- New research reveals extent of greenwashing in cash and investment ISAs, as well-intentioned consumers are unaware of their financial providers’ poor environmental standards
- The majority of people that consider themselves to be ‘green’ investors actually have their money with providers ranked as ‘worst’ for the environment by Ethical Consumer magazine
- 6 in 10 consumers are concerned about greenwashing, and are willing to switch providers if banks fall foul of upcoming anti-greenwashing rules from the FCA
New research from Triodos Bank UK reveals the extent to which greenwashing is influencing consumers’ decisions to open ISAs, as well-intentioned savers and investors are unaware of their financial providers’ poor environmental standards.
Ahead of the April tax year refresh, when many consumers will be choosing new Individual Savings Accounts (ISAs), Triodos has released new analysis combining consumer polling with independent ratings of financial services providers from Ethical Consumer, the UK's leading alternative consumer organisation.
Providers of cash savings and stocks and shares ISAs are analysed by Ethical Consumer on a number of environmental issues, including those that invest in harmful sectors such as fossil fuel extraction or deforestation, with each provider given a rating from ‘best’ to ‘worst’.
The analysis shows that the majority (55%) of people that have a stocks and shares ISA with a provider classified as ‘worst’ in Ethical Consumer’s ratings incorrectly think that their money is in a ‘green’ ISA.
Moreover, 52% of investors that were influenced to choose their ISA based on sustainability credentials actually have their money in providers classed as ‘worst’ for their environmental impact – suggesting the impact of greenwashing in leading well-intentioned consumers to providers that continue to fund areas that are fuelling climate change and harming the planet.
Greenwashing also persists in savings accounts, as 50% of cash ISA holders with a ‘worst’ provider think that their money is in a green ISA, and 44% say they were influenced to choose their cash ISA based on these providers’ perceived sustainable credentials.
Findings at odds with consumer values
These findings are largely at odds with the environmental values of UK consumers, as one in two people believe that banks should not be investing in fossil fuel expansion (47%), a figure that rises to the majority (57%) of 18–34 year olds. Half of consumers also don’t believe a fund or savings account can be classed as ‘sustainable’ if it includes fossil fuel companies – even those that also invest in renewables (49%).
Yet, despite this, the findings show a disconnect in public engagement with how banks are truly using people’s money. Despite valuing sustainability, the majority of savers and investors (55%) don’t know if their money is being used in an environmentally friendly way by their ISA provider.
Roger Hattam, Director of Retail Banking at Triodos Bank UK, commented: “These findings demonstrate the worrying truth about how well-intentioned consumers are being misled about how their money is being invested. In an industry dominated by opaque sustainability marketing, we have long advocated for much higher transparency – which is why the upcoming FCA anti-greenwashing rules are so desperately needed. There are millions of consumers wanting their money to align with their values, but this is not yet matched with real industry commitment to clearly signpost what causes their money is actually supporting.
“As well as actively screening out negatives – such as never investing in fossil fuel companies – to truly invest in people and the planet, banks need to actively fund areas that are changing the world for the better. At Triodos, we have led this charge and set the standard for using our customers’ money to drive positive change, whether through funding renewable energy, nature conservation or community-run housing.”
Consumers welcome upcoming FCA changes
UK savers and investors are keenly aware of and cautious about greenwashing, as six in 10 consumers (59%) say they are concerned about this in the financial services industry.
Yet only 10% of consumers are aware of upcoming new rules from the Financial Conduct Authority (FCA) that aim to improve the trust and transparency of sustainable financial products and minimise banks and financial providers misleading consumers through greenwashing.
That said, two-thirds of people (66%) think that the new rules are needed and will be helpful to consumers, while over half (54%) would be motivated to switch financial providers if they knew that their current bank had broken the anti-greenwashing rules – a figure that rises to 61% of consumers aged 18-54.
The younger generations are also more likely to be sceptical of their financial providers’ sustainable claims, as over a third (36%) of 18-54 year olds think that their provider would be likely to fall foul of the rules – compared to just 10% of over 55s.
Ruairidh Fraser, Writer and Researcher at Ethical Consumer, said:"It’s good to see that public awareness around greenwashing is increasing, and savers are rightly sceptical about financial providers’ sustainability claims. This makes it all the more shocking that so many savers are still being wilfully misled by companies that continue to profit from environmentally destructive investments.
“It’s therefore crucial that consumers look beyond the ‘sustainable’ branding of a particular fund, and instead demand that providers withdraw fossil fuel investments from their whole portfolios. Triodos’ survey shows that ethical investing is not a niche concern. With improved transparency standards and anti-greenwashing regulation we can ensure that it becomes the norm.
“Triodos reliably sits at the top of our finance rankings, and is one of very few banks that holds our Best Buy status. With robust ethical lending criteria and detailed information online about all its loans, Triodos’s commitment to ethical lending and investment remains unrivalled in the sector.”
Triodos has been operating with a focus on sustainable finance for over 40 years, and has been recognised as ‘stand-out Best Buy’ for banking by Ethical Consumer magazine for its personal current accounts and savings accounts.
