SCOTLAND could become the home of a pioneering faith-consistent financial alliance that would see ethical investing being harnessed and promoted by places of worship across the country, it was revealed this week.

The United Nations is setting up a new department focused on faith-consistent investing that could be based in Edinburgh and funded by the Ethical Finance Hub and Norwegian Government, according to a major inter-faith organisation co-founded by Prince Philip.

The Alliance of Religion and Conservation (ARC) told a roundtable in Edinburgh on Monday that the programme has the support of eight major world religions, which have collectively committed £3.5 trillion for ethical investing, following a meeting in Switzerland last year.

Martin Palmer, co-founder of ARC, told delegates: “This partnership will be a whole new approach to faith-consistent investing worldwide, and we’re hoping that it will be based here in Edinburgh.

“We need help on three issues: funding from a combination of grants and a viable business model; criteria which will establish what an ethical and sustainable development programme would look like; and education.”

ARC is working with one of the most senior figures in the Catholic Church, Cardinal Peter Turkson, who wants to see educational material on faith-consistent investing distributed to all parishes.

This model is already being used by the Church of Sweden, which has invested $9 billion in educating every parish on how to invest ethically.

Mr Palmer said: “The Vatican wants to go to every single diocese and not just say what they should do but actually recommend products. It’s already being done by the Church of Sweden.

“It produced three packages that were given to every single parish, telling them ‘if you want to invest ethically, according to Church of Sweden rules, this is how you should do it’. Our aim is to make that universal.”

Mr Palmer was speaking at a roundtable hosted by the Islamic Finance Council, which has for some time been collaborating with the Church of Scotland to develop ethical finance products in the world’s first financial services partnership between Muslims and Christians.

It also follows the first Al Rayan Bank opening in Scotland last year. The bank is one of around 20 in the UK to offer Sharia-compliant products, which are currently among most competitive ion the savings market.

Sharia savings do not offer an interest rate under Islamic principles, which forbid Muslims from earning interest. Instead, they invest in sharia-compliant businesses and share some of the profits with their savers.

Sharia-compliant banks are open to non-Muslims, who make up 86 per cent of Al Rayan’s customers. The bank also offers home purchase plans as an alternative to mortgages, where purchasers in Scotland pay an occupancy payment under a co-beneficiaries agreement

This week, another Sharia-compliant bank announced it had raised rates on its savings account, pushing its 31- and 60-day notice products to the top of the best-buy tables.

Gatehouse Bank said it would use money ploughed into its Milestone Savings to invest in construction projects, property and sukuk.

Chief executive officer Charles Haresnape said: “Our goal is to offer an alternative to all UK savers for whom returns are not just market-leading but ethical to boot.”

The bank’s 31-day notice account pays an expected 1.05 per cent, while the 60-day notice account aims for 1.15 per cent. Other products include one, two, three and five-year fixed term accounts, with expected rates of between 1.82 and 2.45 per term. Accounts can be opened with a minimum of £1,000.

Another bank with a religious background is Reliance Bank, originally founded as the Salvation Army Bank.

The organisation channels a proportion of its profits into funding the Salvation Army’s work and annual bonuses for senior managers are limited to £500 per person. Interest rates on savings, however, are very low to minimise the risk of losses that could jeopardise the Salvation Army’s work.

If you are concerned about whether your finances are faith-consistent, check out the website