Our toolkits curate in-depth content on a particular legal theme or topic. [2] With changing social demands, and as more is known about the effects that banks can have through their lending policies, banks have begun to feel pressure from the general public, NGOs, governments, regulatory bodies and others to consider their social and environmental impact.[3]. Examples include an evaluation of the energy efficiency of a home and potential improvements in this; carbon-offsets;Coro Strandberg 2005 credit cards that benefit charities[4] or lower interest rate loans for low emission cars.[5]. Download. Even when given the opportunity to view an accountability report it is difficult to truly understand what their screening processes are. Unreliable citations may be challenged or deleted. The sample was taken purposively. You are using an outdated browser. External ethics are concerned with the wider ramifications of banks actions. Explore our blogs for the latest news and insights across a range of key legal topics. [9] It is currently made up of 27 of the world’s leading sustainable banks, from Asia, Africa, Latin America to North America and Europe. To help you navigate and control risk in a challenging legal landscape, we have collated a range of key advice and guidance. Most credit unions lend strictly to people and businesses in the community where the union is located. Credit unions focus on the members because they are also the owners, and on the communities in which they are situated. Lawmakers, regulators and society have defined certain minimum expectations and standards of behaviour from the perspective of customer and business outcomes. However, a clearer movement has emerged since the 1990s. Banks may be able to support progress toward sustainability by society as a whole—for example, by adopting a ‘carrot-and-stick’ approach, where environmental and social front-runners would pay less interest than the market price for borrowing capital, while environmental laggards would pay a much higher interest rate.Jeucken & Bouma 1999 Banks can also develop more sustainable products, such as environmental, social, or ethical investment funds. With this knowledge one could propose that the act of lending money is not in and of itself immoral and according to Kant's perspective banks should not be judged as moral or immoral based on the outcomes of their lending. This resource synthesises the many information points which exist and is structured around four core themes to enable firms to ask challenging questions and check that relevant minimum standards and their own ethical expectations are being met. It is arguable whether or not performing a triple bottom line analysis (an analysis that takes into account environmental, social, and financial performance) would be any more intrusive. [7], Rudolf Steiner suggested that capitalism has the task of funding economic initiatives; capital should be directed into directions productive for society. This statement does not give the reader the information they needs to understand the criteria used in assessing clients. Ethical banks excel in community involvement, as do other financial institutions such as credit unions. Leadership, governance, systems and controls. However the second formulation of Kant's categorical imperative states: "act in such a way that you always treat humanity, whether in your own person or in the person of any other, never simply as a means, but always at the same time as an end" (pg.