Where can I invest my savings ethically?

MoneyWhen you put your savings into a bank you are giving them authority to lend this money out to others. You may wish to ensure that your money does not help to fund non-ethical enterprises. The definition of what is ethical can vary, but common areas that are not invested in by ethical finance companies include the sale of arms to oppressive regimes, animal testing, the extraction of fossil fuels, pornography or the manufacture of tobacco products.

Ethical Consumer Magazine regularly publish updates on ethical investments. Their website includes reports comparing various banking services, in which most high street banks come off quite poorly.

The Co-operative Bank refuses to deal with certain types of company and have a clearly laid out ethical policy to reflect this. Most mutual building societies do not lend to commercial companies but only to private individuals so you do not run the risk of having your savings being invested into unscrupulous businesses.

Savings with the Ecology Building Society support their mortgage programme, which lends for the construction of ecological new builds, the renovation and conversion of run-down or derelict properties, as well as projects such as small woodlands and organic smallholdings.

The Shared Interest Society is a co-operative lending society that is part of an international network of fair trade organisations which lend money on fair terms to Third World producer groups.

Triodos is an ethical bank that only lends to projects and enterprises that create social and environmental value. This includes such issues as renewable energy, social housing, fair trade and organic food & farming. They don't offer current accounts for individuals, but have a variety of savings accounts including some where the saver chooses what type of project their money is funding.

If you would prefer to see your savings invested locally then joining a Credit Union may appeal to you. These are co-operative, non-profit making, financial organisations owned and run by their members, for their members. Membership is based on a 'common bond', which means that all members have a link - such as living or working in the same area. Because they are non-profit making any interest created from loans is returned to the investor in the form of an annual dividend and money saved is protected on the same terms as money held in banks and building societies. Credit unions are an effective way of widening access to affordable credit and savings opportunities to those who cannot or do not want to deal with more conventional institutions, such as banks. There may be a limit on how much each member can invest. The Association of British Credit Unions website has lots more information.

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