Today, it’s possible to invest in particular strategies and companies based on the aspects you are most passionate about, whether in a specific area or a type of company. More so, investing in sustainability has gained significant attention in recent years as more people put value on supporting eco-friendly companies and practices.
An investment in sustainability can happen in multiple ways, including by developing an investment strategy surrounding a specific type of eco-friendly product or service or by choosing financial institutions that offer investment products based on the sustainability practices of the companies they support.
Regarding sustainable investing, important decisions must be made based on your specific goals and needs, such as which strategies, companies, and efforts you believe are most impactful. As with any investment process, investors must consider their specific goals, objectives, and risk tolerance to know which strategies to put money into and how much to invest.
What Is an Eco-Friendly Bank?
Many consumers and investors are looking for ways to invest in sustainability, and the bank you choose could play a role in that. Eco-friendly banks have corporate governance that allows them to make decisions for loans and other investment strategies based on environmental and socially focused efforts. These organizations often focus on supporting projects that support the environment and people.
Eco-friendly banks focus on providing investors with a way to invest in their values rather than just in profit goals. The key here is that the financial trade-off is often positive – not only are you investing in projects that support the community, climate, or world as a whole, but there are often financial rewards to doing so.
What Do These Banks Do to Help Make Sustainable Investing Possible?
There are several ways that these banks work to be eco-friendly. Each is a bit different, but some of the ways you’ll see they work to be more sustainable include the following:
- ESG integration: Many banks have created environmental, social, and governance (ESG) policies that impact how they make decisions throughout the organization. These policies are a way to set the foundation for being sustainable.
- Reduction of Fossil Fuels: Many of the best banks for investing in suitability have moved to be 100% fossil fuel-free. They use renewable energy instead to help reduce their carbon footprint.
- Investment in consumers who need help: Another way these organizations are working for change is by providing access to financial tools for traditionally underbanked or underserved consumers. This often includes providing more personalized advice and guidance to those who may not have had access to low-cost loans before.
- They invest in climate-positive organizations: Some eco-friendly banks put a lot of effort into choosing who they will invest in based on that organization’s efforts to reduce their carbon footprint.
- Investment portfolios focused on green development: Many eco-friendly banks have developed mutual funds and investment strategies that allow consumers to invest in organizations focused on sustainability practices, such as organizations committed to green building or limiting deforestation.
Eco-friendly companies are vastly different from each other. It’s always wise to do your due diligence to ensure you know who you are investing in and what they stand for before putting money into any organization.
Why Sustainable Investing Matters
Many people are looking for ways to give back and make their mark. Investing in environmental sustainability or companies that care about the environment as much as you do makes sense. You can use your money to help support organizations that want to improve access to financial services for those in economically disadvantaged situations or in organizations that are working to stop climate change.
The key here is that putting your money into a sustainability investment fund does not have to come with significant risk. When you invest in a bank that has developed sustainable investment funds and strategies, you can trust that bank to do the due diligence in ensuring the company’s ESG policies align with your goals.
Investing in sustainability is a wise decision for many reasons, and often because it aligns with your values. Yet, for many people, it’s also a wise financial decision since these are some of today’s most important and fastest-growing industries, allowing you to potentially tap into a long-term financial growth strategy that can help you build wealth as well.
The Best Banks for Sustainable Investing Strategies in the U.S.
The following are some of the most sustainably focused banks and financial institutions in the U.S. Take a look at what their investment objectives are and what differences you could make if you enter into any of these impacts investing portfolios, mutual funds, real estate investment trusts, or other types of sustainable investments these financial organizations offer.
1. Aspiration
AspirationAspiration Review: Is It Sustainable & Legit? is a certified B Corp bank that donates 10% of its profits to nonprofit organizations. The organization bank is an online-only bank available throughout the U.S. that offers some existing investment opportunities, including 100% fossil fuel-free investment and retirement funds.
