A recent analysis by consumer advocate group Which? has placed some of the UK’s largest high-street banks in a concerning “red” warning category based on their fossil fuel investments and environmental policies. Out of 13 leading current account providers, only three earned the coveted Which? Eco Provider badge.
The study, which surveyed 1,463 Which? members in January, revealed that 69% considered opening an account with a sustainable bank as the least important way to address climate change. However, the research highlighted that the 60 largest banks globally invested a staggering $669 billion into the fossil fuel industry in 2022, with many UK high-street banks among the top contributors.
Banks, including JPMorgan Chase, Santander, Barclays, HSBC, NatWest, and Lloyds, found themselves in the “red” category following an analysis of their fossil fuel policies by Which? and non-profit research organisation Reclaim Finance. Weak policies and statements on agricultural commodities such as beef, soy, timber, and palm oil contributed to their classification.
The analysis considered various factors, including financing methods, policies, promises, transparency levels, and credible targets to reduce exposure to environmentally damaging sectors. Notably, Lloyds and NatWest, both labeled as “red,” were found to be less involved in these sectors than their peers.
In contrast, Nationwide, The Co-operative Bank, and Triodos were distinguished as the only three banks to receive the Which? Eco Provider badge. These banks demonstrated no exposure to fossil fuels in their banking activities, emphasising their commitment to environmentally friendly practices.
The report highlighted specific details about each “red” bank’s performance. JPMorgan Chase, despite being labeled “red,” announced ambitious plans to invest $1 trillion in green initiatives by 2030. Santander acknowledged emission reduction targets for 2030 across various sectors, while Barclays set 2025 targets for power and energy and invested over £87 billion in green finance since 2018. HSBC, a major fossil fuel backer, pledged to cease funding coal expansion.
NatWest has taken steps to reduce exposure and set emission reduction targets aligned with the Paris Agreement. Lloyds, with minor exposure to fossil fuels compared to peers, is actively working on credible transition plans with oil and gas clients.
Consumers seeking more sustainable choices are urged to consider switching to Eco Providers, where banks like Nationwide, The Co-operative Bank, and Triodos demonstrate impressive green credentials by avoiding investments in coal, oil, or gas. Sam Richardson, Deputy Editor of Which? Money, emphasised the role of consumers in driving positive change for the environment through their banking choices.
