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Economy

Fair finance, the new fair trade?

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People that save with ethical banks are challenging the practices of the banking industry just as fair trade visionaries flagged up injustices within global trade, states Patrick Crawford, CEO of Charity Bank. Except this time, it’s about personal finance not chocolate bars.

Increasingly, people are looking for beacons of light in the opaque world of a banking industry that has been tainted by scandal.

It all started in the 60s

The fair trade movement started with the ‘solidarity traders’, groups who took inspiration from the Anti-Apartheid Movement’s boycott of South African goods, and the charity activists of the 60’s who sold fair trade coffee to committed supporters.

Since then fair trade has grown into a globally recognised label that makes it possible for people to put a chocolate bar in their shopping basket knowing ­­that the farmer who grew the cocoa beans has been treated fairly.

Fair trade has come to stand for a ‘consumer’ reaching out across the globe to the ‘producer’ to work towards a fairer system of trade. Chief executive of Fairtrade International Harriet Lamb describes it as a “quiet revolution in our shopping baskets”, a way of putting justice into unfair trade “step by step, product by product.”

Finding alternatives to unethical banking

It’s a sign of our times that people are beginning to look at personal finance and savings in the same way. Just as people realised that what they paid for a chocolate bar could be funding abuses of farmers, now more and more people are discovering that the money they save with a bank might be used to fund activities they wouldn’t dream of endorsing, from producing fossil fuels to funding the arms trade.

Like fair trade, the roots of the movement can be traced back to the charity sector where alternative views of the world thrive. Charities and social enterprises were some of the first to begin saving with ethical banks. They looked for banks that shared their values and their ethical standards.

Now just as parents can buy fair trade chocolate for their children, they can set up ethical bank accounts for them.  Parents, grandparents, couples and individuals are starting to move their money, so that they can have more control over where it goes and what it does.  In 2014 there was £862 million saved with ethical banks, Charity Bank, Triodos UK and the Ecology Building Society, up from £684 million in 2013.

It’s not about dreamy visions

Like fair trade, fair finance is not about dreamy visions. It’s about alternatives to a banking system run for profit that struggles to make finance work for people that are poor or disadvantaged.

Ethical savers might not get the highest rates on the market, but they can still earn a fair return, see their money do good and demand that banks take their obligation to society and the environment seriously.

Fair finance: the ethical banks

Charity Bank: offers savings accounts and makes loans to charities and social enterprises using the money that savers entrust to it.

Ecology Building society: offers savings accounts and sustainable mortgages for properties and projects that respect the environment, funded through a range of simple, transparent savings accounts.

Triodos Bank: offers savings and finances organic food and farming businesses, renewable energy enterprises, recycling companies and nature conservation projects.

Patrick Crawford is the Chief Executive of Charity Bank, he joined as Chief Executive in November 2012 and was appointed Board Executive Director in January 2014.

This article is part of our crowdfunder reward for Charity Bank’s generous support in 2014.

Photo: Charity Bank

Further reading:

Charity Bank: social sector gaining confidence to borrow

Charity Bank first European bank to achieve B Corporation certification

Charity Bank drops charity status and sets sight on sustainable growth

The Guide to Sustainable Banking 2013

Economy

Report: Green, Ethical and Socially Responsible Finance

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“The level of influence that ethical considerations have over consumer selection of financial services products and services is minimal, however, this is beginning to change. Younger consumers are more willing to pay extra for products provided by socially responsible companies.” Jessica Morley, Mintel’s Financial Services Analyst.

Consumer awareness of the impact consumerism has on society and the planet is increasing. In addition, the link between doing good and feeling good has never been clearer. Just 19% of people claim to not participate in any socially responsible activities.

As a result, the level of attention that people pay to the green and ethical claims made by products and providers is also increasing, meaning that such considerations play a greater role in the purchasing decision making process.

However, this is less true in the context of financial services, where people are much more concerned about the performance of a product rather than green and ethical factors. This is not to say, however, that they are not interested in the behaviour of financial service providers or in gaining more information about how firms behave responsibly.

This report focuses on why these consumer attitudes towards financial services providers exist and how they are changing. This includes examination of the wider economy and the current structure of the financial services sector.

Mintel’s exclusive consumer research looks at consumer participation in socially responsible activities, trust in the behaviour of financial services companies and attitudes towards green, ethical and socially responsible financial services products and providers. The report also considers consumer attitudes towards the social responsibilities of financial services firms and the green, ethical and socially responsible nature of new entrants.

There are some elements missing from this report, such as conducting socially responsible finance with OTC trading. We will cover these other topics in more detail in the future. You can research about Ameritrade if you want to know more ..

