Chris Appleyard

In my last blog post, I explored the environmental and ethical impact of where we bank. This time, I want to take a deeper dive into how the biggest high street banks compare to app-based banks and ethical banks like Triodos, Co-Op, and Nationwide when it comes to their environmental impact—whether directly through their operations or indirectly through the industries they finance.

Ethical Banking: Idealism vs. Functionality

If you truly want every penny of your money to be used for ethical causes, then banks like Triodos are the gold standard. They’re transparent about where deposits are invested—supporting renewable energy, social housing, and ethical businesses while avoiding fossil fuels, arms, and exploitative industries. But in practice, banking with them can be frustrating:

• Their app lacks the smooth functionality of modern fintech banks.
• Faster Payments often take an hour to process, whereas Monzo, Starling, and traditional banks usually process them instantly.
• They don’t always report to major credit agencies properly, meaning using them exclusively can hurt your credit profile.

So while Triodos is great for ethical impact, it’s not ideal for daily banking—especially if you need a reliable, modern banking experience.

Fintech Banks: The Ethical Middle Ground?

I personally use Monzo because it suits my needs. It allows me to automate deposits, create pots for bills, and manage my spending effortlessly. Their Flex credit card makes interest payments and repayments easy to understand—something traditional banks could learn from.

From an ethical standpoint, Monzo claims to avoid financing harmful industries. They also treat employees well, and their headquarters seem like a positive place to work. But how do they compare to Starling?

• Monzo: Great for budgeting, but offers credit cards and overdrafts, which some may see as encouraging debt.
• Starling: Generally seen as more ethical—no fossil fuel investments and a stronger commitment to green finance.

Between the two, Starling might be the better ethical choice, but Monzo still offers a user-friendly, flexible banking experience.

Other App-Based Banks to Consider

Are there other fintech banks that align with ethical banking? Some options include:

• Revolut – Very functional app, but ethical transparency is questionable. Their investment arm does not exclude fossil fuel industries. (They also still don’t have a full banking licence)
• Tide (for business banking) – Focused on small businesses but no clear ethical policies, in my opinion.

At the moment, Starling seems to be the best app-based bank for both functionality and ethics.

High Street Banks: A Mixed Bag

If you prefer a traditional bank, which ones are doing the best (or worst) when it comes to ethical banking?

The Bad Players: Fossil Fuel Funders

Many high street banks still invest heavily in fossil fuels. Barclays and HSBC are among the worst offenders, consistently funding oil, gas, and coal projects worldwide.

• Barclays: One of Europe’s biggest fossil fuel funders.
• HSBC: Committed to net zero but still funds fossil fuel expansion.
• Lloyds & NatWest: Somewhat better, but still involved in industries with negative environmental impact.

More ethical high street banks:

• Nationwide – A building society rather than a bank, meaning profits go back to members rather than shareholders. Less investment in harmful industries.
• The Co-operative Bank – Has a strong ethical policy, avoiding fossil fuels, arms, and unethical labor practices.
• Building Societies in general (e.g., Coventry, Yorkshire, Skipton) – Less likely to invest in harmful industries due to their mutual structure.

What’s the Best Ethical Banking Option?

If you want absolute transparency and ethical investment, Triodos is the best choice—but its functionality is lacking.

For a mix of ethics and usability, Starling Bank seems to be the best app-based option, though Monzo is also a solid choice.

For those who prefer high street banks, Nationwide and The Co-op Bank are among the best, while Barclays and HSBC should be avoided if you care about the environment.

Final Thoughts

There’s no perfect bank, but some are far better than others when it comes to ethics. I personally use Monzo for daily banking because of its automation features and ease of use, but I’m keeping an eye on Starling if I ever decide to switch.

What about you? Are you willing to sacrifice some functionality for an ethical bank, or do you prefer a balance between the two? Let me know your thoughts!