New Which? research reveals the most sustainable savings providers

Building societies and specialist banks are the best savings providers for sustainability, beating high-street banks, according to new Which? research.

Many banks are keen to show they are considering their environmental impact as savers become increasingly conscious about the environmental impact of their money and investments. A survey of Which? members found around three in 10 (28%) care about the values of the company their savings are invested in.

However, almost seven in 10 (69%) said they would not know how to find information about a bank’s green credentials, making it difficult to compare providers.

To help consumers understand how sustainable different potential homes are for their savings, Which? worked with Ethical Consumer to rate 18 savings providers, including building societies and high-street banks, on their green credentials.

Each provider was assessed and awarded points based on publicly available information across four categories - environmental reporting, carbon management and reporting, transparency and the company’s ethos, with a maximum possible score of 100.

Triodos Bank emerged as the most sustainable savings provider with an impressive score of 92 out of 100. The bank achieved top scores for its carbon reporting and management as well as ethical lending policies.

In joint second place were Ecology Building Society and Nationwide Building Society, with both scoring 90 out of 100. Ecology Building Society impressed researchers with its transparency, prominently disclosing its lending and investment activities on its website.

Nationwide - the first UK building society to report on the carbon emissions of all the housing it lends on - also scored impressively. It has withdrawn from commercial lending, which rules out fossil fuel investment.

There was a stark difference between the top three sustainable saving providers and most of the high-street banks, which finished in the middle or at the bottom of the table with less impressive scores.

Despite its long-established ethical policy, the Co-operative Bank finished in sixth position with a score of 58 out of 100, making it the best of the high-street banks. It scored well due to its target to send no waste to landfills, however it lost points as its sustainability report did not detail how it helps customers address their environmental impact.

The other high-street banks - NatWest Group (54/100), Lloyds Banking Group (52/100), HSBC (44/100), Barclays (41/100) and Santander (35/100) - finished in the middle of the table. While they all performed well in the environmental category, their policies rarely included a complete ban on fossil fuel investment.

Barclays’ Climate-Related Financial Disclosures showed the bank had investments in aviation, coal mining and oil and gas.

Gatehouse Bank is a Sharia-compliant bank which means it does not invest in the gambling, alcohol or arms industries, however it only scored 27 out of 100 as it was not transparent about the industries it does invest in. Researchers also could not find any evidence of publicly available emissions reporting, despite the bank offering a range of green savings accounts and Individual Savings Accounts (ISAs), where a tree is planted in UK woodlands for every account opened.

Other smaller challenger banks such as Atom Bank (11/100) also received poor scores due to lack of information, even though their small size may reduce their relative impact upon the environment.

The consumer champion shared its study with the banks and while some did not agree with the findings, others highlighted that they have plans to improve their work on sustainability.

Which? also analysed interest rates offered by all 18 providers and found that making greener choices does not need to cost savers. The high street banks that finished in the middle of the table had the lowest interest rates, while some building societies and specialist banks offered competitive rates.

Jenny Ross, Which? Money Editor, said:

“It can be incredibly difficult for consumers to gauge how sustainable a product or company is, but when it comes to savings providers our research shows building societies and specialist banks are doing a better job on sustainability and transparency, compared to high street banks.

“While interest rates are often the deciding factor when choosing a savings provider, we know some consumers would consider moving their money if they found it was invested in industries that harmed the environment. Providers must be more transparent to help consumers compare and make informed choices.”

Notes to editor:

Which? surveyed 1,071 members of its online panel between 20th and 26th May 2021. Which?, along with Ethical Consumer, analysed each provider was assessed against four categories:

• Environmental reporting - Up to 25 points were awarded for future quantified environmental targets, independently verified data and an understanding of the company’s environmental impact, including the impact of the businesses it lends to.

• Carbon management and reporting - This category covers companies’ plans to reduce their environmental impact, policies to avoid investment in fossil fuels, and emissions reporting. A maximum of 35 points was available.

