Tackling ESG and making sustainable financial decisions

ESG credentials are considered to be ‘very important’ by charities when making a decision on who to bank with as stated by 25% of charities (Charity Finance, May 2024).

Environmental Social Governance (ESG) is a measure of success for businesses around the world. It's a framework that looks beyond financial data to consider the impact a business has on the environment and on wider society.

Why it's important?

• It is a lens the Bank is being viewed through by our regulators, by investors and, most importantly, by our customers.
• For us, our ESG performance and the ratings we receive from ESG risk rating agencies affect our credibility as the original ethical bank. In 2025, we were rated as the UK's best Environmental, Social and Governance (ESG) high street bank by Sustainalytics.*

Making positive sustainable financial decisions

Where charities, small businesses and individuals choose to bank and invest their money significantly influences their social impact and carbon footprint. This should be a key consideration when developing an ESG strategy, and can often make one of the most significant impacts to ESG.

In 2021, research conducted by The Co-operative Bank revealed that over a third of UK adults (37%) would consider switching to a banking provider with stronger ethical and social credentials. Despite this, only 15% of UK adults currently know what their banking provider's ESG rating is.

From an ethical perspective, sustainable finance means the following:

• Taking social and environmental factors into account when making investments or financial decisions.
• Growing constantly without harm to the planet.
• Reducing the devastation of climate change and in future generations, bridging the gap with more vulnerable groups.

Three key areas to consider when making sustainable financial decisions:

Challenge your financial decisions and consider if you could use a more sustainable finance solution.

Explore some of the sustainable finance options which may be available to you with your finance partners. We can offer lending solutions for the implementation of renewable energy technologies.

Research what the financial institutions you work with are doing with your money to ensure you're not funding activities that conflict with your values and ethics, and contributing unknowingly to, for example, deforestation or arms trades.

How we can help?

We understand charities and not-for-profit sectors with 1/3 of our customers in these sectors alone. Click to download presentation slides to discover simple ways to improve ESG, to writing your own Ethical Policy, as well as understanding the key challenges faced in the charity sector and how we can help.

*Rated by Morningstar Sustainalytics in the Regional Banks sub-industry with a score of 11.2 as of 14 January 2025.