Sustainable banks in the U.S: what they are and a list of eco-friendly options

Mighty Deposits Guide, 2023 Edition

 

For environmentally-conscious consumers, being intentional about where you keep your savings can be a great way to take further control over your environmental impact. If you’re committed to reducing your carbon footprint — perhaps spending time recycling, protesting, and purchasing eco-friendly products — then it’s essential to ensure your own money in the bank isn’t undermining your other efforts.

 

What is an eco-friendly bank

When you deposit money in a bank, it doesn’t just sit there. Banks use your deposits to make loans and investments for all kinds of projects, and depending on the bank, your money could be funding anything from solar farms to small business loans to coal mining. Broadly speaking, eco-friendly banks are those that acknowledge that their lending and investment choices have an impact on the health of the planet, and take action to decrease funding projects that harm the environment. Some environmentally friendly banks not only refuse to finance projects that contribute to environmental degradation, but also proactively finance renewable energy or climate positive projects. There’s no single gold standard or metric when it comes to eco-friendly banking. Banks aren’t required to publicly report the environmental impacts of all their loans, nor are they required to uniformly disclose fossil fuel financing. However, there are many initiatives and organizations working to highlight sustainable banking options. Below are a few things to watch out for, along with several approaches you can take to go green with your banking. 

What to watch out for: greenwashing in banking

Before looking at specific recommendations for green banks, it’s worth a reminder that anyone interested in sustainability and banking must be particularly wary of greenwashing. If you search on bank websites for sustainability commitments, there’s often a list of eco-friendly efforts that are not directly tied to the bank’s financing decisions. If a bank’s commitment to going green stops with their LEED-certified office buildings or paperless statements, proceed with caution. These efforts on their own can be climate-friendly but are ultimately harmful if used as a strategy to detract attention from larger issues, like the bank’s role in financing deforestation or Arctic drilling, for example. A bank’s biggest impact on the environment doesn’t come from how they run their branches. The number one way a bank impacts the environment is through how it invests its money. 

Which banks invest in fossil fuels

If you’re like most people in the US with a bank account, your money is likely in a bank that is one of the top funders of fossil fuels. Until recently, many banks have managed to hide from the mainstream the magnitude of their role in the expansion of the fossil fuel industry. Fossil fuel companies need financing in order to start and sustain projects. The U.S. banks that finance the most fossil fuels are JP Morgan Chase, Wells Fargo, Citi, Bank of America, TD, Morgan Stanley, and Goldman Sachs, according to analysis from the Rainforest Action Network. These seven banks are also some of the most popular banks in the country, holding on to nearly half of American bank accounts. Banks play a role in giving the fossil fuel industry the cash they need to extract fossil fuels and commit acts of environmental destruction. And while it’s a great start for eco-conscious individuals to resolve to divest their money from the worst offenders (there are many banks and credit unions that don’t invest in fossil fuels), it’s equally important to think about what you want your money to fund instead. See the list below for alternatives. 

Environmentally friendly banking options

There are several certifications or characteristics to look for when evaluating whether a bank aligns with your environmental values.

B-Corp Banks: Certified B-Corporations are businesses “that meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.” B-Corp banks are one option for people interested in a bank that aims to use its money and power as a force for good.

Global Alliance for Banking on Values (GABV) Members: The GABV is a network of financial institutions that use “finance to deliver sustainable economic, social, and environmental development.” Banks and credit unions in the GABV take a triple-bottom-line approach and serve as values-based banking options. Browse all B-Corp or GABV banks. Browse all GABV credit unions.

Environmentally focused neobanks, like Aspiration, ATMOS, and Ando: There are several new digital-only banking providers that partner with community banks to offer services. See our guide to evaluating cause-driven neobanks to learn more about the impact of money held with these banking providers.

Fossil fuel-free banks and credit unions: Though banks are not legally required to disclose all fossil fuel financing, several banks have made public commitments that they do not finance fossil fuels. At Mighty, we’ve invited banks to share this commitment with us, and state that they do not finance fossil fuel extraction or infrastructure. This means no lending or underwriting for projects like tar sands oil, Arctic oil, ultra-deepwater oil & gas, fracked oil & gas, liquefied natural gas, and coal.

Below are banks and credit unions that are either a certified B-Corp, a member of the GABV, and/or don’t finance fossil fuels. The list of banks not financing fossil fuels continues to grow, so check back. (Are you a bank that doesn’t finance fossil fuels and would like to be listed?)

2023 list of sustainable banks and credit unions

Listed alphabetically by HQ state


Interested in these options, but need to confirm they offer everything you need? Check out the searchable database of sustainable banking options, where you can look for bank locations, filter for products and conveniences, and more: browse all B-Corp or GABV banks, or all banks that don’t finance fossil fuels, or both; you can also browse all GABV credit unions, all credit unions that don’t finance fossil fuels, or both.

 

Sustainable banks you can get started with right now via Mighty

Other community banks and credit unions

There are many community banks and credit unions that don’t finance fossil fuels but haven’t yet commented on this publicly. You can use this guide to find a community bank or credit union near you, and then ask them about the environmental impact of their lending.

Socially responsible banking options

if you don’t find a bank that’s eco-focused that meets your needs, you may be interested in exploring other socially responsible bank options, like banks that invest in low-income communities and communities of color, banks owned or led by people of color, and credit unions investing in low-income communities or communities of color. These banks — by the nature of their business on serving communities in more of a grassroots fashion than large chains — are by default greener options than the largest chains, which are the driving financing force behind the expansion of the fossil fuel industry. The complete guide to socially responsible banking lists additional options.

Impact Banking Tips

Adding impact to your banking portfolio is about reaching out to impactful banks and credit unions when your household or org needs anything from a bank (cash management, loan & other financing, wealth management).

It's not just a one-time "donation" deposit. Impactful banks are full-service banks. There’s more they can do for you than you may have considered.

 

In summary, here’s how to be eco-friendly with your bank account

1. Check up on your current bank. If you bank with one of the biggest funders of fossil fuels according to the Rainforest Action Network, any move into a community bank or a credit union is an improvement. Even if your money is not currently banked with one of the biggest funders of fossil fuels, you can still be more intentional with your money by placing it in a bank that is vocal about its sustainability efforts.

2. Move your money into a sustainable bank or credit union. If you can’t move all your money today, start with some of it. Use the list above to look for a new banking option or search the complete bank database or credit union database to find options near you and filter for the conveniences you need, like high-yield accounts, mobile deposits, business loans, and more.

3. Monitor what your deposits are up to. Check up on your bank or credit union every once in a while. Are you content with how they invest your money? If you want more detailed information, here’s a guide to see what your bank invests in. If you’d like to be notified when new quarterly data is published on Mighty, you can subscribe here.

 
 
 
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