Today, it’s possible to invest in particular strategies and companies based on the aspects you are most passionate about, whether it is a specific area of the world 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.
When it comes to 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.
Table of Contents
- What Is an Eco-Friendly Bank?
- What Do These Banks Do to Help Make Sustainable Investing Possible?
- Why Sustainable Investing Matters
- The Best Banks for Sustainable Investing Strategies in the U.S.
- 1. Aspiration
- 2. M1 Finance
- 3. Robinhood
- 4. Betterment
- 5. Ando Money
- 6. Spring Bank
- 7. Unity Trust Bank
- 8. Sunrise Bank
- 9. Amalgamated Bank
- 10. Mascoma
- Global Banks for Eco-Friendly Investment Opportunities
- 1. KfW
- 2. Standard Chartered
- 3. ING Bank
- 4. Swedbank
- 5. DBS Bank
- 6. BNP Paribas
- 7. Credit Agricole
- 8. Triodos Bank
- 9. Nordea
- 10. Rabobank
- What are the most ethical banks in the US?
- What are B-Corp Banks?
- What is an eco-friendly bank?
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 are those that have corporate governance in place 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 personal values rather than just in profit goals. The key here is 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 as well.
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 the way 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 consumers who are traditionally underbanked or underserved. 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 their 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 a group of 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 own 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 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 personal 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.
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, including 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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Another online-based financial tool available to people from all walks of life is Robinhood. The company is committed to responsible investing including in taking steps to reduce their 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.
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.
See Related: Best Betterment Alternatives for Investing
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 that are 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 that is 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 o.pportunities are geared towards helping companies through investment advice and support as they work to fund local and nationwide growth of economically challenged communities.
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 the work it does, 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 that is also a 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.
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 they have maintained 60% of their workforce as either people of color or women.
A Certified B Corp, Mascoma has been built to support communities and their customers rather than just investors. The organization works to support 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.
Located in Germany, KfW is noted for its sustainable finance efforts, including providing support for development in Germany. Many of their products are focused on both environmental sustainability efforts and social sustainability. They help support sustainable urban development funds through real estate investment trusts as well as biodiversity conservation, urban development, and climate focused efforts.
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, and 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.
Swedbank, a Nordic-Baltic banking institution with a long history that dates back to the 1800s, is another opportunity for investing sustainably since it has a strong community investing mindset for the region. The organization offers a range of financial services to help sustainability investors reach their goals, including options for corporate banking, wealth management, and retail banking.
However, with 7 million customers not only in Sweden but also in Lithuania, Latvia, and Estonia, it has a global reach. It aims to create a positive societal impact through its thematic investment strategies and by providing 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 a range of investment options for its customers, including bond funds, mutual funds, fixed-income securities, and wealth-building tools. Through these types of sustainable funds compared to non-green-focused investments, DBS Bank is helping to support the communities and the world on a grand scale.
6. BNP Paribas
In France, the best sustainable investing financial institution is BNP Paribas. This organization isn’t that old, having been founded in 2000, but it is a multi-national bank that has developed financial products and investment strategies aimed at supporting the environment and people from all walks of life. It operates in 70 countries, offering investment options for sustainable investors in areas of environmental protection and social responsibility.
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 of the countries 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, as well as renewable energy organizations alongside traditional funds. I nvestment teams study the ESG factors of any organization to ensure they are making the best decisions. Triodos Bank is a Netherlands-based bank offering a range of services on a global scale.
The third Swedish-based bank on the list is Nordea, a notable financial leader in the industry. It offers a range of investment services to people throughout the region, including underserved populations. Its services include green investing in environmentally focused organizations, but 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.
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 a range of 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 who are typically underserved in the financial world.
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 level of 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 of 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 investment tools, like mutual funds or other investment funds that are focused on renewable energy, climate change, and other sustainability-focused initiatives.
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Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.
Hailing from a lineage of industrious Midwestern entrepreneurs and creatives, his business instincts are deeply ingrained. This background fuels his entrepreneurial spirit and underpins his commitment to responsible investment. As the Founder and Owner of The Impact Investor, Kyle fervently advocates for increased awareness of ethically invested funds, empowering individuals to make judicious investment decisions.
Striving to marry financial prudence with positive societal impact, Kyle imparts practical strategies for saving and investing, underlined by a robust ethos of conscientious capitalism. His ambition transcends personal gain, aiming instead to spark transformative global change through the power of responsible investment.
When not immersed in the world of finance, he’s continually captivated by the cultural richness of new cities, relishing the opportunity to learn from diverse societies. This passion for travel is eloquently documented on his site, ViaTravelers.com, where you can delve into his unique experiences via his author profile.