How To Find (And Switch To) A Bank That Works Well For The Planet And Your Wallet

It's likely you've heard the term 'divestment' before. If not, it simply means taking your money out of a bank that does not align with your values and moving it to one that does.

Everyone's reason for divesting will be different. Maybe you are becoming increasingly uncomfortable with how your bank is impacting the planet by investing in fossil fuel projects, but you're on the fence about switching because you also have a pretty sweet savings rate. Or you have a home loan with lots of perks, but you've learned your lender is funding companies operating in live animal exports.

The good news is that it doesn't have to be one or the other. In this article we'll cover off the steps for how to find a bank that works well for both your wallet and the planet!

Step 1: List out your key criteria

There are plenty of reasons to divest, so this first step is about mapping out your financial goals and where you stand ethically on a range of issues.

I recommend drawing up two columns, one for ethics, the other for financial products. For instance, no fossil fuels, savings account with a competitive interest rate.

Once you have your list, put a ranking against each item. This will help you create your shortlist of banks that best match your criteria.

Step 2: Look at trusted and reputable divestment resources

Like any good detective, the first thing you will want to know is where to look and what information to trust. There are a lot of resources online but not all websites or benchmarks are produced by reputable sources. The sources of information I personally have found most helpful are:

Market Forces' Bank Comparison Table [Australia]

If you are worried about your bank investing in fossil fuels, then your first port-of-call should be Market Forces' Bank Comparison Table. Launched in 2013, Market Forces is an environmental organisation which lobbies for banks, insurers and other Australian financial providers to divest from fossil fuels. Just a few years ago, it successfully campaigned for the big four banks to not invest in the Adani Carmichael Coal Mine.

Market Forces' table shows you not only which banks do and do not invest in fossil fuels, but also which have in the past and which are owned by banks that currently do. There are also banks that do not disclose whether they invest or not.

Don't Bank on the Bomb's list of who invests and who divests

Another useful resource is The International Campaign to Abolish Nuclear Weapons' (ICAN) report Don't Bank on the Bomb. In this report you can see which banks around the world currently finance nuclear weapons. You can even look at ICAN's 'Hall of Fame' to see which banks really walk the talk.

A new version of the report has been published regularly since 2012 and financial research is provided by Dutch firm Profundo.

Animals Australia's Animal Welfare Barometre for banks

As Mahatma Gandhi once said, "The greatness of a nation and its moral progress can be judged by the way its animals are treated." If you want to make sure that your money isn't being invested in industries that harm animals, then check out Animals Australia's Animal Welfare Barometre. This report surveyed the policies and statements from 12 Australian banks, to see where they stand on animal welfare.

The B Corp Directory

One way to suss out which banks are actively supporting good stuff is with the B Corps directory. This is a certification provided by the organisation B Labs, which aims to hold businesses accountable for not only how their operations impact the environment, but also how they treat their employees and whether or not they give back to the community. To search for banks, select 'credit provider' from the industry dropdown and your country to filter results.

Step 3: Cross-reference

Using the resources above, you should now be able to make a shortlist of banks that meet your ethical criteria. The next step is to work out which of these will work for your wallet as well.

While you can go straight to the source of each provider on your list, to save yourself a whole heap of tabs open at once and time, I would use a financial comparison website like Mozo to compare banking products side by side in one hit.

These websites usually have a search function that lists out the interest rates, fees and features of banking products so that you can compare quickly and easily.

Once you've narrowed down your choices you can then head straight to the source to check out the bank or credit union's website to see how open, or not they are about sustainability. Often what a company doesn't say is more telling than what they do. If they don't have any kind of ethical statement, you could email them and ask where they stand on certain issues.

Step 4: Time to divest

Once you have done all your research, the next step is to actually divest. This means switching your bank account, savings, credit card and possibly even home loan to your newly selected provider(s). You don't have to do it overnight, but it might be helpful to give yourself a deadline of a month or so to have everything moved over.

Remember banks almost always want new customers, so you'll generally have the upper hand when signing up. So, if you've done your homework and you know that you can get a better rate elsewhere, see if they are open to rate matching. If this isn't an option, you still might be able to get discounts on other things like fee waivers or extra perks, so it is worth asking.

Step 5: Don't leave your old bank quietly

Ultimately, banks have to answer to their customers so when you switch be sure to give them feedback on why you are leaving and how they can do better. If more and more people send them the same message, they too will change, eventually.

Are you making the switch? Sign our pledge and join thousands of women calling on financial institutions to stop funding fossil fuels and pledging to switch to ethical banks, pension and super funds. Sign here!

Written by Tara McCabe

Tara McCabe is a Finance Journalist for the Australian financial comparison website, Tara has written about B Corp companies, more ethical banking options and even how insurance works for electric vehicles.

Header photo onUnsplash

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