Imagine a world where you had full democratic power over what happened with your money. Where you totally trusted your bank because you knew for a fact that their interests were the same as yours, equally invested in furthering the community and the planet. This ‘utopic’ vision is not only possible, it is happening, working, and if you ask me, the way of the future.
Divesting – what is it?
Divestment is a concept I learnt about through a campaign run by 350.org, encouraging Australian consumers to reconsider their choice of superannuation provider, among other things. Basically, there is a high chance that the institutions who you are investing your money with (banks, superannuation funds, bonds, even local government), are trading in stocks which yield high capital but don’t cut the mustard as far as sustainability and social ethics are concerned (read: fossil fuels, arms, tobacco, alcohol, junk food et al). The problem is, it’s pretty hard to be part of society these days without being involved with some form of financial institution (you can’t necessarily demand to be paid in cash by your employer then stash said cash in your mattress, for example). But it is possible take more care in which institutions we invest with and, in turn, what businesses and organisation they are funding.
After investigating what the campaign had to say and doing further research into what my current super fund was up to, I was sold and the process of changing over to Australian Ethical Super was incredibly efficient. You put in your details and they essentially manage the transition for you. In a climate where recent studies and polls are showing a growing public mistrust of financial institutions, and where unethical investments are coming back into the public awareness to cause havoc, so as far as I can see the time for change is nigh. You would think that with such an increase in mistrust, people would be lining up to close down accounts and seek out alternatives, but it seems lack of knowledge, apathy, fear of the unknown and even long-time brand loyalty get the better of us.
Co-op banking in Spain
While I was in Barcelona, I caught word of a relatively new institution doing things differently, Fiare Banca Etica. I met up with one of the founding members to talk about how and why they are operating in the murky and sometimes intimidating financial industry.
Fiare was born from the desire of several third sector organisations from the Basque country in Spain, who were looking for a bank that would better represent them and their goal of a solidarity and social economy. Their mission was to form a bank that helps the solidarity and social economic movement to grow by using the money invested by members and earned from their loans to fund projects with that aim. The pillars of the business are:
- Transparency – from publishing all projects invested in to employee salaries, making sure members are up to date on the bank’s movements is essential to cultivating trust and promoting worthy projects
- Democratic and cooperative ownership – internal stakeholders and decision makers are elected members of the bank, with all projects going through a vetting process that analyses not only the economic but also ethical viability
- Existing as a profit-for-purpose business – the key here is that capital is needed to further ideas that aim to improve the world we live in, so although making profit is an essential part of the business (though certainly not the main goal), the profits are funneled directly back into ethical investments, as opposed to into stakeholders’ pockets
While Fiare agree they have reservations about the financial situation as it stands, with its sole purpose of increasing capital, they realise that the world can’t be changed by running off to an off-grid commune where they trade among themselves – it’s a lovely idea, but it won’t effect the scale of change that they are interested in. Before being an economic project, Fiare is a political one. One that hopes to articulate and mobilise citizens and industry towards social transformation. One that champions sound investments that will further the economic, social and environmental interests of the people, as opposed to an idea of infinite growth at all costs. Traditional banking has many faults, becoming ever more visible, and the public interest and demand for alternatives is definitely increasing. Hopefully the global network of ethical and cooperative banks will continue to expand with it.
Your choices have impact
In a time where more and more people are realising the current system is sorely lacking and there is a growing desire to revolutionise the way we do things, it’s worth doing a little bit of digging to find out what alternatives are out there. This is especially true when we are talking about a field that has been dominated by behemoth players that have been taking advantage of their power and our inaction to keep feeding their own interests. The stakes between David and Goliath only increase in favour of David when we join him.
Image credits, left to right: baubauhaus.com, csadesign.com, @ih.kamu via Instagram, Huffington Post