What is an ethical bank?
When you put money into a bank or building society, it doesn’t just sit there. It’s used to fund loans – and sometimes investments – that generate profit.
With many high street banks, that can include financing fossil fuels, deforestation or other harmful industries.
Ethical banks and building societies take a different approach. They aim to:
- Avoid lending to harmful sectors (such as fossil fuels, arms and tobacco)
- Be transparent about where money goes
- Prioritise lending that supports society and the environment
- Balance profit with positive impact
For savers, switching banks is one of the simplest “set-and-forget” ways to align your money with your values.
At-a-glance comparison
| Provider | Type | Personal accounts | Key ethical focus | Ethical Certification | Notable features |
|---|---|---|---|---|---|
| Triodos Bank | Bank | Yes | Funds only positive-impact sectors | Good Egg | £3/month current account |
| Charity Bank | Bank | Savings only | Loans to charities & social enterprises | B Corp | Owned by charitable organisations |
| Ecology Building Society | Building society | Yes | Sustainable housing & green projects | Good Egg | Mortgage discounts for energy efficiency |
| Reliance Bank | Bank | Yes | Social impact & community lending | – | Roots in Salvation Army |
| Unity Trust Bank | Bank | No (organisations only) | Lending to social purpose organisations | Good Egg | Strong charity & public sector focus |
| Co-operative Bank | Bank | Yes | Customer-led ethical policy | – | Part of Coventry BS group |
| Coventry Building Society | Building society | Yes | Mutual model & values-led approach | B Corp | Member-owned |
| Nationwide Building Society | Building society | Yes | Mutual model | – | Member profit-sharing |
| Gatehouse Bank | Bank | Yes | Shariah-compliant ethical finance | – | Green home finance |
| Tandem Bank | Bank | Yes | Greener digital banking | – | Fossil fuel exclusion policy |
| Starling Bank | Bank | Yes | Ethical exclusions policy | – | Digital-first banking |
Purpose-led ethical banks
These providers are built specifically around ethical or impact-led banking.
Triodos Bank
- What’s on offer? Current accounts, savings and ISAs
- Ethical approach: Funds renewable energy, social housing, education and charities. Explicitly avoids fossil fuels and harmful sectors
- Fee: £3/month current account
- Overdrafts: Not offered
Triodos is one of the clearest examples of a bank designed entirely around positive impact. It holds the Good With Money ‘Good Egg’ mark.
Unity Trust Bank
- What’s on offer? Accounts for charities and organisations (no personal banking)
- Ethical approach: Lending focused on affordable housing, healthcare and community services
Not for individuals — but a key part of the UK’s ethical finance ecosystem. A Good With Money ‘Good Egg’ firm.
Ecology Building Society
- What’s on offer? Savings and mortgages
- Ethical approach: Funds sustainable homes and community projects
- Standout feature: Mortgage rate discounts for improving energy efficiency
Another Good With Money ‘Good Egg’ firm focused on climate-positive housing.
Charity Bank
- What’s on offer? Savings accounts and loans
- Ethical approach: Deposits fund loans to charities and social enterprises
- Ownership: Owned by charitable foundations and trusts
Your savings are directly linked to social impact lending.
Reliance Bank
- What’s on offer? Current and savings accounts
- Ethical approach: Supports social housing, charities and community projects
- Background: Founded by The Salvation Army
A strong option for those prioritising social impact over purely environmental criteria.
Values-led mainstream alternatives
These providers aren’t purely ethical banks but offer stronger policies or structures than traditional high street banks.
The Co-operative Bank
- What’s on offer? Full everyday banking
- Ethical approach: Longstanding customer-led Ethical Policy (since 1992)
- Update: Now part of Coventry Building Society
A familiar name for ethical banking, now backed by a mutual group structure.
Coventry Building Society
- What’s on offer? Savings and mortgages
- Ethical angle: Member-owned (mutual model)
- Notable: First UK building society to become a B Corp
Nationwide Building Society
- What’s on offer? Current accounts, savings, mortgages
- Ethical angle: Mutual ownership (profits go to members)
- Example: £100 Fairer Share Payment to millions of members
Gatehouse Bank
- What’s on offer? Savings and home finance
- Ethical approach: Shariah-compliant (avoids arms, alcohol, gambling, tobacco – not fossil fuels)
- Green feature: Carbon offsetting on some home finance products
Tandem Bank
- What’s on offer? Savings and mortgages
- Ethical approach: Positions itself as a greener bank
- Key claim: Does not fund fossil fuels
Starling Bank
- What’s on offer? Current and business accounts
- Ethical approach: Excludes certain harmful sectors including fossil fuels and arms
Realism check: Like many digital banks, Starling has external investors – which some ethical consumers may want to consider.
How to choose an ethical bank
Not all “ethical” banks are the same. Key things to look for include:
- Where your money is lent (not just invested)
- Clear exclusions (e.g. fossil fuels, arms)
- Transparency about lending and impact
- Ownership structure (mutual vs shareholder-owned)
- Certifications (such as the Good Egg mark or B Corp)
Is switching to an ethical bank worth it?
Switching your bank won’t solve climate change overnight. But it does:
- Redirect your money away from harmful industries
- Support organisations doing positive work
- Send a signal to the wider banking sector
For most people, it’s one of the simplest ways to make their money “do more” without changing how they spend or save.
Which ethical bank is best in the UK?
Ethical banking in the UK has grown significantly, but there’s still a spectrum.
- At one end: fully purpose-led banks like Triodos and Charity Bank
- In the middle: mutuals and values-led providers
- At the other: traditional banks with limited ethical restrictions
The right choice depends on how far you want your money to go — not just financially, but in the real world.
