How You Can Bank for the Planet: A Review of Socially Responsible Banking Options

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Did you know that many traditional banks use your deposits to fund companies that may not align with your values? If you didn’t, you’re not alone. Fortunately, there’s a simple solution: switching to a socially responsible bank that puts money in causes you believe in. 

How do you know if a bank is socially responsible?

Socially responsible banks seek to promote a better future by lending to small businesses or individuals in the local community or financing renewable energy. As a customer, you might be able to save money and the environment at the same time.

We’ll break down the three basic types of socially responsible banks below.

B Corporations

B Corporations are certified by the B Lab, a nonprofit that verifies institutions on five categories:

• Corporate governance
• Community impact
• Environmental impact
• Worker treatment
• Customer treatment

Certified B Corps are legally required to balance profit and purpose.

GABV Institutions

The Global Alliance for Banking on Values (GABV) members are banks and credit unions that promise to support economic, social and environmental causes. GABV currently includes 67 members globally.

CDFIs

CDFIs, or Community Development Financial Institutions, are designated by the CDFI Fund and run by the U.S. Treasury Department. CDFIs emerged in the 1970s because traditional banks were reluctant to lend to people and small businesses in low-income areas. CDFIs promote community development by providing money and training to underserved populations. Today, there are over 1,100 CDFIs in the U.S. However, as CDFIs target social problems, they may still use deposits to fund fossil fuels.

Factors Used to Choose a Socially Responsible Bank

Before deciding on a socially responsible bank, it’s important to know its features and evaluate whether its values align with yours. 

The Mission

To start, consider each bank’s mission and socially responsible accreditations, such as B Corp, GABV, or the CDFI designation. Additionally, you might want to ask if the bank:

• Finances coal, oil, natural gas, or other environmentally harmful activities
• Lends to companies or supports causes you object to
• Maintains a diverse workforce and lends to diverse or underserved communities

The Experience

Once you understand a bank’s mission, it’s time to consider how it can serve you. 

For example, many socially responsible banks are online-only, with no branches. At the same time, some smaller banks have limited technological abilities, which can dampen your customer experience. Others have a strong regional presence with plenty of branch locations and fee-free ATMs. 

The Products

Before you get charged fees you’ve never heard of, it’s best to understand the bank’s account structure. For instance:

• Do they require account minimums or charge monthly fees?
• What kind of interest rates do they pay?
• Do they offer a variety of checking, savings, and retirement accounts? A credit card?

A Few Options

Once you know what you’re looking for in a bank, it’s time to buckle down and find an institution that works for your needs and short-term financial goals. Here are a few options:

Ando Money

Launched in early 2021, San Diego-based Ando Money is an online bank that doesn’t fund fossil fuels. It will invest your deposits exclusively in eco-friendly projects like renewable energy. Environmentally friendly lending is combined with the advantages of modern bank accounts, such as a mobile app, competitive rates, and transaction notifications. And Ando Money is a B Corp.

Atmos

Atmos Financial is a pending B Corp and a member of 1% for the Planet. This bank focuses on financing clean energy with its no-fee, FDIC-insured, high-yield savings and checking accounts. It has also pledged to lend to its own clean energy and sustainable projects in the future. That said, ATMOS currently has no branch locations. 

Amalgamated Bank

Founded by a labor organizer in 1923, Amalgamated Bank is one of the best-known socially responsible banks with over $4 billion in assets. The bank is a B Corp and a GABV member. It is primarily known for its focus on climate change and social justice causes, including immigrant rights, LGBTQ rights, criminal justice, workers’ rights, gun safety, and reproductive rights. But, while the bank has several branches, its mobile app has a low rating.

Beneficial State Bank

Founded in 2007 in California, Beneficial State Bank (BSB) offers savings and checking accounts online and via an app. The bank has just launched a credit card, too. With over $1 billion in assets, BSB is a B Corp, a member of the GABV, and a certified CDFI. 

Climate First Bank

Launched in early 2021 and based in St Petersburg, Florida, Climate First Bank is a member of the GABV and is waiting to be certified as a B Corp.

Climate First has committed to being carbon neutral and never funding oil and gas extraction. Instead, it funds auto loans for electric and hybrid vehicles as well as solar loans. Climate First offers checking and savings accounts, money markets accounts, certificates of deposits, and IRAs. However, the bank’s free ATM network is entirely Florida-based. 

Ready to Bank for the Planet?

If you’re thinking of closing your current bank account and switching providers, there’s no time like the present to affect change. With the climate crisis on the horizon and billions of dollars going to disaster relief annually, switching to a socially responsible bank is just one more way you can help the Planet and your community thrive. 

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