If you are a socially conscious person, you may prefer transacting with socially responsible banks and sustainable financial institutions that advocate for helping the lesser community, the environment, or other sustainable related cause.
What Are Socially Responsible Banks?
Socially responsible financial institutions’ primary aim is enhancing the positive growth of the economy. The banks ethically invest their money in community projects. Most of these institutions have a policy that aims at community and positive societal growth.
The money you deposit in such banks is invested in viable projects. Charity donation to the disadvantaged is also a primary goal of these banks.
Sustainable Mission-Driven Banks
Just like any other bank, socially responsible banks are stakeholders in banking, lending, and offering financial advice. What makes them outstanding is their drive towards a self-sustainable community. The banks are future-oriented, and their adoption of 100% biodegradable products is proof. Other significant sustainable mission-driven options include:
Support of the Minority Groups
Socially responsible banks are at the forefront of defending minority groups in society. The banks are especially conscious of disadvantaged people. They aim at supporting such communities by contributing a certain percentage of their profits.
Safe Lending Services
Socially responsible banks are cautious when extending credit facilities to businesses. When approached by companies dealing with fossil fuels, the banks decline to offer any credit. Renewable energy is paramount to the banks and often objects to non-renewable energy sources that might deteriorate the climate.
Fight for Workers Right
The banks are workers’ rights activists in the U.S. Since the banks are B certified, considering employees’ affairs is of significant importance. The banks advocate for transparency and fairness in the working environment.
Are Big Banks Funding Good Causes?
The Paris Agreement, which was adopted in 2016-2019, found that big banks were the most significant investors of fossil fuels companies. Despite the dangers fossil fuels pose to the environment, the big banks continued to finance it. In a report published in 2019, the percentage of big banks funding rose exponentially by 40% from 2018 to 2019.
Despite the big banks contributing millions to charity organizations, they are heavily funding hazardous projects. The same banks set up policies warning the public about climate change while hypocritically investing in non-renewable energy.
How to Choose A Socially Responsible Bank
Identifying a socially conscious financial institution is essential for a sustainable future. The first step in identifying an ethical bank is investigating their investment strategies. Consequently, a bank that is compliant with the state laws by paying taxes is also responsible. Other critical factors to pay attention to include:
B Corp Certified
B Lab is a reputable non-profit organization that certifies financial institutions. In the certification process, B Lab seeks to identify the gap a bank fills in the community or society in general. A bank must be conscious of the environment by adopting biodegradable products. Additionally, social responsibility to employees and other stakeholders is essential.
The Global Alliance for Banking on Values (GABV) Membership
GABV is a coalition of financial institutions. The independent network’s main aim is the achievement of a sustainable economic and social environment. GABV members engage in projects that have a positive impact on society.
Community Development Financial Institutions (CDFI)
CDFI is a federally funded program that allows underserved communities to access credit services easily. The program encourages economic investment in the less advantaged society.
Socially Responsible Banks
Aspiration offers ethical and sustainable cash management services in the U.S. with a transparency policy that seeks the creation of integrity banking. This B-Corp certified institution is among the best socially responsible banks globally; it has a sustainable investment solution that gives back 10% of every dollar to various charity organizations.
As one example of sustainability efforts, Aspiration gives you a debit card made of recycled ocean plastic when you sign up for Aspiration Plus, a subscription service available to customers with an Aspiration Spend & Save Account. It also enables green banking by adopting a tree planting culture; you have the option of planting a tree after making a purchase.
As the customer, you have the freedom to select a reasonable fee and saving plan. The investments you make to the bank are safe, and deposits are insured by the Federal Deposit Insurance Corporation (FDIC). Other advantages of transacting with Aspiration include:
- Competitive rates
- Free ATM withdrawal
- Ecologically safe debit and credit cards
- Reimburses extra cash
- Sustainability goals
The bank operates within New York and serves other local areas in the U.S. The B-Corp certified bank is also a member of GABV. The institution adopts 100% renewable energy, thus minimizes climate deterioration by a significant percentage.
The bank extends solar panels and community house development credits to the residents. They avoid investing in harmful products like fossil fuels and tobacco. Women constitute 60% of the workforce of the bank.
City First Bank
The bank is based in Washington, DC, and is the only bank in the capital to be community conscious. It is B Corp certified and a member of CDFI. Community development is the primary goal of this institution, and it extends credit facilities to underserved community members. The electronic bank offers robust security and world-class banking services.
Beneficial State Bank
Beneficial State Bank is CDFI and B-Corp certified. Consequently, it is a member of GABV, making it the best socially responsible banks. The bank mainly extends credit services to businesses or institutions owned by the minority. The adoption of sustainable practices in its operations is remarkable. The online-based institution ensures the community is advantaged and able to achieve full economic development.
Sunrise Bank is located in Minnesota. It is B Corp and CDFI certified and has a legal GABV membership. The bank is a part of Public Benefit Corporation, ensures exemplary levels of accountability and purpose.
The bank supports volunteer groups such as North 4 Good. For Sunrise Bank employees who wish to participate in volunteer groups, the bank gives them a paid leave of 40 hours. The bank advocates for community support by mainly assisting the underfunded communities in reaching their full economic potential.
Spring Bank is a B Corp and CDFI certified based in New York. It was the first bank in the city to receive a B Corp certification for promoting a sustainable community. Its support to the low-income residents and start-up businesses is quite remarkable.
Additionally, the bank offers competitive and friendly rates for the community. It has passed a no-fee ATM policy making it quite efficient for the communities’ low earning members.
The B Corp certified bank located in the Northeast U.S., mainly deals in banking, lending, and offering financial advice. It has incorporated a renewable energy program. Through the program, the bank issues solar loans to the community.
Why Choose an Ethical Bank?
The ethical banks’ operations mainly align with the social values of the community. Their reinvestment projects primarily target the harnessing of renewable energy and other viable economic projects. Distancing themselves from investment in harmful products and fossil fuels fosters the building of a sustainable future.
Banks such as Aspiration support community development projects by investing responsibly. Adoption of green banking safeguards the environment and guarantees a safe and clean society. Investing with the banks helps in the repurposing of your finances mindfully.