Certified B Corp Banks: An easy way to support clean energy
Big banks have been slow to respond to consumer pressure to green their investments. What can you do right now to fully align your wallet with your environmental and social values?
By Sabrina Tenteromano
February 9, 2021
Throughout 2020, the United States’ six major banks—Bank of America, Goldman Sachs, JPMorgan Chase, Wells Fargo, Citi, and Morgan Stanley—all codified support of green banking by updating their financing policies to exclude funding for oil and gas exploration in the Arctic. Unfortunately, it’s difficult to see this gesture as more than lip service when these banks are still heavily invested in fossil fuel projects. Although facing consumer pressure and adjusting, the absence of government restrictions – and most recently quite the opposite as the Trump administration, on its way out, passed a new rule requiring the most influential banks to consider funding fossil fuel projects – means big banks are not in a rush. There is much more banks can do – or shouldn’t do – to advance sustainability goals and become environmental, social, and governance (ESG) financial leaders.
Consumers have a powerful decision in choosing which bank they open checking or savings accounts with. Transitioning to zero carbon-emitting energy sources and reversing climate change, or conversely, activities that exacerbate climate change – like oil exploration and drilling, pipelines, and coal mines – depend on banks and the deposits they get from these basic accounts. So if you care about your bank sharing your values, it’s time for you to consider banks that are Certified B Corporations.
What does it mean for a bank to be a Certified B Corporation?
Consumers can look to Certified B Corp banks as the gold standard for socially responsible and green investments that support renewable energy development. B Corps, short for B Corporations, stand apart from other banks because of their transparency to consumers and equal consideration across all the elements of the triple bottom line –people, planet, and profit. Unlike traditional corporations, they are legally required to take into account the impacts their decisions have or will have on their employees, supply chain, consumers, and the environment and local communities.
How do banks or companies become Certified B Corporations?
To become a B Corp, companies must score at least 80 out of about 200 points on the B Impact Assessment (BIA) across impact categories and exemplify the B Corp mission within their organization and in their organization’s outcomes. Companies are asked questions about how the day-to-day operations of their company create a positive impact for their workers, their community, and the environment, earning specific additional Impact Business Model points if their overall business model can be shown to create positive social and environmental impact. The BIA is overseen by B Lab, the global B Corp Movement’s independent Standards Advisory Council, which is a governing board that utilizes a dynamic process of broad, transparent, multi-stakeholder engagement to inform the B Corp mission. B Corp banks are often also CDFI’s, or a Community Development Financial Institution, which means they invest in a broader definition of environment, like the community and its people through local development projects.
Start helping the environment today with these B Corp banks
America’s largest B Corp bank, Amalgamated Bank (115.1 Overall B Impact Score), the first union-owned bank to become publicly traded, not only offers clean energy portfolios but is powered by 100 percent renewable energy. In 2019, it was also the first bank in the United States to endorse the United Nation’s Principles for Responsible Banking, of which the first principle requires alignment with the UN’s Sustainable Development Goals and the Paris Climate Agreement. It is also is a member of the Global Alliance for Banking on Values (GABV), which prioritizes climate action.
As a CDFI, Beneficial State Bank (176 Overall B Impact Score), managing nearly a billion dollars in assets, makes it a part of their mission to support minority-owned businesses and renewable energy. Their PositiveChange Checking Account has no monthly service charges and is committed to funding renewable energy and environmentally sustainable projects.
Available to residents of New Hampshire, Vermont, and Maine, Mascoma Bank (114.9 Overall B Impact Score) boasts a solar loan program as well as mortgages, business loans, and private banking.
Aspiration (128 Overall B Impact Score) offers cash management and fossil fuel free investment products that support socially conscious and sustainable initiatives. With their free Aspiration Spend & Save account, cardholders have the opportunity to plant a tree with every roundup on a purchase, called Plant Your Change, and receive cash rewards for reaching tree-planting milestones. The Spend & Save Plus debit card’s ($15 monthly) Planet Protection feature tallies up the carbon output of all of your gas purchases, then automatically buys offsets to help neutralize your driving impact on the climate. Through Planet Protection, Aspiration is also funding Cool Effect and 3Degrees, organizations dedicated to fighting climate change through carbon reduction and offset projects, like Amazon rainforest conservation. A Plus savings accounts can also earn up to 1% annual percentage yield (APY) in interest. Fossil fuel free IRA and managed investment funds are also available. It makes sense then that Aspiration Bank is a member of 1% for the Planet, meaning they commit 1% of gross sales each year to environmental nonprofit partners approved by the organization.
If you’re in the Twin Cities metro area, CDFI and B Corp Sunrise Banks (144.2 Overall B Impact Score) is a member of the GABV and its CEO, a board director, leads the North American Chapter. Sunrise Banks offers all kinds of personal accounts, including youth savings for children, thrift savings for the budget-conscious, and lines of credit, as well as options for businesses.
Next steps toward greening your finances
There’s no need to shame yourself into switching to sustainable banking all at once. If you’re more comfortable sticking with a major bank and moving only some of your liquidity to a smaller bank, that is always an option. Consider linking your current credit or debit card with Aspiration’s Plant Your Change feature. If your current bank is not B Corp certified, you can determine how ethical your current bank is by reviewing its publicly available Community Reinvestment Act (CRA) rating. This score describes the bank’s ability and track record in meeting the needs of the community in which it is located.
You have a choice in where you bank. Opening a sustainable checking or savings account with a Certified B Corp bank makes it easy to align your social values with your finances. If the idea of investing in the market scares you or you’re not in the financial position yet to begin investing this is a great first step.
Disclaimer: GreenPortfolio aims to keep all information on the site current and accurate. However, when you may find differences between information listed here and information listed on a financial product provider’s website. Opinions expressed here are not those of any bank, credit card issuer or financial institution, and have not been reviewed, approved, or otherwise endorsed by any of these entities. Please complete your own due diligence before making any financial decisions.