Banking Ethics are Going Green

Amid the discussion on the prominence of global climate change, banks are taking a stand against companies that are damaging the environment.  Recently, Wells Fargo made an announcement explaining that it will severely limit the accessibility of funds for companies that are involved in harmful environmental practices.  Groups such as the National Mining Association, Massey Energy, and others have been involved with the destruction of mountaintops and beaches in the Appalachians and Canada in order to secure coal and oil reserves.  In order to continue these practices, energy companies seek banks that will agree to loan and finance their work.  Wells Fargo is one of many banks that have begun to limit the availability of funds to companies that damage the environment.

This is a prime example of business ethics.  While Wells Fargo could continue to lend to the destructive companies and make money, they are choosing to lose this source of revenue because it is ethically wrong.  By lending to these energy associations, banks would be promoting their business.  This has major consequences for the world because of the issue of global climate change.  This action also speaks very highly of Wells Fargo's character.  The issue gives Wells Fargo a good name with consumers that are seeking consumer banking services.  Consumers will note that Wells Fargo is taking a stance on an important issue that affects them.  This may lead to an increase in business for Wells Fargo and other banks that are showing their care for the environment.  This is case of business ethics could be a win-win situation for Wells Fargo.  Not only does the bank restrict the capabilities of damaging environmental companies, but they could gain consumer respect and business because of their actions.

Source: http://www.nytimes.com/2010/08/31/business/energy-environment/31coal.html?_r=2&emc=eta1

-Justin Schaffer