If you want to know which UK banks are funding the fossil fuel industry and the arms trade, here are all the details. I also look at which British banks take a more ethical approach – whether you’re choosing a current account, savings account, ISA, or mortgage.
I never used to think about how banks actually worked. I just popped my money in the bank, paid my bills, saved up, and spent it. That was that. I gave zero thought into exactly what the banks did with my money or how ethical they might be.
Then I found out that how we manage our money can be one of the most impactful environmental things we can do, particularly when it comes to climate change.
Here’s all you need to know about the horrifying things that some big-name banks do with your hard-earned money, and the UK ethical banks that do better. I’ve included as many financial products as I can, so I’ve been able to cover current accounts, savings accounts, ISAs, mortgages, loans, credit cards, and pensions:
Why You Might Want To Switch to An Ethical Bank
You might want to consider switching to an ethical bank because the money that we deposit into our bank account doesn’t just sit in a vault until we need to withdraw it.
Banks use our money that we deposit in our current and savings accounts to fund their other profit-making banking activities – from loans to investments. This means, depending on who you bank with, your money could be funding all sorts of projects that you don’t agree with and don’t necessarily know about.
The UK Banks That Fund The Arms Trade
First up, some banks fund the arms trade and nuclear weapons, allowing these companies to develop more and more lethal weapons.
Ethical Consumer also says many UK banks are financing Israeli settlements, weapons, and military, which contribute to human rights abuses in Palestine. According to Ethical Consumer, this includes :
- Barclays
- HSBC
- JP Morgan Chase
- Lloyds Group
- NatWest Group
- Santander Group
The UK Banks Financing Fossil Fuels
Unfortunately, these aren’t the only unsavoury activities that banks put our money into. Banks also invest our money in environmentally damaging activities, such as the oil and gas industry and tar sands mining.
It’s not small change either. The world’s largest banks gave $869bn (around £650bn) in funding to fossil fuel firms in 2024 alone. And two-thirds of the world’s largest 65 banks increased their fossil fuel financing by $162bn in 2024, compared to the previous year.
Many of these banks are American banks, such as JP Morgan Chase – which owns the digital bank Chase UK. But UK bank Barclays is also listed as a major funder which increased its funding in 2024.
But Barclays isn’t the only UK financier of the fossil fuel industry. A recent report found that UK banks have put £75bn of funding into huge oil, gas, and coal projects between 2016 and 2023.
Alongside Barclays, the other British banks complicit in this funding included:
The UK Ethical Banks To Know
As banks depend on our money to fund these types of investments and to keep them afloat, one of the ways to change this is to switch to a more ethical bank.
Doing so helps to create a fair banking system that works in our interests. Yet surprisingly, a third of people in the UK have had the same current account for over 20 years.
With an increase in UK ethical banks, there’s never been a better time to switch. Here’s my guide to the best UK ethical banks for 2025. From current accounts to savings accounts and mortgages.
Please note this post does not constitute financial advice and is provided for general information purposes only.
Triodos Bank
- Offers: current accounts, savings accounts, ISAs, investment funds, business savings accounts, charity savings accounts.
All about using money as a force for good, Triodos is one of the most ethically minded banks in the UK.
Triodos believes that it’s not enough to avoid funding harmful practices, so it actively supports those building a better tomorrow.
As such, Triodos only lends to businesses and organisations that promote or provide long-term positive change. From wind farms to organic farms, to fair trade enterprises, social housing, or community projects, customers are able to see where their money has gone and what it’s doing via its website.
Cumberland Building Society
Offers: current accounts, savings accounts, and mortgages.
Building societies are more ethical than high street banks because they face stringent regulations that limit the amount of money they can invest in certain industries. Their profits are also invested back into the business for the benefit of borrowers and savers rather than shareholders, giving them that added edge.
Cumberland Building Society is one such building society worth checking out. It uses the savings its customers deposit to lend to people and businesses to buy property in the North West of England and the South West of Scotland.
It doesn’t make investments outside of the UK, it doesn’t make direct investments in stocks and shares and it does not provide funding for fossil fuel projects or companies. This makes it an altogether more sustainable option.
