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Conscious investment

If you care about how your bank uses your ISA money, you're not alone

If you care about how your bank uses your ISA money, you're not alone

Research commissioned by Triodos Bank suggests that savers and investors do care about what their bank does with their money and have some clear preferences around which activities they don’t want to support.

Triodos Bank recently conducted research around ISA savers and investors and found that more than a third of investors would not invest in a particular company, fund or pension if they knew it to be involved in non-renewable energy – an increase of six per cent since October 2014.

Top of this year’s list of offensive energy investments was fracking/shale (25%), followed by nuclear (18%) and oil and gas (15%), and more than one in ten said they would actually remove investments they had in these industries over the next year, quadrupling to 40% in the 18-34 age group.

“We believe money can and should be used to address issues we face including environmental problems.”

Huw Davies, head of personal banking, Triodos Bank

The poll also found that 38 per cent of investors would consider opening a green ISA – one that invests only in green or sustainable sectors, such as recycling or nature conservation – if one was available.

divestmentcrop

FOSSIL FUEL DIVESTMENT We asked people with pensions and investments if they plan to divest from fossil fuels in the next 12 months. The majority (40%) didn’t know if their portfolio is invested in fossil fuels or not and more than a quarter (27%) said they don’t have any investments in fossil fuels. 13% planned to divest, rising to 39% for 18-34 year-olds.

Huw Davies, head of personal banking at Triodos Bank says: “We do not lend to or invest in fossil fuel companies. We are completely transparent about what it we do with our customers’ money and we believe it can and should be used to address issues we face including environmental problems.”

We also found that when it comes to our children’s savings and investments, we are even more concerned about what providers are doing with the money, with 46 per cent of parents saying the activities in which their child’s savings is involved in is of more concern than the rate; only a quarter said the rates were top priority.

“Parents tend to be more discerning, more focused on environmental and ethical issues because they know their actions today will directly impact on their own children.”

Huw Davies, head of personal banking, Triodos Bank

childrenscrop

CHILDREN’S SAVINGS Of those questioned that have opened a savings account for a child, nearly half (46%) said they consider what activities their child’s money will be invested in before thinking about the financial return. A quarter considered the financial return before the impact of the investment, and 16% looked at both equally.

“When you are saving on behalf of your children, you start to take a different approach to investing. Parents tend to be more discerning, more focused on environmental and ethical issues because they know their actions today will directly impact on their own children,” continues Huw.

“We believe parents should encourage children to save for the future and also educate them about how their savings can be used to make a positive change in the world they’ll grow up in.So, three years ago, we launched the UK’s first ethical Junior Cash ISA to give parents and grandparents the option of saving ethically for the next generation.”

“A lack of awareness of how money may be used by banks may mean many investors are actually supporting industries they are ethically opposed to through their ISAs and other investments.”

Huw Davies, head of personal banking, Triodos Bank

But while the majority of investors say they would be concerned or even take action if their money or their children’s was being used to support unethical activities, more than a third (34%) of savers don’t actually know what their financial providers are doing with their money. And, even though 86% say they would switch providers if their stock and shares ISAs were investing in anything unethical, actual switching rates are lower – only 39% have ever switched ISA.

Huw concluded: “There’s strong demand from investors to support more sustainable sectors, and also to divest from sectors like non-renewable energy, especially from the younger generations. However, a lack of awareness of how money may be used by banks may mean many investors are actually supporting industries they are ethically opposed to through their ISAs and other investments.”

photo: 350.org   words: Rachel Mason

 

Tax-free sustainable savings

Triodos offers the most comprehensive range of ethical cash ISAs in the UK – including our Ethical Junior Cash ISA and Fixed Rate ISAs. And our Stocks and Shares ISA offers the opportunity to invest in large listed companies or smaller pioneers through our socially responsible investment funds. As well as a tax-efficient return on your savings and investments, your money will be helping to finance organisations at the heart of a more sustainable economy. Visit our website to find out how you can make the most of your annual tax-free ISA allowance, including how to top-up or transfer your existing ISA and full details of our range of ISAs. The benefit to you of the favourable tax treatment for ISAs depends on your individual circumstances and may vary in the future.

 

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