2. M1 Finance
M1 Financial allows for investing in eco-friendly and sustainable funds through its Sustainability Community Pie. This specific fund allows for environmental sustainability efforts. They also offer a range of minority-based Pies, which allows investors to put money into publicly traded companies led by diverse groups of people.
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3. Robinhood
Robinhood is another online-based financial tool available to people from all walks of life. The company is committed to responsible investing, including taking steps to reduce its own environmental impact through emissions control.
They also make investment decisions on companies based on their ESG policies and procedures. Robinhood values ethical investing by providing access to investment management tools to people who otherwise may not have access to such services as underserved community members.
4. Betterment
For those who wish to invest in sustainable companies, Betterment is a tool that enables that. The organization offers the Climate Impact portfolio, which is geared towards supporting the efforts of companies pursuing green projects that help lower carbon emissions.
The financial institution also provides other Socially Responsible Investing Portfolios that allow investors to support companies with strong ESG criteria. Individual investors can also learn more about the social and corporate governance methods many of these organizations have so they can make better decisions.
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5. Ando Money
Ando Money is a lesser-known financial institution that offers nationwide mobile banking. It provides spending and savings accounts to consumers.
Their socially responsible and green investment strategies include creating debit cards made with 90% less plastic. They also offer investing options in clean energy, sustainable transportation, green project development, and climate change initiatives.
6. Spring Bank
Another Certified B Corp, this financial institution aims to be carbon neutral in everything it does. It is also a Community Development Financial Institution working to empower and support communities that are otherwise economically disadvantaged or stressed.
The company’s goals include creating equal access to capital. Based in New York City, their sustainable investing opportunities are geared towards helping companies through investment advice and support as they work to fund local and nationwide growth of economically challenged communities.
7. Unity Trust Bank
Unity Trust Bank provides business banking and commercial loans to companies that make wise, eco-friendly decisions. The company aims to be socially and financially responsible in its work, and they are a Carbon Literate Bank that has won awards for reducing its carbon footprint through internal measures and ESG strategies.
8. Sunrise Bank
Sunrise Bank is a Certified B Corp and Community Development Financial Institution. The organization puts 2% of its net income into sponsorships and programs aimed at social responsibility. The organization specifically aims to provide new capital into areas where capital is typically limited, helping through personal banking but also with fintech partnerships, commercial lending, and New Markets Tax Credits.
9. Amalgamated Bank
Amalgamated Bank is nearly 100 years old, and throughout its history, it has aimed to make banking accessible and affordable. Today, they have highly regarded programs as they invest socially responsibly, including supporting LBGTQI rights, reproductive rights, and criminal justice efforts. They are also 100% powered by renewable energy and have maintained 60% of their workforce as either people of color or women.
10. Mascoma
A Certified B Corp, Mascoma has been built to support communities and their customers rather than just investors. The organization supports local economies by making funding decisions based on how projects can support local economies and job creation.
The company has a women-led structure, with 53% of its management team women. They also donate 10% of their pre-tax income to various organizations. Sustainable investing, along with socially responsible investing, are their objectives.
Global Banks for Eco-Friendly Investment Opportunities
On a global scale, numerous organizations offer opportunities to tackle some of the world’s biggest challenges in sustainability. The following banks are some of the most noted in the world for their focus on sustainable investing strategies as well as the sustainable investments they are making in their own operations.
1. KfW
Located in Germany, KfW is noted for its sustainable finance efforts, which include supporting development in Germany. Many of their products focus on environmental and social sustainability efforts. They help support sustainable urban development funds through real estate investment trusts as well as biodiversity conservation, urban development, and climate-focused efforts.
2. Standard Chartered
Standard Chartered in the U.K. is a sustainable banking institution noted for its ability to support environmental efforts in areas of carbon emissions, diversity, and inclusion for impact investing, as well as a focus on financial renewable energy products. Their sustainable investing efforts also focus on ethical investing, including supporting organizations that pursue support for those in third-world countries. They offer a range of alternative investments to meet the needs of today’s top asset owners in this classification.
