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Ethical Banks in Australia [The Ultimate Guide]

Does ethical banking really exist?
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Ethical, or Environmentally friendly banks? Yeah, you read it right!

In this all-new guide, you’ll learn:

  • ✅ How to help save the planet with your banking habits
  • ✅ What is the most ethical bank in Australia
  • ✅ New banking environmentally friendly strategies
  • ✅ How to get an ethical bank, and an ethical home loan
  • ✅ Lots more

So if you want to start 2022 on a positive note, and consider the environment when it comes to your banking habits, you’ll love today’s guide.

Let’s get started.

Environmentally friendly

 

1. Choose your bank wisely and save the planet

Is banking really affecting the environment?

Yes, yes, it is.

But how exactly?

In this chapter, I’ll give you some of the tips and takeaways that I’ve learnt around banking and how it directly affects the environment. 

Mining

How can you be environmentally aware when choosing a bank?

Let’s get one thing straight. Where banks invest their money makes a HUGE difference to the environment. So when it comes to saving, where your money sits, really does matter.

Let’s take a look at which banks have a positive impact on the community and invest it back into the planet, the people and animals. This is what qualifies as an “environmentally friendly” bank. So when I refer to this, that’s what I mean.

Too many banks are putting their money towards investments that aren’t helping us progress forward (fossil fuels). 

According to a repot from Market Forces:

where-is-your-bank-investing

 

How do I determine if a bank is ethical and environmentally friendly?

There are different ways to figure out if banks values align with the environment. 

So what about the big four?

Here’s a bit of bad news for you. 

Unfortunately, after extensive research and different sources, the big four are invested in fossil fuels. 

Market Forces outlines in a table how much these banks have invested in fossil fuels since 2008. 

ANZ, Commonwealth Bank, National Australia Bank and Westpac all investing millions of dollars into fossil fuels.

So moving forward, this is something to consider.

Fossil-fuel-banks

 

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Which banks are NOT investing in fossil fuels?

These findings have made me seriously reconsider my current banking situation. So if you are too, here are the banks that are environmentally friendly and helping the planet progress forward. 

 

Bendigo Bank

Bendigo Bank always talks about its strong focus on giving back to the community. 

And in this instance, they really practice what they preach. 

Bendigo Bank stated that they have made a conscious decision to reduce and offset their impact. They outlined that they don’t lend money to projects in the coal and coal seam gas sector. 

 

Teachers Mutual Bank

Out of all the banks, Teachers Mutual Bank seems to tick all of the boxes.

Not only are they investing in environmentally friendly resources. But they are also considered a very ethical bank (we will get to the difference in chapter two).

To add to that, those who are applying for a loan and buying environmentally friendly products will also be rewarded with reduced rates.

This includes purchasing green cars or upgrades on their homes in a more environmentally friendly way – like solar panels, greywater treatment systems and rainwater tanks.

 

Suncorp

Ok, so Suncorp Bank has actually switched teams. So kudos to them!

Suncorp had initially invested $1,049m in fossil fuels but have since withdrawn from the sector. They released a statement saying:

“We no longer have any exposure [to fossil fuel companies] as Suncorp Bank only provides lending to personal, SME and agribusiness clients”.

 

Heritage Bank

Heritage Bank has also confirmed that they don’t invest with companies in the coal and gas sector.

 

But wait, is there a blurred line for some banks?

Your bank didn’t get mentioned? Well, they’re not in the clear year. This is where it gets tricky. 

Just like Bank West is owned by Commonwealth Bank, many smaller banks are branched off a large corporation.

So technically they’re still a part of it. 

Here are the banks that are owned by banks that invest in fossil fuels. 

Take a look at the table below for details.

Banks-owned-fossil-fuel

 

Are there still green banking options for these banks in Australia?

In a push to move forward with more environmentally friendly options, some of Australia’s biggest banks are looking to make the world a little greener. These include helping to make it cheaper for consumers to buy environmentally friendly products for our home, like solar panels and batteries. 

Some of these schemes include:

Commonwealth Bank of Australia (CBA) – Green Home Loan

CBA has recently released an ultra-low, secured fixed-rate loan with no establishment fee, monthly loan or service fees. The minimum loan size is $5,000 and maximum loan size is $20,000 and is limited to be used on energy-efficient products like solar panels, battery packs and solar hot water systems. More info here.

CBA also announced a Green Home Loan Offer which is available on homes that can be used on homes that are rates NATHERS 7 star or greater or meet the following criteria:

  • Option 1: Your home is a certified Green Building Council of Australia (GBCA) Green Star Home or;
  • Option 2: Your home meets all of the following criteria:
    • Nationwide House Energy Rating Scheme (NatHERS) = 7 stars or greater
    • Electrified through installation of a heat pump hot water system and no gas
    • Solar PV 

Bendigo Bank Green Home Loan

If you are considering building or renovating your home using energy-efficient products Bendigo bank can provide cheaper home loans, and personal loans with rates starting from 4.99%. More info here.

Bank Australia Cleaner Car Loans

Bank Australia is offering discounts on car loans and lower fees if you choose to buy a lower emission vehicle, more info here.

Macquarie Bank Electric Vehicle Loan

Macquarie is also trying to assist with reducing the costs to buy an electric vehicle with their discounted home loans, more info here.

 

 

What about environmentally friendly products?

So you may be familiar with environmentally products and packages offered by particular banks.

For example, UBank offers the Green Term Deposit.

This product invests money put into this account into climate-friendly projects like solar energy and low carbon transport. 

So really, the debate is if the broader corporation is still investing other funds into fossil fuels, where do you draw the line?

I’ll leave that to your discretion.

wind-solar

 

2. How can I save the planet with my banking habits?

So we’ve learnt about which banks are climate-friendly, and which aren’t so much. 

But on a smaller scale, there are changes you can make to ensure your banking is as environmentally friendly as possible.

Let’s take a look.

 

How do my banking habits affect the environment?

Have you ever thought about how many bank statements will be mailed to you throughout your lifetime? 

Aside from paper costs, add to that transport of the letter to get there. 

In reality, the technology shift is helping us all save in resources but there’s more you can do.

  • Use internet banking or apps when you can. Instead of visiting the branch, bank online! This helps save resources, as with fewer branches, less energy will be used to maintain them.
  • Stop getting statements mailed to you. Opt to get them emailed instead. This saves paper and resources to send it to you. To be honest, I find it so much easier for filing purposes too!

 

Where can I get more information about environmentally friendly banking?

There are a few different websites for you to learn more about both environmentally friendly and ethical banking. 

Take a look at them below:

 

 

What about ethical banking? 

Ethical banking can be a term that is hard to define. Especially in the banking sector. 

But in general, we can assume the following:

Ethical-banking

An ethical bank doesn’t lend money to fossil fuels, gambling, arms, tobacco and live exports. 

Ethical banking can be further clarified as a bank that focuses on values-driven by social and environmental responsibility.

The Australian definition of ethical banking would assume that an ethical bank does not have exposure to, invest in or trade with any of the following: 

  • Tobacco
  • Fossil fuels and coal mining 
  • Deforestation 
  • Mining of precious minerals and other materials)
  • Weapons (guns or other arms)
  • Human exploitation or human rights abuses
  • Gambling
  • Pornography or sex slave trade
  • Animal cruelty

For example, on Bank Australia’s website, they state that they don’t lend to these industries, which outlines it nice and clear. 

Australia-Bank

The Ethisphere determines which companies are the most ethical in the world.

The following banking institutions were mentioned in 2017 as some of the most ethical. 

  • Allstate Insurance (mortgage lender, car insurance, home insurance, farm insurance)
  • Arthur J Gallagher Insurance (US-based insurance company with branches in Australia)
  • Northern Trust (asset management)
  • Principal Financial Group (retirement solutions, insurance)
  • Teachers Mutual Bank (mortgage lender, bank accounts, credit cards, insurance) *** [Also mentioned in the environmentally friendly list]
  • TIAA (asset management, financial advice, investment solutions)
  • USAA (banking services, life insurance, health insurance, car insurance, home insurance, investments)

 

Tell me, will you be changing banks?

Leave me a comment below and tell me if you’ll be changing banks to support a greener future?

 

That’s it for now

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The information on this page is general in nature and should not be considered as advice. Before you act on this information you must seek independent legal and financial advice.

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