Investment Insurance Banks & Building Societies Mortgages See Mortgages Ethical Comparisons Ethical Money – Mortgages Historically, mortgages were taken out with building societies, but since de-mutualisation, about four out of five mortgages are now provided by either a bank, a life insurer or a specialist mortgage lender. All of the companies examined here offer standard ‘repayment’ mortgages. These include a few of the remaining building societies, some of the major lenders and some companies that offer mortgages with an ethical or ‘green’ conscience. Who gets the money? Mortgages make up most of Britain’s £1 trillion debt mountain. In the course of our lives they are likely to be our single biggest outlay; an outlay that may be indirectly funding some of the most ruthless and destructive business activities. As a result, the mortgage company’s lending policies are as important as the kind of mortgage on offer. The corporate social responsibility reports from banks and corporations have evolved into detailed, elaborate documents, and most banks now make some reference to socially responsible investment. It is easy to be sceptical about how much these flashy PR jobs match up to reality, since the major banks so often provoke condemnation from NGOs around the world. According to Christian Aid (www.christianaid.org.uk), HSBC once marketed a bond issue for two oil companies, Petronas of Malaysia and Talisman of Canada, both of which were major investors in Sudan. A UN special reporter for Sudan said that revenue from international oil companies such as these fuelled the country’s civil war. Barclays’ involvement in the Trans-Thai-Malaysia gas pipeline, and in the Omkareshwar Dam in India, provoked a human rights protest supported by Friends of the Earth (www.foe.co.uk). The bank was accused of failing to uphold the Equator Principles, a code of environmental and social conduct that is designed to prevent organisations from violating human rights through their choice of lending. Green Mortgages Homes are one of the largest sources of carbon dioxide emissions in the UK. While most mortgage lenders offer valuation surveys as part of the mortgage deal, relatively few at this stage are offering specialised environmental surveys. These environmental surveys assess how energy efficient the house is, and give advice on energy saving measures. Currently, the Co-Operative Bank offers this kind of survey free with its green mortgage, as do the Norwich & Peterborough and the Ethical Mortgage Service. The Ecology Building Society currently lends only on properties that give ‘ecological payback’. This translates as houses that it considers to be energy-saving, such as back-to-backs and derelict houses which would otherwise have been abandoned. This strict lending policy means that it won’t be suitable for every person seeking a mortgage. The Norwich & Peterborough offers a carbon-neutral mortgage. For the first five years of each of its Green Mortgages, it will plant eight trees a year. Its leaflet claims that the trees will absorb carbon dioxide to the equivalent of the estimated emissions of the property. It also offers a ‘brown’ mortgage scheme which aims to encourage the renovation and restoration of buildings for residential use. The Co-operative Bank’s green mortgage will ‘pay Climate Care to offset around 20 per cent of an average home’s carbon dioxide production for every mortgage we grant’. It claims that over a 20-year mortgage just under a fifth of an acre of forest would be planted. See Mortgages Ethical Comparisons Finding Advice The Ethical Investors Group is a collaboration between the Ethical Investment Co-operative (a group of independent financial advisors) and consultants called Thirdwave. It offers advice on mortgages from a panel of lenders that it has ethically screened. This panel includes the Skipton, Scottish and Yorkshire Building Societies. Key Research Below you will find links to the key sections of our ethical research in Finance and Money: Banks & Building Societies Insurance Mortgages Investment We have created ethical comparison rankings for the following brands, based on the activities of the company group (see above tables): Ecology BS, Britannia BS, Co-op Bank, Chelsea BS, Ethical Mortgages, Nationwide BS, Yorkshire BS, Coventry BS, Newcastle BS, Norwich & Peterborough, Leeds BS, Skipton BS, AIB, Bank of Ireland, Clydesdale Bank, First Direct, Halifax, HSBC, ING Direct, Lloyds TSB, Natwest, Northern Rock, Royal Bank of Scotland, Yorkshire Bank, Santander, Woolwich. Disclosure: Some of the links above are affiliate links, meaning we earn commission if you click through and make a purchase. Placement and use of these links has no bearing in terms of the ethical scores that we give to a brand. All commission earned by The Good Shopping Guide is re-invested into the research carried out by The Ethical Company Organisation.