Did you know that your business banking choices could be funding fossil fuel extraction?
Last year alone, banks provided $673 billion to finance the fossil fuel industry, even as oil and gas companies continue to accrue profits in the trillions. Their investments build new pipelines and fund fracking, oil exploration, and coal mining.
Despite the adoption of the Paris Agreement six years ago, finance institutions have invested over $4.6 trillion in the fossil fuel industry. Big banks like JPMorgan Chase, Wells Fargo, Citi, and Bank of America are amongst the top fossil fuel funders.
Banks are consistently putting profits over the planet, even in the midst of the ongoing climate crisis that they are the very center of.
While CO2 emissions are decreasing slowly, the continued use of fossil fuels will result in severe climate change impacts in the near future. Change is needed, and it’s needed fast.
As the biggest financial stakeholders, banks play an enormous role in the future of fossil fuels.
By prioritizing sustainable banks (or credit unions) that fund renewable energy initiatives rather than fossil fuel extraction, you can ensure your money isn’t being used for any dirty business.
Here are the best ethical banks that are saying no to fossil fuel backing once and for all.
Exploring The Top Sustainable Banks In the World
Sustainable Banks USA
Sustainable Banks UK
Sustainable Banks Australia
Sustainable Banks In The USA
1. Beneficial State Bank
What is the most sustainable bank in the US?
With seven local branches throughout California, Oregon, and Washington, many would argue that Beneficial State Bank tops the list. This green bank is not only certified Fossil Free, but also one of the highest-ranked Certified B Corp banks in the world.
As members of the UN Environment Program Finance Initiative, they align their core strategy, decision-making, lending, and investment with UN Sustainable Development Goals, with current emphasis on housing, social, and environmental justice as well as health and wellbeing.
At least 75% of their business loans go towards mission-aligned goals while the other 25% goes towards “neutral” loans for small businesses and accountant firms.
Beneficial State Bank is so invested in the sustainable banking industry that they have a dedicated Earth Services Team finding commercial solutions to mitigate the impact of climate change. One of their current priorities is improving residential solar power partnerships.
This carbon-neutral chain of green banks publishes their carbon emissions in their loan portfolio each year. They document everything—from direct emissions from energy usage to indirect emissions from employee commutes—and publish their findings and progress in an interactive impact report.
2. Aspiration
Aspiration believes the most valuable asset is Planet Earth—which is why they provide personal and business banking services that help businesses, individuals, and investors offset their carbon footprint and move towards net-zero emissions.
Every $1,000 moved into an ethical bank account with Aspiration from big banks saves the carbon equivalent of 6,000 miles worth of carbon emissions from the average car.
They use the deposits from personal banking accounts to empower change-makers working towards meaningful social outcomes and environmental sustainability.
Their cash management accounts allow sustainably-minded businesses to invest in carbon credits through rigorous carbon removal and avoidance projects like satellite monitoring projects, AI-enhanced vegetation data tracking, automated impact measurement programs, and other sustainable smart technology.
Spanning fivecontinents, each carbon and reforestation project is rigorously vetted to ensure quality and integrity in the carbon market. The tthe local community receives all information needed to give informed consent, after which they actively participate in the projects through leadership positions, active implementation, and feedback.
Over the past five years, the Certified B Corp has won eight Best for The World awards, with outstanding performance in the Community segment.
3. Climate First Bank
America’s first climate-focused eco bank, Climate First, is one of the most well-known financial institution in the green banking industry.
True to their name, this green bank truly puts climate first with their personal and commercial banking services. They offer sustainable savings and checking accounts and green loans for individuals and businesses alike.
Following the United Nations SDGs, this bank’s sustainable finance options and green loans currently focus on affordable clean energy, sustainable community development, and climate action.
This means they offer assistance with everything—from solar panel installation to EV charging to certified carbon offsets.
Among their business loans, you can find funding for Solar, Storage, and EV charging, energy improvement, sustainably certified commercial real estate, and sustainably certified construction. Businesses can receive up to 90% of project financing for each category.
As a member of 1% For The Planet, Climate First gives part of their gross sales profits to environmental non-profits.
The banking group itself is currently carbon-neutral, but part of the Race To Zero campaign, with progress published in annual impact reports.
4. Ando Money
Ando Money believes that eco-friendly banking can save the planet.
That’s why they are the only online and mobile banking service to invest 100% of customers’ deposits in companies combating climate change—all with checking and savings accounts that have no monthly maintenance fees, no minimum balance requirements, and a wide network of free ATM’s
Rather than using customer deposits to invest in fossil fuels, the Fossil Free certified Fintech funds green initiatives such as clean-energy projects, regenerative farming, and sustainable transportation. Reading through their success stories, you’ll see just how impactful their investments are.
Their commitment to delivering sustainable economic services has branched so far that they’ve even created the world’s first sustainable insurance. With each insurance policy purchased, 100 trees are planted at no cost to the policyholder.
5. National Cooperative Bank
As the only sustainable bank in the US that offers nationwide sustainable banking products to cooperatives and member-owned organizations, National Cooperative Bank puts community first.
Among their ethical banking solutions you’ll find credit unions, housing co-ops, grocery co-ops, community healthcare centers, and Native American enterprises.
Their lending focuses on affordable community housing, healthy food, renewable energy, small business growth, and community-driven healthcare.
This past year, the eco-friendly bank invested $475 million into serving low and moderate income communities, financed 132 megawatts of solar power, and supplied $2.9 million in non-profit grants.
Their solar loan program is run by a team with significant experience in tax credit financing, renewable energy, and project financing. They provide business loans for customers installing solar energy systems, with success stories including solar developers and public schools.
6. Capital One
Capital One is committed to creating a world where everyone has equal opportunity to prosper. This green bank’s three guiding principles are environmental impact, community engagement, and diversity and inclusion.
Through strategy and risk management, the ethical bank supplies sustainable banking solutions for both their customers and their very own financial institutions.
The ecological bank is targeting LEED certification for all of their offices and reducing landfill use at their campuses. Their personal sustainable goals include reducing water usage, purchasing only renewable energy, reducing greenhouse gas emissions, and ensuring 95% of paper operations are from FSC certified or PCR recycled materials.
Meanwhile, they invest in causes that build a more inclusive, sustainable economy.
Among their personal and business banking services, Capital One shows support for renewable energy, green auto vehicles, and circular fashion.
With a strong record of public sustainability reports, this banking powerhouse is transparent about publishing their CSR goals and progress.
7. Amalgamated Bank
For the past 100 years, Amalgamated Bank has supported social causes surrounding workers’ rights, affordable access to banking, LGBTQ+ rights, gun safety, criminal justice, and reproductive rights.
32% of their loan portfolio goes to climate solutions, and absolutely 0% backs fossil fuel companies. Their most recent data shows a combined $839 million in climate protection loans and investments.
Focused on both social welfare and environmental causes, the Certified B Corp has established their very own donation sector called The Amalgamated Foundation. Each year, the foundation donates over 9 million dollars to climate justice.
Amalgamated Bank has achieved four years of net carbon functioning and counting with 100% clean energy used in all of their offices.
They support carbon offsets via Garcia National Forest, a sustainable working forest that saves wildlife habitats, improves water quality, and preserves the economic base of local communities.
Anyone has access to their CSR reports from the past five years.
8. Sunrise Banks
Sunrise Banks deems themselves the title of the world’s most socially responsible bank. When we take a look at their online banking services, it’s hard to disagree.
As one of the top green banks in the world, it’s no surprise that they are a Certified B Corp, Certified Community Development Financial Institution, and a member of the Global Alliance for Banking on Values.
They donate a minimum of 2% of net profit income a year to nonprofits through sponsorships and corporate donations. Initiatives they focus on include increasing access to affordable housing, narrowing the achievement gap, and increasing diversity.
Not only does Sunrise Banks support the community through finances, they also donate their time. All employees receive 40 hours of paid time off each year, designated towards volunteering on various projects.
They have recently started measuring carbon via Partnerships for Carbon Accounting Financials on its loan portfolio as a step towards reducing greenhouse gas emissions and developing plans for a sustainable future.
9. Clean Energy Credit Union
With Clean Energy Credit Union, you can invest in climate-friendly banking that supports a cleaner, greener future.
Every dollar deposited into their ethical bank accounts helps other members afford clean energy.
The credit union funds clean energy projects that work to mitigate climate change, reduce pollution, increase public health, build community wealth, promote democracy, and increase energy independence.
In total, the ecological bank provided over 10,000 affordable clean energy loans and helped offset 700,000 tons of carbon dioxide equivalent.
Some of the projects they support include solar PV systems, electric vehicles, insulation, waterproofing, electric bikes, and more.
Most Sustainable Banks UK
10. Barclays
As one of the best ethical banks, UK-based Barclays has a lot to offer. One of the founding signatories on the UN Principles for Responsible Banking, they were among the first financial institutions to commit green banking.
You can sign up for checking and savings accounts among their online banking platforms.
Focused on supporting the transition to a low-carbon economy, they use your deposits to invest in sustainable technology start-ups and facilitate sustainable finance.
This sustainable investment bank has announced their ambitions to become completely net-zero within the next 30 years via their new climate strategy plan.
The plan includes expanding green home mortgages (making them one of the more ethical mortgage lenders out there), lending to climate tech start-ups, and launching rewards from energy-efficient homes.
