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How to be More Ethical: Green Banking Products in Australia



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Green banking products help to grow your money and preserve the environment.
Photo by: Micheile on Unsplash.

Green banking products are increasingly the preferred banking solution for Australians. This is because banks are committed to allocating their investments into ethical industries that create positive social impact. The 3 main issues that Australians deemed important when it comes to investment are:

  • Renewable energy (48% agrees)
  • Healthcare and medical products (45% agrees)
  • Sustainable practices (44% agrees).

Up to 47% of Australians avoid investments that degrade the environment. 

In 2017, the Responsible Investment Association Australasia (RIAA) revealed that 22% of Australians are already making conscious decisions to engage with ethical companies, superannuation fund providers and financial institutions to grow their money. This figure is expected to increase due to the 2020 bushfire disaster, which was a wake-up call about the severity of global climate change. 

It doesn’t matter if you are looking for an ethical home loan or a green term deposit, or even just an impactful transaction account for your daily financial expenses. This article is for you. In this article, we will also discuss how green banking products are different from mainstream banking products. 

What are green banking products?

Banking products, in general, are facilities, services and products related to cash management offered by banks to their customers. By going ethical, banks promise to not put money obtained from these products to support unethical industries. Currently, in the market, there are two ways that a bank can go ethical. 

  1. An ethical bank that dedicates the entire investment portfolio to investing in sustainable businesses, for example, Bank Australia 
  2. A retail/commercial bank where it offers green banking products options to its customers, for example, the Green Term Deposits offered by UBank 

To encourage the public to go ethical, some banks offer lower interest rates on loans. As such, customers are more motivated to purchase environmentally friendly goods such as hybrid cars. 

Ethical home loans from Bank Australia: 

Bank Australia had declared responsible investments as the core of their operation. This implies that unethical and unsustainable investments are excluded from their investment portfolios. In other words, Bank Australia only offers green banking products. They ensure that every investment they make can create a positive social impact. 

If you are planning to purchase or build a NatHERS rated 7 star or higher home, then the Clean Energy Home Loan offered by Bank Australia might be the right home loan for you. This loan package offers a 0.20%p.a. reduction on your variable interest rate for the first 5 years of your repayment period. 

Even if you are just considering a property upgrade, you might be eligible to apply for this home loan if you fulfilled the criteria as outlined in this fact sheet

If you are still unsure of your eligibility, contact us today for a free consultation with our experienced mortgage brokers. 

Green term deposits from UBank: 

UBank is a division of the National Australia Bank (NAB). Different from Bank Australia that operates as an ethical bank, UBank provides green banking products options for its customers. One of the products is the Green Term Deposits, which is the first consumer term deposit to be certified by the Climate Bonds Initiative (CBI) to help combat climate change. 

The savings put into this term deposit are then consolidated into an investment pool. UBank channels these investments into sustainable projects such as expanding renewable energy facilities or building sustainable buildings. Unfortunately, at the time of writing, this product is no longer available for new customers. Only existing UBank customers can apply for this product online. 

Impactful transaction accounts from ME Bank: 

If you are considering to transform your daily spending habits ethically, then the pink Buck card is for you. 

ME Bank is a subsidiary of one of the oldest banks in Australia, the Bank of Queensland (BOQ). Its Online Savings Account was the winner of the 2020 Finder Awards due to its attractive rates and lower fees. To make the most out of your savings account, open an Everyday Transaction Account with ME Bank.

When you make more than 4 settled ‘tap-and-go’ purchases in the month on your Everyday Transaction Account, a bonus interest rate applies to balances up to $250,000 on each Online Savings Account you own. 

On top of that, for every purchase made using your pink Buck card, ME Bank donates 1 cent to the National Breast Cancer Foundation (NBCF) to fund research related to breast cancer. 

Ending words:

From something as small as daily spending habits to something as impactful as long-term financial planning, there are so many ways that you can go ethical in your daily life. Here at Benevolence Financial Group (BFG), we are committed to provide you with free, high-quality consultation services. 

Similar to what the banks believe in going ethical, we strive to create sustainable positive social impacts by investing half of our profits to support our charity partners. We make every ethical investment in your name and it is tax-deductible, with zero-cost on you.  

Give us a call today at +61 403 436 379 or book an appointment with us. 

The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.

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