How green is your bank?

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How green is your bank?

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Green is big business these days. Global sales of 'environmental industries' are estimated at £280bn - as big as aerospace or pharmaceuticals. The cynics amongst us would say the interest in environmental issues and the rush to promote credentials is often nothing more than a publicity stunt to tap into a potential competitive advantage. But regardless of the motives more and more people are more and more interested in how the companies they buy from behave - both ethically and environmentally.

So if you're doing your bit what is your bank doing?

Barclays

Last year Barclaycard launched the Breathe card - the only UK credit card to donate 50% of profit to support carbon reduction projects in the UK and abroad. The donations are sent to Barclay's independent environmental partner PURE, the Clean Planet Trust. All UK operations of Barclays are carbon neutral and global businesses will be so by 2009.

HSBC

HSBC was the first major bank to become carbon neutral in 2005 and they have maintained that position. They have a Carbon Finance Strategy which seeks to develop opportunities to work with them to promote clean energy generation, efficient and renewable energy technologies. HSBC has also launched a Climate Change Fund which invests in companies best placed to benefit from developing solutions to the challenges presented by climate change.

HBOS

Last year HBOS became the first major Scottish company to achieve carbon neutrality after reducing emissions by 65% over the previous two years and offsetting the remainder using 100% Kyoto-compliant carbon credits.

Lloyds TSB

Lloyds TSB has a goal to reduce its carbon emissions by 30% by 2012. They have been working with The Carbon Trust to develop a carbon management plan that will deliver cumulative reductions of up to 150,000 tonnes in the next five years.

The Royal Bank of Scotland

As part of "employee" engagement RBS have launched a "green portal" - a programme of offers and incentives for employees called "Your World". It's a package of environmental issues and advice to help them to go green at home. RBS has had a Group Environmental team for about 10 years, but the tempo is increasing.

The Co-op Bank

The Co-op Bank is now widely recognized as pitching for business based on its ethical standpoint. Their policy is reported to have cost the Co-op Bank more than £14m in 2007 after it rejected a succession of deals involving oppressive regimes, military hardware and other business ventures it deemed unethical.

The bank said strict rules on how customers treated their workers and the environment also led to record numbers of accounts being turned away or closed. Their stand point is commendable but questions are being raised about just how important these sorts of issues become when the wallet gets squeezed.

If having a green bank is important to you then you need to do the research to find out how much of the hype is marketing and how much is genuine. There is little doubt that ethical and environmental issues are affecting consumer behaviour and having the right environmental credentials can offer a unique competitive advantage in a tough market.

Is the desire for ethical and environmentally sound products only relevant when the economy is doing well and inflation is under control? With rising costs for energy, fuel and food will people start to compromise their ethical position to save a few pounds?

Let's hope not. As Blythe Masters, head of global commodities at JP Morgan said, 'Personally I don't think the recession is an issue at all. Recessions will come and go, but the environmental reality is upon us whether we like it or not.'