Businesses could gain a competitive edge simply by saving with an ethical bank

Last Updated on: 22nd November 2023, 05:29 pm

Ten years on from the start of the financial crisis, Charity Bank is calling on businesses to move their savings to an ethical home.

As new research reveals almost six in 10 people prefer to buy from businesses that act ethically, Charity Bank hopes to inspire business leaders across the country to save with an ethical bank as it launches its Follow the Money campaign.

Launched a decade after the global financial crisis, the campaign aims to highlight a different approach to banking and how by saving with an ethical provider, people and organisations can transform their money into a powerful force for good.

Follow the Money will see 38 charities and social enterprises – who have all received loans from the ethical provider – open their doors to show people how savers’ money is being used as a force for good.

It comes as research*, published by Charity Bank, revealed that 57% of people in the UK would prefer to buy from businesses that act ethically. And half (52%) said they wouldn’t apply for a job with a business that behaves unethically.

Charity Bank is now calling on businesses to question how their savings are being used. It’s asking them to consider whether their money could go beyond simply earning a fair return and be channelled into the social sector to help to make a positive contribution to society.

One business owner who has already put her money where her values are and is enjoying the benefits of moving towards a more ethical way of doing business, is Jane Thurnell-Read, of Life-Work Potential, which sells test kits to therapists around the world.

She tries to make ethical choices in both her business and personal life, including donating 50% of her personal income to charity and saving her corporation tax in a Charity Bank Ethical Easy Access Account.

Jane, who lives in Devon with her partner, believes that choosing to spend and save ethically is one of the most powerful actions we can take towards creating a better world.

She said: “Ethical finance is important to me and to my business. I want to use the money I have to support the world I want, rather than the world we’ve got. I’ve been with Charity Bank for about a year and a half now. I went to their reception and awards ceremony earlier this year. It was good to hear about some of the causes being supported and to learn a bit more about Charity Bank. The team really seem to care – it’s not just about lending money to make money.

“The way you save or spend really does make an impact. It’s one of the most powerful things individuals can do. Just look at the effect that divesting from fossil fuels is having – businesses like Shell will have to adapt if they want to remain viable. I think it was Mother Teresa who said, ‘Don’t complain about the darkness; light a candle.’ We all need to be lighting a candle. They’re small, but if we don’t do it then nothing will change. And the more people who do, the bigger the effect.”

Over the last 16 years, Charity Bank has made over 900 loans. The recipients range from a marine conservation charity to a young people’s theatre, grassroots sports club to an employment academy for people affected by homelessness.

Throughout September and early October, Charity Bank is touring the length and breadth of the country to showcase how its savers’ money is being used to support organisations such as Lewis-Manning Hospice, which offers free, specialist palliative nursing care to people with a life-limiting illness in Poole, Bournemouth and surrounding areas.

Lewis-Manning opened a purpose-built hospice to provide both day care and inpatient services, including end-of-life care. The building was funded, in part, by a Charity Bank loan. This is just one example of how ethical savings can be used to make a real difference.

Elizabeth Purcell, Chief Executive Officer of Lewis-Manning, said: “We wanted to offer a community hospice service, where people with a life-limiting illness could get support from diagnosis right through to end-of-life. The only way to do that was to knock down the existing building and create a state-of-the-art facility that could cater for the needs of patients throughout their journey.

“We needed a loan to help with the build and the development, and felt it was important to choose an ethical provider. We wanted to work alongside a bank that has a similar moral and values-based belief system and culture. It would have been difficult to take out a loan from a commercial provider.”

Elizabeth added: “When we first decided to open the end-of-life unit, there wasn’t another community inpatient hospice in England that was run by nurses but offered medical support. If you’re doing something that’s new and beneficial to your community, it’s vital that you get it right. We’ve been successful in what we’ve done, so it’s really good to know that Charity Bank is using our repayments and savings to help other charities in their endeavours.”

Further findings from Charity Bank’s recent survey of 4,000 people across the UK* highlight the nation’s appetite towards doing businesses with organisations that act ethically. It revealed:

Two fifths (41%) would pay more for a product or service from a business that demonstrates its ethical values.
60% believe businesses should do more to tackle social issues.
55% prefer to buy from businesses that can demonstrate similar values to their own.
Younger generations tend to feel more strongly about ethical and social issues, with 71% of 18-34-year-olds saying they would prefer to buy from businesses that act ethically.

Edward Siegel, Charity Bank’s Chief Executive, said: “It’s easy to dismiss the possibility of achieving a social return as well as a financial return on your investments, but saving ethically offers the chance to do both.

“By channelling money into charities, social enterprises and social businesses, your money is used as a force for good. It enables these organisations to grow, innovate and build upon the services and support they provide to their beneficiaries.

“We are seeing a positive shift in attitudes towards social investment and ethical business, particularly amongst younger generations who are keen to align themselves with like-minded businesses and banks that are open and transparent.

“A lot of savers don’t have any idea where their money is being invested but it’s now very much within their power to question this and take control over how and where their money is used.

“Businesses have the power to make a positive impact on society by moving their savings to an ethical home, which could help improve their brand trust and reputation at the same time.”

Follow the Money, now in its 10th year, gives Charity Bank savers the opportunity to see how their money is being used to support charities and social enterprises. This year’s tour, which corresponds with Good Money Week (29th September – 5th October), started at the beginning of September and will run until October 5th, taking in visits to 38 Charity Bank borrowers.

To keep up to date with the Follow the Money tour and support the campaign, visit www.charitybank.org/followthemoney

*An online survey of 4,000 nationally representative UK adults (aged 18+) carried out between 27th February and 6th March 2018 by Opinium on behalf of Charity Bank. The results have been weighed to nationally representative criteria.