Prologue

When I posted the news about Citibank Two Scandals, a friend of mine replied :

Me and my wife decided, some years ago to move our little savings to a diferent kind of bank. An ethical one. Have you ever heard of them. Mine is this one: http://www.triodos.es/es/conozca-triodos-bank/

I am still shocked with those horrible cases happened here, and it’s not only Citibank, there’s several cases hit several banks.

So, I visited the link he gave me and also  browse topics about that different kind of bank.  It is somewhat interesting.

As they said that Triodos Bank is one of the world’s leading sustainable banks. And their mission is to make money work for positive social, environmental and cultural change. Specifically, they said they are in business to:

– Help create a society that protects and promotes the quality of life of all its members.
– Enable individuals, organisations and businesses to use their money in ways that benefit people and the environment, and promote sustainable development
– Provide our customers with innovative financial products and high quality service

Historically banks have been viewed solely as financial institutions, which should concern themselves only with all things financial. Morality has not entered the equation. This public view has allowed banks significant leeway with concern to ethical standards. This is because they have not been associated with the actions taken by the businesses they lend to. Banks have also stated that a reason for not mounting the new challenges that sustainability presents is that such inspection would require interference in the activities of clients.  I believe this is why such two scandals upon Citibank Indonesia could happen.

However with changing social demands, and as more is known about the effects that banks can have through their lending policies, banks have begun to feel pressure from the general public, NGOs, governments, and the like to go beyond conventional business management.

There is one bank in UK, actually, there is only really one high street bank in the UK with an ethical policy, that’s the Co-operative Bank. The bank has its roots in the co-operative movement that started in the 19th century as a way of creating a fairer model of capitalism through shared ownership. The bank remains committed to those ideals, and members all receive a share of the profits. Co-operative is not on the stock market, and maybe it made them much more stable than other banks, and has actually grown during the credit crisis.

In the mid 1990s the Cooperative Bank asked 6,000 customers what their thoughts were on ethical banking; 84% responded that it was a good idea.

 

So, What It Is?

An ethical bank, also known as a social, alternative, civic, or sustainable bank, is a bank concerned with the social and environmental impacts of its investments and loans. Ethical banks are part of a larger societal movement toward more social and environmental responsibility in the financial sector. This movement includes: ethical investment, socially responsible investment, corporate social responsibility, and is also related to such movements as the fair trade movement, ethical consumerism, boycotting, etc.

Ethical banking is a juvenile sector within this movement. Other areas, such as fair trade, have comprehensive codes and regulations to which all industries that wish to be certified as fair trade must adhere. Ethical banking has not developed to this point; because of this it is difficult to create a concrete definition distinguishing exactly what it is that sets an ethical bank apart from conventional banks. While there are differences between ethical banks, they do share a common set of principles, the most prominent being transparency and social and/or environmental aim of the projects they finance. Ethical banks sometimes work with narrower profit margins than traditional ones, and therefore they may have few offices and operate mostly by phone, Internet, or mail.

Just like in Co-operative Bank above, with its strict ethical policy, no investment goes to companies involved in the arms trade, fossil fuels, animal testing, and so on. And customers vote every year on how their money is used, so new concerns are regularly included, such as genetic modification or climate change. The bank has turned away over 900 million pounds worth of loan applications since it adopted its ethical policy in 1992.

Or just like Triodos. Not only do Triodos have an ethical policy, they declare every loan they make, a uniquely transparent measure. Rather than doing as little harm as possible, Triodos set out to use money for good, and will only finance businesses that “add cultural value and benefit people and the environment”. They are best known for investing in wind power in the 1980s, long before it was a fashionable cause.

Now, I am start looking for one. Aren’t you?

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