white supremacist party, a magazine for drug dealers and a company dealing in chemical weapons.
Being among the most powerful institutions in the world, banks when used positively can finance ethical projects but when used negatively they can control and dominate governments and nations. It is at times difficult to draw the line between "ethical" and "unethical", but banks that promote ethical banking invest in projects that assist ecology, global care, organic farming, fair trade etc., and avoid lending to, or investing in, organisations that promote the misuse of drugs, weaponry and other inappropriate activities. At the moment, worldwide ethical banking is not powerful enough to force governments and businesses into changing their ways for the better. But ethical banking is often an opportunity for citizens to put their money where their mouth is, and is on the increase.
Take the Co-op in the UK, whose ethical policy defines types of borrower it will not lend to, and also says that it will "seek to support and encourage" fair trade and ethical behaviour by its suppliers. Its high profile has helped to alert people to the idea that their money might be financing activities they find abhorrent; and in turn, has contributed to the increasing popularity of ethical and "green" investment funds.
On the other hand the Triodos bank in the UK deals only with borrowers it regards as positively beneficial to society or the environment. It does not pre-define which activities count as positive, instead looking at each loan application on its merits. Among its customers are the fairly traded coffee company Cafedirect - in fact transparency is so high that they publish a list of everyone they lend to in the year.
So in the UK if people are not happy with the ethical policies of their banks, they may choose a bank with a clearly defined ethical and transparent policy. Another option would be to remain with their existing providers and lobby them to improve their ethical policies. It still has to be seen what will happen in a local context.