Is Monzo an ethical bank? Kinda…
If you’re like me, you want to both have an easy to use banking Fapp and a bank that is good for the planet. Is that so much to ask?
Although I’ve been with Monzo for two years now and have often wondered about how ethical they are, I haven’t done anything more than a preliminary search before taking part in The Tools for Regenerative Renaissance course.
Included in this week’s reading was How to stop funding fossil fuels by moving to an ethical bank (Extinction Rebellion, 14m read — especially the 5 Steps to Positive Action).
So I thought it was time to finally get to myself a proper answer.
Let’s quickly first review the info that’s out there. Monzo has been verified as ‘an ethical bank’ but the explanation lies behind a paywall. There is no agreed definition of ethical banking across different organisations, but Ethical Consumer mention tax avoidance; transparency, having clear policies, and (most importantly to me) financing and investments, which includes topics like climate change, human rights abuses, and environmental breakdown.
However, other websites believe Monzo are not all they’re cracked up to be. For example, Money Expert don’t class them as fully ethical, although they don’t explain why either.
Nor do New Money.
Monzo’s ethics statement says that some money stored in current accounts is used to give personal loans. So far, so good.
However, Monzo’s Saving accounts operate via third party banks. (Just to be clear, it’s not a saving pots that you can rename yourself to help save for a specific purpose; it’s one of the ones that earn interest including the Easy Access Saver, Flexible ISA, Fixed Term and other options.
So following the guidance from the How to stop funding fossil fuels by moving to an ethical bank article, I decided to contact Monzo themselves. They provided me with ‘some info and links to the ethics/values statements for this third party banks: Paragon, Shawbrook, OakNorth, and Investec.
Shawbrook uses deposits to provide loans and mortgages. OakNorth invests in small-to-medium sized businesses and Paragon invest in British only. But that doesn’t tell me anything about what industries those businesses are in or how they operate, and I don’t believe the niceties of values and ethics which they can be simple aspiring to — not actually achieving.
But given that you can opt in to putting your money in these banks which I don’t plan to do, I’m not going to research them further. I strongly encourage you to dive deeper if you want to make sure you’re money is being used to create the world you want to see… or at least not to destroy it.
However, Investec’s Corporate Responsibility Report (relevant pages are 12, 42–45, and 55) shows that Investec do invest in fossil fuels: “Last year 88% of their energy portfolio was clean energy.” You can’t pull a fast one on me with the ol’ positive framing trick!
Monzo do not currently offer savings accounts with Investec, but there are a number of Monzo customers who already have them, and Monzo do plan to offer them in the future. So I’m going to tell Monzo I’m disappointed that they offer savings accounts that invest in fossil fuels.
So are Monzo ethical? From what I can see, the bank themselves are not directly doing anything dodgy with their customer’s money. But they are offering saving accounts via third party bank that do invest in fossil fuels. And this is only what I found out from about an hour of research.
So if you have a Monzo current account you can avoid destroying the earth, ecosystems and all that we hold dear (only being ever so slightly flippant here). But many Monzo customers may end up doing just that if they don’t research the third party banks offering the savings accounts.
Why can’t you make it easy for us Monzo?