They offer incentives for homeowners working for energy-efficient improvements and customers switching to electric vehicles.
11. Triodos Bank
How can banks be more sustainable?
By taking a leaf out of Triodos Bank’s finance book.
They offer ways for customers to positively impact the environment via ethical business banking and financial services for individuals, businesses, charities, and investors who share their values.
With some of the most ethical banks UK investors have access to they’ve awarded €9.4 billion worth of loans to projects across Europe, benefitting both people and the planet.
Their main environmental focus is tackling the ongoing energy crises. This means reducing energy demand, using energy efficiently, and investing in renewable systems. Their combined efforts avoid over 1,000 kilotons of CO2 a year.
They do not support companies that involve the production and sale of weapons, tobacco, pornography, fur, or environmentally hazardous substances.
12. The Co-Operative Bank
When it comes to ethical banking, UK institution The Co-Operative Bank is known as the original ethical bank, and the first in the UK to introduce a customer-led Ethical Policy.
The Ethical Policy is constantly developing to tackle customers’ concerns, such as refusing the support of aggressive regimes around the world, saying no to animal testing for cosmetics, supporting Fairtrade, and not financing fossil fuels.
They use customers’ deposits to finance renewable energy projects and local charities, social enterprises, and nonprofits that provide socioeconomic advancement for vulnerable populations.
As part of Bank Fossil’s Green Fossil Free Banking Alliance, the eco-friendly bank works to combat climate change and biodiversity loss by campaigning for emissions reductions and preserving and restoring ecosystems.
They’ve previously participated in successful campaigns that oppose anti-gay hate speech and lobby to vote for adoption of a climate change bill. Their most recent campaign supports the Climate and Ecological Emergency Bill, calling on the government to take responsibility for the UK’s carbon and ecological footprints.
For over 15 years, the company’s operations have been carbon-neutral. Their residual carbon emissions are offset with an additional 10% to address the impact of business activities in the past.
Ethical Banks Australia
13. Bank Australia
As the first Australian member of the Global Alliance for Banking on Values and a Certified B Corp, Bank Australia is one of the best sustainable banks Australia has to offer.
Their clean money promise means they don’t invest in harmful operations like fossil fuel extraction, live animal export, arms industry, gambling, or tobacco. Rather, they invest in non-profits, sustainable initiatives, inclusive housing, and clean energy transition.
Last year, the customer-owned bank contributed $1.4 billion in impact finance assets, including loans to businesses that support affordable and community-focus housing and land developments and commercial properties installing renewable energy systems.
Bank Australia is currently certified carbon-neutral. By 2035, this sustainable bank has a goal to work with customers to reach net zero emissions.
What Is A Sustainable Bank?
With so many factors to consider in the sustainability sector, banking probably isn’t the first thing that comes to mind when setting sustainable business goals.
But it probably should be.
The role of banks in sustainable development is insurmountable.
As you might already know, only a small portion of your deposits at a bank are held as cash. The rest of your money gets invested into assets like loans, government lending, and credit cards. Banks lend money to others with interest rates, which is how the banks make a profit.
Unfortunately, traditional banking and ethical banking don’t usually go hand in hand. As they are for-profit institutions, most banks look for the highest profit possible. High profits lead to happy banks, and investments in high-demand resources leads to high profits. No business is booming more than the fossil fuel business.
This past year, the top 10 largest public fossil fuel companies declared over $280 billion in profits alone. Profits that partially went back to the initial investors; the banks. As long as investors keep making money, they will keep investing. With more money, companies can drill even more oil.
Thus, the vicious cycle continues.
So what is an example of sustainable banking?
A sustainable bank does its best to lower its environmental impact, usually by changing internal operations and incentivizing environmentally-friendly behaviors.
Rather than investing in the fossil fuel industry, green banks and credit unions use their money for climate financing. Climate finance is crucial for climate mitigation because large-scale investments allow companies to experiment with new sustainable technologies.
Green banks typically have Fossil Free and B Corp certifications and are active members of 1% For The Planet, Global Alliance on Banking Values, and Community Development Financial Institution (CDFI).
Closing Thoughts On The Best Ethical Banks
With big power comes big responsibility.
As big financial stakeholders, banks are responsible for making ethical and sustainable investment choices that ensure the longevity of our planet.
And, as a sustainable business, you have the responsibility to make sure your money is being used for good.
Unfortunately, as long as there is profit in the fossil fuel industry, financial institutions will refuse to drop out.
Big banks will only stop backing harmful causes if we give them less opportunity to do so.
The rise of green banks and the future of sustainable finance is promising but it is only possible with the commitment from customers, both individuals and sustainable businesses alike.
