Money matters
 |
Capital as such is not evil; it is its wrong use that is evil.
Capital in some form or other will always be needed.
Mohandas K. Gandhi |
Right, so your ship has come in, you’ve had a few pennies from heaven and feel like you should do something responsible and put your extra dough into savings instead of blowing it on the latest piece of jazzy techware.
Everywhere you look though, there are evil corporate giants, otherwise known as the high street banks, who want to take your wisely invested money and use it for nefarious means, like investing in the arms trade or pollution-belching factories.
All is not lost, however.
There are plenty of options available for the conscience-driven person who wants to make a bit of money on the side.
If you want to keep it simple and not get into the skulduggery of share dealing, savings accounts or cash ISA are the best way to go. In a traditional savings account, you place your money with a bank and they pay you interest in return for being able to use it to provide loans to other individuals and organisations.
Savings accounts generally do not have as easy access as current accounts – i.e. you are often restricted as to how much and when you can access your money, and there may be other restrictions. This is often a bonus for those with itchy fingers however – if you can’t access your money easily, you can’t spend it easily!
A cash ISA will allow you to invest up to £3000 tax-free each year and generally provide higher rates of interest than savings accounts.
One of the best places to look for advice on savings and investments is EIRIS (Ethical Investment Research Service), a charity which provides information on the ethical behaviour of financial companies for individuals and organisations. Researching over 2500 international companies in the financial services, they can answer concerned investors’ questions about where they can put their money with a clear conscience.
EIRIS highlight three organisations with excellent reputations for responding to consumers’ demands that their savings are used ethically: Triodos Bank, The Ecology Building Society and The Co-operative Bank, who also function as the online provide www.smile.co.uk.
The Co-operative grew out of the 19th century movement to create a fairer means of distributing profit out of the industrial revolution. All customers are in fact members, who share in the success of the company and are able to voice their opinion as to how the bank is run. Fourteen years ago, the bank launched its Ethical Policy after customers said they would like to see their money invested ethically.
According to Julie Darroch of the Co-operative, customers expect them to ‘rigourously police our ethical stance, so we not only look into the activities of a would-be customer but also the supply chains in which they are involved. For instance, we investigate a company to see if it is concerned directly in the extraction or production of fossil fuels.’
As the first insurer in the world to launch an Ethical Engagement Policy, the Co-operative is able to, ‘use its position as a major shareholder to put pressure on companies in order to bring about a change where necessary.’
Mutual organisation The Ecology Building Society is dedicated to improving the environment by promoting sustainable housing and communities. It takes the money its customers invest in savings to provide mortgages to those whose plans will be of benefit to the environment on projects like energy efficient housing, ecological renovation, derelict and dilapitated properties and small-scale ecological enterprise.
Triodos Bank got its start in the Netherlands in 1980 and has since opened a number of branches in the UK. Similar in most respects to traditional banks, it differs in the fact that it only offers business loans to those involved in sustainable development projects.
William Ferguson of Triodos says that the institution has a ‘positive investment criteria,’ meaning that it decides ‘who it will lend money to rather than who it won’t.’ It is the only commercial bank in the UK to publish details of all the organisations that it finances, so customers can see exactly where their money is working.
But for those who are only 90 % altruistic, the question remains: can an ethical bank offer the same benefits to savers as the bigger, meaner and more powerful players? The answer, happily, is yes.
The Co-operative’s Privilege savings account pays up to 4.75% and their products are often featured within ‘best buy’ tables.
Triodos, whose rates of interest are generally ‘in the mid-range of what’s on offer from conventional banks,’ has recently won the ‘Best Cash ISA’ category in the Guardian Consumer Finance Awards.
So, it seems, it is possible to make money and feel good about yourself.
Triodos’ William Ferguson sums it up nicely: ‘Your money is a powerful tool to make a difference. If money makes the world go round, why not help it turn in the right direction?’
Karen Morash
