Other areas of ethical consumerism, such as fair trade labelling, have comprehensive codes and regulations which must be adhered to in order to be certified.
While there are differences between ethical banks, they do share a desire to uphold principles in the projects they finance, the most frequent including: transparency and social and/or environmental values.
Ethical banks sometimes work with narrower profit margins than traditional ones, and therefore they may have few offices and operate mostly by phone, Internet, or mail.
Mainstream financial banks have had varying relationships with corporate social responsibility and ethical investment.
By investing selectively based on values, ethical banks can promote socially/environmentally responsible companies and penalize those who do not conform to these standards.
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 or lower interest rate loans for low emission cars.
[citation needed] Ethical banks excel in community involvement, as do other financial institutions such as credit unions.
In general, bankers "consider themselves to be in a relatively environmentally friendly industry (in terms of emissions and pollution).
Environmentally, the potential combined effect of banks switching to more environmentally friendly practices (i.e. less paper use, less electrical use, solar power, energy efficient light bulbs, more conscientious employee travel policies with concern to commuting and air travel) is huge.
External ethics looks at the impacts that their business practices, such as who they loan to or invest in, will have on society and the environment.
Banks are often reluctant to broaden the scope of their external ethical policies because of the significant nature of the changes.
However, by incorporating ethics that account for societal costs in their practices, banks may improve their reputation.
Depositors who use ethical banks do not have this assurance because there is no external regulatory body that sets minimum acceptable legal standards.
According to Cowton, C. J., and P. Thompson, "banks that had signed the United Nations Environment Programme (UNEP) Statement, a voluntary industry code that promulgated environmental stewardship, transparency, and sustainable development, did not act significantly different than the non-signatories.
There is a limit to how much more people will pay for that guarantee, after that point, further initiatives will undercut the banks income and therefore are likely to not be followed.
Without this rise, it is difficult to impede unethical businesses from finding a bank to finance their projects.
The current industry wide codes, for example, prohibit the financing of illegal drug production.
When a credit union has surplus, the profits made will either be invested into the community or will go back to the members in the form of "patronage rebates" (i.e. cheques).
However, credit unions do not necessarily have the same potential to cause widespread change in business practices as ethical banks do.