Basic ways to ban the bomb

Rachel Fixsen on where ethical investors can put their money

If you don't like bombs,chances are you don't particularly want to help anyone buy the materials to make one. But you could end up doing the same thing indirectly if you keep your money with a bank which lends money to arms manufacturers.

Applying your personal moral code to your day-to-day banking and savings is no simple matter. It is straightforward enough to put long-term savings into an ethical or green investment fund, as there are various funds on offer which are run along these lines. These funds have their own set ethical or environmental criteria, and any shares they hold must meet these guidelines.

But moral judgements are hard to make when it comes to banks which, by their nature as lenders, have their fingers in many pies. Managers of ethical funds often avoid the financial sector because corporate lending is largely undisclosed and therefore a murky area.

Michael New, senior consultant at independent financial advisers Barchester Green, which specialises in green/ethical investments, says the opportunities are limited for clients who ask where they can save their money ethically. "It is a problem. Almost always the answer is you can't," he says.

"There is a great need for an ethical building society on the high street," he says. But there's little chance of one springing up anytime soon.

The Co-op Bank provides a range of banking services and adheres to a strict ethical policy. Among other things, it pledges not to invest in or supply financial services to any oppressive regime and says it will not lend to tobacco product manufacturers.

Its rates of interest are comparatively good. Co-op's Save Direct instant savings account pays 5 per cent a year on a balance of pounds 1,000, with higher rates tiered from pounds 5,000, according to financial data provider MoneyFacts.

Triodos Bank, which used to be called Mercury Provident before it was taken over by a Dutch bank, offers various savings accounts. It says all loans it makes with savers' money go to projects which benefit the community and environment. One of its partner organisations in South Africa lent money to help a Soweto pre-school buy land and build classrooms. Affordable pre-schools increase family income by letting mothers work, Triodos says.

Triodos' Social Investor account pays 3.25 per cent annual interest with a minimum balance of pounds 500 and you have to give 33 days' notice to withdraw your money. The bank offers two Tessas. Its Top Tessa pays 7 per cent interest, whereas the Target Tessa pays only 3.5 per cent, but lets you choose which projects or sectors your money will be lent to.

Another option is West Yorkshire-based Ecology Building Society. It will only lend to people buying properties which have an ecological payback - for example organic smallholdings or the renovation of derelict houses which would otherwise be abandoned.

You have to be a member of a green organisation such as Greenpeace before you can open one of its savings accounts. All accounts are postal accounts, and you can choose from the Eco-Instant account, which pays 3.5 per cent gross, and a Tessa, which pays 6 per cent and stipulates a pounds 100 minimum balance.

For philanthropic savers willing to accept a rate of interest even lower than inflation, there is Newcastle-based Shared Interest, which supports the fair trade market. It lends money to help Third World producers with their costs until enough consumer sales come in. "We have some clients who put pounds 1,000 into this, but this is money they really are making as a charitable donation," says Philip Chapman, partner at IFA firm Holden Meehan, which specialises in ethical and green investment.

If you are looking for a mainstream institution, from an ethical and green point of view, building societies are better than banks. Mr Chapman says he might recommend Bradford & Bingley to a client with ethical concerns looking for a building society. The law states that the vast majority of building society lending has to be housing-related, and the rest has to have the backing of members. However, the wave of societies converting to banks has complicated the picture.

Karen Eldridge of the Ethical Investment Research Service (EIRS) says those building societies which have only recently converted to banks are acceptable for savers not opposed to conversion, as they are still predominantly involved in housing. But keep your eyes open for any changes. "Of the big four banks, it's generally accepted among ethical funds that NatWest is better," she says.

According to a report last year in specialist publication Ethical Consumer, NatWest scored as highly as the Co-op Bank when judged on environmental criteria.

Co-operative Bank, 0345 252000; Ecology Building Society, 0345 697758; Triodos Bank, 0500 008720; Shared Interest, 0345 023008; Barchester Green Investment, 01722 331241. Holden Meehan, 0117 9252874, publishes a free independent guide to ethical and green investment funds.

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
football
Life and Style
Jack Cooksey goes for the grand unveiling - moments before dropping his new iPhone 6 on the floor
iphone launch
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
Life and Style
Customers look at the new iPhones on display at the launch of the new Apple iPhone 6 and iphone 6 plus at the Apple IFC store in Hong Kong
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Sport
Andros Townsend is challenged by Vladimir Volkov
football
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Finacial products from our partners
Property search

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests

India could be jewel in the crown for investors

With a new government and an ambitious prime minister, the country offers the prospect of strong returns. But there may be hiccups ahead, warns Simon Read
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Audit Manager Central Functions

    To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

    Credit Risk Audit Manager

    Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week