By this report today: call: 0203 416 4502 | email: iainooson[at]mintel.com

Report contents:

OVERVIEW
What you need to know
Report definition
EXECUTIVE SUMMARY
The market
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
The consumer
For financial products, performance is more important than principle
Competition from technology companies
Financial services firms perceived to be some of the least socially responsible
Repaying the social debt
Consumer trust is built on evidence
What we think
ISSUES AND INSIGHTS
Creating a more inclusive economy
The facts
The implications
Payments innovation helps fundraising go digital
The facts
The implications
The social debt of the financial crisis
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Ethical financial services providers: A question of culture
Investment power
Consumers need convincing
The transformative potential of innovation
Consumers can demand change
PUTTING FINANCIAL SERVICES IN AN ETHICAL CONTEXT
An ethical economy
An ethical financial sector
Ethical financial services providers
GREEN, ETHICAL AND SOCIALLY RESPONSIBLE ISSUES IN FINANCIAL SERVICES
The role of investing
Divestment
The change potential of pensions
The role of trust
Greater transparency informs decisions
Learning from past mistakes
The role of innovation
Payments innovation: Improving financial inclusion
Competition from new entrants
The power of new money
The role of the consumer
Consumers empowered to make a change
Aligning products with self
THE CONSUMER – WHAT YOU NEED TO KNOW
For financial products, performance is more important than ethics
Financial services firms perceived to be some of the least socially responsible
Competition from technology companies
Repaying the social debt
Consumer trust is built on evidence
Overall trust levels are high
THE ETHICAL CONSUMER – SOCIALLY RESPONSIBLE ACTIVITIES
Payments innovation can boost charitable donations
Consumer engagement in socially responsible activities is high
Healthier finances make it easier to go green
SOCIALLY RESPONSIBLE COMPANIES
37% unable to identify socially responsible companies
Building societies seen to be more responsible than banks….
….whilst short-term loan companies are at the bottom of the pile
CONSUMER TRUST IN THE BEHAVIOUR OF FINANCIAL SERVICES COMPANIES
Overall trust levels are high
Tax avoidance remains a major concern
The divestment movement
Nationwide significantly more trusted
Trust levels remain high
CONSUMER ATTITUDES TOWARDS GREEN AND ETHICAL FINANCIAL PRODUCTS
For financial products, performance is more important than principle
Socially conscious consumers are more concerned
CONSUMER ATTITUDES TOWARDS TRANSPARENCY
Strategy reports provide little insight for consumers
Lack of clarity regarding corporate culture causes concern
Consumers want more information
THE ROLE OF FINANCIAL SERVICES FIRMS IN SOCIETY
The social debt of the financial crisis
THE SOCIAL RESPONSIBILITIES OF FINANCIAL SERVICES FIRMS
For consumers, financial services firms play larger economic role
Promoting financial responsibility
CHALLENGER COMPANIES AND SOCIAL RESPONSIBILITY
Consumer trust is built on evidence
The alternative opportunity
The target customer

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Economy

A Good Look At How Homes Will Become More Energy Efficient Soon

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energy efficient homes

Everyone always talks about ways they can save energy at home, but the tactics are old school. They’re only tweaking the way they do things at the moment. Sealing holes in your home isn’t exactly the next scientific breakthrough we’ve been waiting for.

There is some good news because technology is progressing quickly. Some tactics might not be brand new, but they’re becoming more popular. Here are a few things you should expect to see in homes all around the country within a few years.

1. The Rise Of Smart Windows

When you look at a window right now it’s just a pane of glass. In the future they’ll be controlled by microprocessors and sensors. They’ll change depending on the specific weather conditions directly outside.

If the sun disappears the shade will automatically adjust to let in more light. The exact opposite will happen when it’s sunny. These energy efficient windows will save everyone a huge amount of money.

2. A Better Way To Cool Roofs

If you wanted to cool a roof down today you would coat it with a material full of specialized pigments. This would allow roofs to deflect the sun and they’d absorb less heat in the process too.

Soon we’ll see the same thing being done, but it will be four times more effective. Roofs will never get too hot again. Anyone with a large roof is going to see a sharp decrease in their energy bills.

3. Low-E Windows Taking Over

It’s a mystery why these aren’t already extremely popular, but things are starting to change. Read low-E window replacement reviews and you’ll see everyone loves them because they’re extremely effective.

They’ll keep heat outside in summer or inside in winter. People don’t even have to buy new windows to enjoy the technology. All they’ll need is a low-E film to place over their current ones.

4. Magnets Will Cool Fridges

Refrigerators haven’t changed much in a very long time. They’re still using a vapor compression process that wastes energy while harming the environment. It won’t be long until they’ll be cooled using magnets instead.

The magnetocaloric effect is going to revolutionize cold food storage. The fluid these fridges are going to use will be water-based, which means the environment can rest easy and energy bills will drop.

5. Improving Our Current LEDs

Everyone who spent a lot of money on energy must have been very happy when LEDs became mainstream. Incandescent light bulbs belong in museums today because the new tech cut costs by up to 85 percent.

That doesn’t mean someone isn’t always trying to improve on an already great invention. The amount of lumens LEDs produce per watt isn’t great, but we’ve already found a way to increase it by 25 percent.

Maybe Homes Will Look Different Too

Do you think we’ll come up with new styles of homes that will take off? Surely it’s not out of the question. Everything inside homes seems to be changing for the better with each passing year. It’s going to continue doing so thanks to amazing inventors.

ShutterStock – Stock photo ID: 613912244

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