3. ING Bank
ING Bank is a large financial institution offering a range of wealth management methods, many of which carry sustainability-focused investment objectives. The bank has a three-prong focus in its sustainability focus, and that is to focus on reducing its own environmental footprint by putting in place ESG criteria that are increasing in stringent guidelines, focusing on financial sustainable economic activities in the Netherlands, where they are located and beyond, and in fostering a culture of sustainability.
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4. Swedbank
Swedbank, a Nordic-Baltic banking institution with a long history that dates back to the 1800s, is another sustainable opportunity since it has a strong community investing mindset for the region. The organization offers various financial services to help sustainability investors reach their goals, including options for corporate banking, wealth management, and retail banking.
However, with 7 million customers in Sweden, Lithuania, Latvia, and Estonia, it has a global reach. It aims to create a positive societal impact through its thematic investment strategies and provide superior digital-first financial performance stocks, bonds, and other strategies.
5. DBS Bank
DBS Bank in Singapore is another leader in sustainability investing. It offers numerous sustainable funds and green investing strategies to its customers, which include people in much of Asia, including Hong Kong, China, Taiwan, and India.
The organization offers its customers a range of investment options, including bond funds, mutual funds, fixed-income securities, and wealth-building tools. DBS Bank is helping to support the communities and the world on a grand scale through these types of sustainable funds compared to non-green-focused investments.
6. BNP Paribas
In France, the best sustainable financial institution for investing is BNP Paribas. This organization isn’t that old, having been founded in 2000. Still, it is a multi-national bank that has developed financial products and investment strategies to support the environment and people from all walks of life. It operates in 70 countries, offering investment options for sustainable investors in environmental protection and social responsibility areas.
7. Credit Agricole
Another France-based financial institution is Credit Agricole, a bank founded in the late 1800s and one of the largest banking groups in France. It offers some excellent tools for investors looking to invest in various asset classes in sustainability-focused methods, including investment research, asset management, insurance products, and socially responsible investments within any country it operates in.
8. Triodos Bank
Triodos Bank was founded in 1980, and from the start, it aimed to offer financial tools and support for people from all walks of life, with a very positive focus on social, environmental, and cultural impact. To do this, it makes investment decisions based on how those decisions would impact the world around them.
Specifically, the organization offers investment dollars for organizations focused on fair trade initiatives, organic food production, and renewable energy alongside traditional funds. Investment teams study an organization’s ESG factors to ensure they are making the best decisions. Triodos Bank is a Netherlands-based bank offering a range of services on a global scale.
9. Nordea
The third Swedish-based bank on the list is Nordea, a notable financial leader in the industry. It offers investment services to people throughout the region, including underserved populations. Its services include green investing in environmentally focused organizations. Still, it also offers a range of tools to help support individuals with lower-cost banking services in many of the local and foreign markets it serves.
10. Rabobank
The final top 10 bank for investing sustainably is a Netherlands-based bank called Rabobank. Founded in 1898, it has long provided financial tools to people in rural and agricultural communities, small businesses, and individuals from all walks of life.
The bank, which offers full brokerage services, provides various resources to support companies that positively impact the world around them. They are also noted for their high-quality customer service, competitive interest rates, and other investments geared towards those typically underserved in the financial world.
FAQs
What are the most ethical banks in the US?
The most ethical banks in the US include Aspiration, Beneficial State Bank, Mascoma, OneUnited Bvank, and Sunrise Banks.
What are B-Corp Banks?
Certified B-Corporation, or B-Corp banks, are those that have the highest standards of certified social and environmental performance, as well as public transparency in the investment decisions they make. They also have reached the highest standards in legal accountability so that they have more of a balance between purpose and profit.
What is an eco-friendly bank?
An eco-friendly bank allows consumers who use them to tap into all their tools and resources affordably. They make investment decisions for loans and personal banking based on how well those investments will benefit the community and the people they serve rather than just being focused on profits. They also offer investment strategies and tools, like mutual funds or other investment funds focused on renewable energy, climate change, and other sustainability-focused initiatives.
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