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Notes to editors
Important information
Capital in any investment product is at risk. The value of an investment may go down as well as up and investors could lose some or all of their money. Currency fluctuations may also affect the value of a Triodos Stocks & Shares ISA. As with all ISAs, the tax benefits depend on individual circumstances, and tax rules may change. The total annual ISA allowance is £20,000, which can be split across different types of ISAs.
None of the information in this press release constitutes financial advice. If potential investors are unsure if these investments are right for them, they should contact an Independent Financial Adviser.
For further information and to arrange interviews please contact:
Julia Bush, Greenhouse Communications: [email protected]
About the research
Opinium Research was conducted by Opinium Research on behalf of Triodos Bank. 2,000 UK adults with an Independent Savings Account were surveyed. Polling took place 19th - 23rd February 2024.
About Ethical Consumer’s methodology
Ethical Consumer’s methodology aims to provide a holistic ethical rating of a whole company, rather than just a particular brand or product. The providers in this research were assessed on their approaches across five broad categories: the environment, people, animals, politics and sustainability. Companies lost marks where inadequate policy or evidence of bad practice was found, and positive marks were awarded for transparent and ethical policies.
Our finance-specific ratings rewarded providers that had disclosed their holdings and investments, and that had developed formal, public, ethical policies to constrain their lending and investment decisions. For example, we deducted marks for financial providers that did not restrict lending and investment to particularly problematic sectors, such as fossil fuels and arms and military supply, across their whole portfolios. We also assessed each company on their approach to carbon management, environmental reporting, tax conduct, lobbying, executive remuneration and more.
Ethical Consumer’s research is compiled from a wide range of primary and secondary sources. We request information directly from the companies we rate, and assess their policies. We also incorporate published research from reputable campaign groups, as well as other news sources, public records and directories.
About Triodos Cash ISAs
In 2022, Triodos Bank UK was awarded the coveted ‘Best Buy’ status by Ethical Consumer magazine for its savings accounts. Triodos was recognised for its transparency and positive investment strategy, which Ethical Consumer noted were ‘stand-out’ and ‘market leading’.
- Instant access account
- 3.45% tax-free / 3.48% AER
- Open with as little as £10
- Fixed interest rate for two years
- 4.00% tax-free / AER
- Open with as little as £1
About Triodos Stocks & Shares ISA
Triodos Bank’s Stocks & Shares ISA is recognised as a ‘Best Buy’ by Ethical Consumer magazine. Four impact investment funds are available through the Stocks & Shares ISA – the Triodos Pioneer Impact Fund, the Triodos Global Equities Impact Fund, the Triodos Sterling Bond Impact Fund and the Triodos Future Generations Fund. The funds are managed by Triodos Investment Management, part of Triodos Bank.
Triodos Investment Management publishes a list of all companies in each fund's investment portfolio, for total transparency. All the investments in the funds have been hand-picked by impact investing experts using a themed approach, which ensures they have a positive impact on society and the environment.
Stocks & Shares ISAs - A choice of four impact investment funds:
- Triodos Global Equities Impact Fund
- Invests in large listed sustainable companies
- Portfolio includes: Shimano, Central Japan Railway, Danone, Vestas Wind Systems
- Triodos Pioneer Impact Fund
- Invests in small and medium sized innovative companies
- Portfolio includes: DS Smith, First Solar, Nordex
- Triodos Sterling Bond Impact Fund
- Invests in corporate, green and social bonds alongside UK government gilts
- Portfolio includes: United Utilities Water, East Japan Railway
- Triodos Future Generations Fund
- Invests in small and medium-sized listed companies that contribute directly to the wellbeing and development of children
- Portfolio includes: OrthoPediatrics, Stride, Sobi
About Triodos Bank
Founded in 1980, Triodos Bank has become a frontrunner in sustainable banking globally. As an independent bank that promotes responsible and transparent banking, it does not see any conflict between a focus on people and the planet and a good financial return. Instead it believes that they reinforce each other in the long-term.
Triodos Bank has banking activities in the Netherlands, Belgium, the UK, Spain and Germany as well as Investment Management activities based in the Netherlands but active globally. Triodos Bank co-founded the Global Alliance for Banking on Values (GABV), a network of 70 sustainable banks. Together these banks want to grow sustainable banking and its impact on the real economy substantially.
About Ethical Consumer
We are an independent, not-for-profit, multi-stakeholder co-operative with open membership, founded in 1989 and based in Manchester.
For over 30 years we have been the hub of the ethical consumer movement, helping consumers to shop ethically, campaigners to challenge corporate power and businesses to improve their supply chain. Our mission is to make global businesses more sustainable through consumer pressure.
Ethical Consumer provides the tools and resources individuals need to make simple, informed and effective choices, offering more than 200 personalised shopping guides as well as providing research and consultancy for businesses and organisations.
Triodos Bank UK Ltd is a wholly owned subsidiary of Triodos Bank NV. Registered Office: Deanery Road, Bristol, BS1 5AS. Registered in England and Wales Company No. 11379025. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 817008. VAT reg no 793493383.
This financial promotion has been issued by Triodos Bank UK Ltd. Registered Office: Deanery Road, Bristol, BS1 5AS. Registered in England and Wales with registered number 11379025. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 817008.