Who does your bank lend money to....

Hello my name's Jill and I am a successful life centered financial planner, working with my clients to make sure they have the best life possible with the money that they have, to manage risk, protect the one's they love and finish with impact.

I love my work and one area of financial planning I embrace is the opportunity for clients to invest in funds, where the fund managers have a specific mandate, to screen out companies, who's business activities are not aligned with their own personal values. For years I was a reluctant investor, until I discovered the world of ethical and sustainable investments, funds that are fully regulated by the Financial Conduct Authority and analysed by research agencies including Defaqto, Morningstar and Rayner Spencer Mills. Its a rapidly growing area now and I subscribe to adviser databases for more in depth and client specific research. If only someone had opened the door when I was in my twenties......

Last night, I listened to Faith Johnson an environmental business leader and founder of the Peak District Environmental Quality Mark. As she ran through some of the science of climate change, she came to a graph showing the correlation of CO2 levels in the atmosphere with the rise and fall in global temperatures over the last 800,000 years as measured from Antarctic ice core studies.

The picture was stark. There is now an unprecedented level of CO2 in the atmosphere, more than twice the levels that have existed in the last 800,000 years. This could mean global temperatures are due to skyrocket. I quit smoking, alcohol and recently reduced my caffeine levels in the hope I can spend more time with my children on planet earth and I don't want my plans screwed up thank you very much. When the media churn out doomsday prophecies of death and destruction due to climate change its all to easy to get overwhelmed and end up paralysed with the fear or even taking up drinking and smoking again!

It was therefore, reassuring to hear Faith say that the UK is leading the world in climate change initiatives and that she would share 7 small yet powerful actions that we can all take, to save the planet.

Here is her action number 6.

Carbon has just got to stay in the ground. We have about 11 and half years to turn this around and we cannot be producing more CO2. We all have money ( or debt) with banks. Are our banks using our money to dig carbon out of the ground ? Yes probably. Write to your bank, ask them which companies they finance and move your money to a bank that doesn't support carbon and carbon intensive industries. Faith Johnson - Action no 6.

Being a financial practitioner and understanding the role that investors and the investment "industry" can have, in changing the climate change trajectory, this was a call to action and a challenge to find out more about the banks and to encourage my clients to do the same.

I know there are investment funds I recommend which have a zero tolerance towards carbon but not everyone is an investor. There are more of us who use banks or are indebted to the banks, so why do we ask such few questions of them ? Could more change come about if we paid more attention to who we bank with and asked them to tell us what they are doing with our money ?

A good starting place for looking at the banks and their lending policies is Ethical Money a website initiative from the EIRIS foundation. Find out more here.

The banking section of the website has a useful 60 second fact sheet, a next steps page with templated letters to use when writing to the banks and a data base of banks outlining their policies.

There are quite a few banks listed, who claim to be carbon neutral but this needs to be examined in terms of how it is achieved and whether their carbon neutral policy extends to lending, particularly with project loans. To do the subject justice and find out more about banks would involve an in-depth scrutiny of their policies and a great deal of letter writing or even a documentary film crew, to find out exactly who the banks are lending to and which activities those recipients maybe undertaking that could have a devastating effect on the environment.......but if we all wrote to our banks..... who knows what the results could be.

Having looked at the Ethical Money research findings on banks, only two banks that seemed to pass the basic standards are The Co-operative Bank and Triodos. Smile an online bank who's parent is the Co-operative bank didn't pass the basic standards on financial exclusion, I guess because you need a laptop or other device to access your account.

Now here's something I didn't realise. I have been aware of Triodos for their ISA's but didn't appreciate that they offered a business bank account and full banking services. They also only require applicants to have a minimum turnover of ￡5,000 per annum so great for fledglings, start ups and financial inclusion.

Here's the Triodos minimum standards policy statement which does give an indication of the type of business and associated business activities they will and won't lend to. The Co-operative Bank set out their values and ethical policy but do not seem to have any similar statement as to the type of business they will or will not lend to. They have however had policies around climate change since 1998 and run a customer led ethical policy which saw them withhold over 1.2 billion in lending as a result of customers voicing discontent. More letters.....

Thank you for reading this far. I hope you can go and explore the Ethical Money website and if there's anything I can help with please get in touch.

I for one will make a couple of important phone calls tomorrow.

Sources and Resources

• Ethical Money - a consumer financial products website from the EIRIS foundation
• Co-operative Bank Ethical Policy Statement.
• Triodos Bank - Minimum standards statement
• Photo Credit Kevin Grieve

Jill Turner is principal adviser at Jill Turner Associates, Holistic Financial Planning and Wealth Management. A finalist in the Money Management Financial Planning Awards 2016 in the Protection Category, a member of the Personal Finance Society, the London Institute of Banking and Finance and a member of the UK Sustainable Investment and Finance Association.