BANKS BID FOR GREEN CREDENTIALS

Political parties, big oil companies and retailers are all trying to associate themselves with saving rather than exploiting the environment.

Now UK banks - a little late in the day - are trying to get in on the act.

From credit cards to current accounts, new financial products are being launched - all hawking their environmental credentials.

But critics suggest banks are simply dusting off run-of-the-mill financial products and giving them a "greenwash".

They say it is all about shifting product rather than saving the planet.

Breathe easier?

By far the biggest green product to be launched of late has been Barclaycard's Breathe credit card.

The UK's biggest card provider pledges to plough 50% of the profits it makes from Breathe into carbon reduction initiatives.

Logically, though, the only way to boost those profits is for customers to build up credit card debt at an interest rate of 14.9%.

The rate, although competitive, is a long way from being a best buy.

"It is quite a strange way to contribute to the environment, building up expensive debt," says Lisa Taylor, spokeswoman for financial information firm Moneyfacts.

"Surely if people want to help with carbon reduction they should go for a marketplace best buy and give a little to charities in the sector."

Paperless

In line with a trend now beginning to emerge within the banking industry, Breathe customers also will not receive paper statements.

Barclaycard argues this makes their offering more "credible".

It also saves the firm money.

"The truth is Breathe has to work from a commercial point of view. If there was anything that did not add up, then our customers would see right through it," says Barclaycard spokesman Andrew Bond.

"Our research shows that customers want products that work for them but allow them to do their bit for the environment."

The card provider admits, though, that to promote the card it will be using paper inserts in national newspapers.

"We will do what is required to make the card a success," Mr Bond insists.

"If we are jumping on a bandwagon, at least it is a bandwagon going in the right direction."

Smaller scale

Breathe's profits pledge makes it very ambitious by the standards of mainstream UK banking.

Other banks and building societies are trying to plug into the green living zeitgeist - but on a smaller scale.

HSBC, for instance, has pledged to pay £5 to environmental causes for each current account customer who moves to a paperless account.

Paperless not only means joining the "no statement" trend - but also dispensing with a chequebook.

Meanwhile, Britannia building society has launched a children's investment product, rather grandly called the Planet Saver.
For every new account opened between July and September, Britannia says, a tree will be planted by the Woodland Trust.

The child gets a paper certificate telling him or her that they have adopted a new tree.

As a result, several thousand trees are likely to be planted.

Against the backdrop of growing carbon emissions and climate change, HSBC's and Britannia's initiatives could be seen as little more than a figleaf.

However, bank industry insiders tell the BBC that several other High Street banks are poised to peg new current accounts, savings accounts and credit cards to the green issue.

In other words, green will soon be the banking industry's new black.

Banks have been slow to pick up on the green agenda compared to petrochemical firms," says Ned Colville, a brand consultant at The Value Engineers.

But the banks' efforts to date do not impress Mr Colville.

"You can't just nod towards green living and tick that box," he says.

"You have to follow through on your promises at all levels of the business.

"Some people will buy into what the banks are now saying but others will look more deeply and not be fooled."

HSBC is trying to do something along these lines, offering $100m earlier this year to four green groups - in part to help it "green" the way it does business.

Still, some critics point out that its loan policies will not change, while its carbon emissions have been increasing.

Greenish tinge

Ethics and banking are not as strange bedfellows as they may seem.

"Ethical banking and investment are well established in the UK. We have names such as the Co-op, Triodos bank and the Jupiter Ecology fund," says Ms Taylor.

"Many of these savings accounts and funds have produced good returns over the years as well as taking an ethical approach.

"But we are seeing the big banks move into this area, with greenish tinged products.

"The rule of thumb is make sure you are investing in a product that is really doing some good rather than boosting the bank's profits or providing it with good publicity."