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What’s your bank doing about climate change?

Three quarters of customers don't know what their bank is doing with their money

What’s your bank doing about climate change?

Some 95% of people don’t know what their bank is doing to reduce its carbon footprint, new Which? research has found.  

Despite this, 47% said it’s important that their bank has a policy to reduce its carbon footprint, versus 23% who said it’s unimportant, according to a survey of 1,056 Which? members from October 2020.

The disparity could come from how banks communicate their environmental policies.

Our research found it can be hard to find out what a bank is doing about climate change, making it difficult for customers to make environmentally friendly banking decisions.

Here, we look at where you can find out more about your bank’s environmental policy, and why it matters.


Why banks’ climate plans matter

We don’t know of any bank that openly despises the environment. But their approaches differ wildly, from some that are carbon neutral to others that still lend to or invest in the fossil fuel industry.

Even if you don’t have any investments yourself, banks will usually invest some of the money you keep in current and savings accounts, or lend it to businesses.

But our October survey of Which? members suggests most customers aren’t aware of what banks do with their cash:

It may not seem as tangible as switching to an electric car or cutting back on meat, but choosing a bank with a better climate policy can reduce your carbon footprint, and put pressure on the industry to evolve.

Sadly, when Ethical Consumer magazine recently reviewed 36 UK banks’ climate change strategies, only two – Ecology Building Society and Triodos Bank – received its top rating.

So what should you be looking out for?

According to Rob Harrison, Ethical Consumer’s founder and editor: ‘A good climate change plan should demonstrate to customers how a bank is going to play its part in reducing global emissions fast enough to meet the Paris Agreement’s international climate targets.

‘This means that the banks need to be measuring the carbon impacts of all the businesses they lend to and working with them to get [these emissions] down.’

How to find your bank’s climate change plan

We asked 28 banks where customers could find out more about their climate change plans. We also asked how they could find out where their money was being invested.

Of the 14 banks that responded, 11 pointed us towards pages on their websites.

Only Triodos offered a detailed breakdown online of where customers’ money is invested. Nationwide, the Co-operative Bank and Starling made it clear that customers’ money wasn’t invested in fossil fuels. Santander included numerous links to its policies on what industries it wouldn’t invest in.

However, most of the other banks’ websites simply acknowledged that their investments have an environmental impact, without going into detail.

The focus was instead on what the bank was doing to make its working practices more sustainable. In some cases, banks gave customers tips on how to reduce their own environmental impact.

You can see the webpages yourself at the links below:

Look at annual reports

Eight banks said that customers should consult their annual reports.

NatWest Group, for instance, lists the percentage of its lending that goes to oil and gas, mining and other industries.

Metro Bank says it doesn’t lend to carbon-intensive industries and has ‘no plans to do so’.

Yet these useful sections were on p41 and p39 of the banks’ respective annual reports, which run to hundreds of pages. It’s understandable, then, that some customers may struggle to find or interpret this information.

Evidently, if you want to find out what your bank is doing about climate change, you may have to do some digging to get answers. And even when you do, you might not find all the detail you need.

Every bank we heard from expressed ambitions to become more sustainable. But if the details of their efforts aren’t readily available, it’s hard for customers to draw comparisons and make choices that benefit the environment.


Listen: our experts discuss ethical investing on the Which? Money Podcast


  • Find out which banks scored best for customer service, online banking and more in our guide to the best and worst banks
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