Nationwide
Offers: current accounts (including student accounts), business accounts, savings accounts (including children’s and business savings accounts), ISAs, loans, credit cards, investments, insurance, and mortgages.
If you prefer your money to be backed by a wider High St presence, then another building society worth checking out is Nationwide.
As it’s owned by its members rather than external shareholders, profits are reinvested for customers’ benefit rather than being paid out as dividends. As such, Nationwide does not invest in or provide finance for fossil fuel projects or the arms trade. Plus, it donates at least 1% of pre-tax profits to charitable causes.
Co-Op Bank
Offers: current accounts (including student accounts and accounts for Ukrainian refugees), savings accounts (including children’s savings accounts), ISAs, mortgages, credit cards, loans, and insurance.
The Co-operative Bank has built its reputation on having one of the strongest ethical policies in UK banking.
Since 1992, it has asked its customers which issues matter most, and it uses these values to guide where money is and isn’t invested. This means the bank refuses to fund fossil fuel extraction, the arms trade, or companies that abuse human rights or animal welfare. Instead, it supports organisations with positive social and environmental impacts.
It has, in recent years, been majority-owned by a group of hedge funds and fund managers, which hasn’t sat well with the bank’s ethical angle. However, in January 2025, it was taken over by Coventry Building Society, returning it to mutual ownership.
Monzo
Offers: current accounts, joint accounts, children’s accounts, business accounts, ISAs, investments, pensions, credit cards, and loans.
Monzo, one of the so-called app-based Challenger Banks, is currently a good ethical alternative.
Monzo does not currently make large corporate loans or investments and therefore does not directly fund industries like the fossil fuel industry. However, it is important to bear in mind that Monzo may do so in the future. I have not been able to find any commitment that says that Monzo will not. However, so far, in the 10 years it has been running, Monzo has not funded fossil fuels.
I personally bank with Monzo and really rate it. Monzo, in particular, has changed my outlook on money. You can set up ring-fenced savings pots and savings goals within your current account, and its useful interface gives you much greater control over your money. My link currently offers you up to a £50 joining bonus.
Ecology Building Society
Offers: savings accounts, ISAs, and mortgages.
If you’re looking for somewhere to save your money, then Ecology Building Society savings accounts top the Ethical Consumer’s list of most ethical savings accounts.
Ecology uses your savings to lend exclusively to projects that align with its commitment to sustainability. It specifically does not fund fossil fuels, mining companies, the arms trade, and deforestation, including in the Amazon.
Ecology also provides mortgages for eco homes and similar sustainable developments that have traditionally been difficult to get a mortgage on.
Charity Bank
Offers: savings accounts, business savings accounts, charities, clubs and trusts savings accounts, and loans.
Another ethical place to save is with Charity Bank. It’s a bank with a difference. Not only does the bank lend to charities, but it is a charity itself.
The bank says it has made over 1,400 loans worth over £594 million across a wide range of sectors and causes.
Transparency is key to the bank. Customers can track where money has gone by following projects it has invested in on the website.
Don’t worry, it is fully regulated by the FSCS (Financial Services Compensation Scheme), meaning your savings are guaranteed up to the value of £85,000.
Ethical Pensions
As your pension will most likely be in the hands of your workplace, you may have little control over who your pension is invested with and what it is invested in.
If this is the case, then encouraging your workplace to divest to a more ethical pension scheme is your best way forward. The Make My Money Matter website is a good starting point to find out more.
If you are self-employed and/or have a personal pension, then the good news is you have more autonomy over what you do with your pension.
The bad news is that choosing the right ethical pension can be incredibly complicated. Not only do you need to find a more ethical pension company, but you also need to find an ethical fund to put your money in.
I would really recommend seeking independent financial advice on this one. This is because, as with all investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest.
How Easy Is It To Switch To An Ethical Bank?
If this has inspired you to switch to a more ethical bank, then you’ll be pleased to hear that now is a good time to move your money. This is because you can now reliably switch accounts in just seven days. This is definitely a lot less hassle than it used to be.
Sign Up For The Moral Fibres Substack
Get all the latest articles from Moral Fibres straight to your inbox, once a month, free of charge through Substack. You can also upgrade to be a paid Substack subscriber, where you’ll receive an additional two exclusive articles a month. Sign up now:
