From who you bank with to your weekly shop, your financial habits can have a big impact on the wider world. Our guide to ethical money solutions reveals how you can do good with your finances, both for you and others.

What does being “good” with money mean to you? Maximising your returns, borrowing cheaply, or the impact your financial habits could be having on the wider world?

Though they might not always be obvious, there are ethical money solutions out there which enable people, through their money habits, to help make a positive impact on the environment and society.

Research from Triodos Bank has found a big appetite among UK investors for creating positive change – with two thirds (67%) saying that for the economy to succeed in the long term, investors need to support progressive and pioneering businesses.

Bevis Watts, managing director of Triodos Bank UK, says investors increasingly recognise the power of money to be a “powerful tool for change”. He says: “They know they can exert a positive influence on our wider society by simply channelling their investments into things that benefit not only themselves but also the world around them.”

What are ethical money solutions?

Who our money is banked or saved with can have a big impact.

Different people have different beliefs about ethics, so it’s very much down to personal choice when it comes to how to be “good” with your money. There may be particular organisations, for example, whose aims mirror your own beliefs and principles.

Simon Howard, chief executive of the UK Sustainable Investment and Finance Association (UKSIF) says: “We’re flagging that it’s up to the public to make sure they are taking advantage of the products available in banking and investment to make ‘good’ money choices.”

How does where I put my money make a difference?

The firms where you put your money may also do business with companies whose activities you support, or they may carry out activities you’re not too keen on.

John David, head of Rathbone Greenbank Investments, says rather than just boycotting companies whose actions you don’t agree with, people could also consider actively investing in those whose values they support. He says investing ethically can also bring about change within companies. David says: “Shareholder activism, for example voting on executive pay or environmental reporting, can be very effective in provoking change in an organisation.”

Ethical money solutions - do good with your finances

What sort of ethical money solutions could I consider?

This could be anything from current accounts and savings accounts to loans and pensions. You could ask your own bank or building society about their ethics and policies. For example, the Co-operative Bank’s ethical policy has been shaped by feedback from its members, and Triodos Bank publishes details of the organisations it lends to on its website.

If you’re using a financial adviser, you could also ask them what ethical or sustainable options they could suggest.

Is there anything else I could consider?

Triodos Bank, which asked website good-with-money.com for some top tips, also suggests thinking about your weekly food shop. For example, some people may want to consider buying more locally-sourced food or products. Utility bills and weighing up different energy providers’ credentials may also be another option to consider.

Ethical money solutions to explore

Keen to know more about how to do good with your money? From making sure your pension is invested in funds that marry up with your values, to mindful shopping and supporting your local community, here are some tips from Good Money Week.

1. Think about your own values

Firstly, sit down and have a think about your ethics, what you stand for and what you’d be happy for your money to support – and equally what you would not feel comfortable with your money supporting. For example, is renewable energy your passion point, or shopping Fairtrade, or ensuring that the local community is invested in?

Or have you recently gone meat-free or cut down on your use of plastic, and want this to be reflected in the industries your money supports? Referring back to your particular values will help guide you through your actions.

Good Money Week discovered that when prompted, the top places that people would like to see their pension money support include green energy, sustainability, water conservation, renewables, and electric vehicles.

2. Mention the pension

Around 9.3 million of us invested in workplace pensions by the end of 2019, which means billions of pounds being invested in the name of the UK’s workforce. But in new research commissioned by Good Money Week, over half (53.3%) of those surveyed stated that they have no idea where their pensions are being invested.

Last year, Good Money Week campaigned to encourage the UK’s workforce to find out where their pension is invested. You can do this by simply by asking your boss or HR manager to check whether it’s invested in funds that match up with you and your colleagues’ values.

Many pension providers offer an ‘ethical’ or ‘sustainable’ option – but it may not have been used as your default. And some pension providers can even let you change your fund yourself online, making it really simple.

One in six (15.4%) people say would feel awkward asking their employer where their workplace pension is invested. But getting over this awkwardness will help ensure that your pension money is used for ‘good’.

3. Switch bank accounts

Thanks to services such as Current Account Switch Service (Cass), it has never been easier to switch. The numbers of ethical banks operating in the UK are growing at an encouraging rate. Co-operative Bank, for example, has a customer-led ethical policy. And Triodos Bank has an ethical investment policy and publishes details of the organisations it finances.

4. Move savings into ethical money funds

Ethical money solutions - savings and investments

Even the most bog-standard savings account will be sending your hard-earned pennies somewhere, so have a look around at how you could be using your savings more positively.

5. Switch to a green energy supplier

Like changing current accounts, switching energy providers is no longer the headache it once was. The number of providers supplying renewable energy in the UK has increased in recent years, with green energy suppliers including Bulb, Ecotricity and Good Energy.

6. Shop locally and buy locally sourced produce

We should all be shopping mindfully and avoiding wasteful purchases, but when you do need to shop, you may want to try going local. As well as more cash staying on your local high street and benefiting the surrounding economy, when you shop at local butcher’s, baker’s, farm shop and greengrocer’s, a good bulk of the produce may have had a relatively short ‘field-to-fork’ journey. Supporting local farmers may also mean that the food may be wrapped in less single-use plastic packaging.

7. Consider ethical investment

Ethical money solutions - shop locally
Ethical money solutions – shop locally

The word ‘investment’ might sound scary, but it doesn’t need to involve big amounts of money. Some investment platforms offer investments that have a positive impact on the environment and society. You could try making a small commitment and see what happens – you may discover the returns are more encouraging than you thought.

Where can I go for more information?

Information about ethical and sustainable options potentially available can be found at Good Money Week. The Financial Conduct Authority (FCA) also has a warning list enabling people to check, in general, any pension or investment opportunity they have been offered and protect against scams.

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