• Transparency and ethical lending policies - To get the maximum 30 points here, a provider must have fully disclosed its business and equity investments, have clear and comprehensive policies for ethical investment, lending and engagement, and give extensive detail on how it engages with customers about ethical issues.

• Company ethos - Providers were scored based on their company structure. Building societies, or providers with another not-for-profit structure were eligible for the maximum 10 points; certified B Corporations could score up to five points. Building societies must hold at least 75% of their assets in residential property, meaning they’re less likely to be lending to unsustainable firms, while B Corporations are required to consider the impact of their decisions on the environment.

Please see below a table of results, detailing providers’ score for each category:

Rights of reply:

A Barclays spokesperson: “While we support Ethical Consumer’s objective of encouraging more sustainable consumer habits, we believe that some of the data is misleading. For example, Barclays has a clear set of financing restrictions for certain fossil fuel sectors, as outlined in our Climate Change Statement which are not reflected in the data and scoring, undermining the credibility of this reporting. We continue to work with clients, industry partners and stakeholders to accelerate the transition towards a low carbon economy as we align the bank’s financing portfolio to the goals of the Paris Agreement on the way to achieving our ambition to be a net-zero bank by 2050.”

A Co-operative Bank spokesperson said: “Earlier this month, The Co-operative Bank was recognised by Sustainalytics, a leading independent ESG (Environmental, Social and Governance) ratings agency, as the UK’s best ESG rated high street bank. It is clear that consumers are increasingly seeking more ethical choices and there is a demand for greater clarity and transparency so people can make informed decisions. We would therefore welcome a clear and consistent ‘kitemark’ system to help customers understand the environmental and social implications of where they bank. Our co-operative values and ethics and our unique customer-led ethical policy mean we are at the forefront of issues that matter to UK consumers.”

Charles Haresnape, Gatehouse Bank’s CEO, said: “We welcome the Which? study into sustainability practices as this is an extremely important area for Gatehouse, and we consider ourselves a growing participant in this field. Clearly from the breadth of this assessment by Ethical Consumer, we need to review and increase the level of information we share on our website. We have plans to further enhance our sustainability position over the coming months, in line with our commitment as a founding signatory to the UN Principles for Responsible Banking. This will see us set sustainability targets for the bank and become operationally carbon neutral, and this information will be shared on our website. We believe our position is far stronger than that represented by this survey and will continue to evolve our sustainability position in order to ensure we achieve a significantly improved score should this study be undertaken in the future.”

A NatWest Group spokesperson said: “Tackling climate change is one of the biggest challenges of our time and for NatWest Group it is central to our purpose-led strategy. As the leading bank in the UK for business customers, and one of the largest for personal customers, we are supporting people and businesses across the UK to reduce their climate impacts and to transition to a net zero carbon economy.

“We have set robust targets to make sure we reduce our own climate impact and those of the customers we lend to. We have already made our operations net zero carbon and our financed emissions will be net zero by 2050. We have taken great strides as a bank but we know there is a lot more to do.”

A Santander spokesperson said: “At Santander UK, as part of Santander Group, our purpose is to help people and business prosper, which permeates the way we conduct our business and it is at the core of our sustainability strategy. We are committed to recognising the impact we have on all our stakeholders, and aim to be responsible in everything we do. We have invested in developing a UK-wide sustainability strategy and over the last year we evolved our priorities and ambition levels to ensure we accelerate our journey to become a truly responsible bank.”

Bevis Watts, CEO of Triodos Bank UK, said: “We’re pleased to be recognised for our unique approach to sustainability and transparency in finance through this new ranking. Sustainability is absolutely at the heart of Triodos Bank and we’re pleased to enable people’s money to be used as a force for good through our savings accounts, as well as current accounts and investments.”

Atom Bank, Ecology Building Society, HSBC, Lloyds Banking Group and Nationwide did not respond to our request for comment.