It's time we got our money out of the fossil fuel industry. Ignorance is not bliss if it involves the destruction of the planet and the eventual suffering of millions of people around the globe (cue the climate crisis!).
The worst bank in the entire world is JP Morgan Chase, ranking higher in fossil fuel funding by 29% compared to the second worst bank, Wells Fargo. Since the Paris Climate Accord, the quantity of money used to fund fossil fuel projects has only increased with very few banks imposing restrictions on fossil fuel financing.
"...fossil fuel financing is dominated by the big U.S. banks, with JPMorgan Chase the world’s top funder of fossil fuels by a wide margin." - Fossil Fuel Finance Report Card 2019
You can read more about why we need to move our money in another post detailing the truly bad things big banks do.
Assuming you're already onboard to ditch your unethical bank, where do you even look? How do you know if a bank is funding fossil fuel projects or giving loans to solar companies?
Green banks are out there!
Start with understanding the certifications and affiliations banks can have related to their ethics and loaning practices. These certifications are key to identifying a bank (or credit union) that is truly invested in climate action.
Banks are not legally required to disclose fossil fuel investments in the U.S. You can read about what my old bank told me when I tried to ask them if they loaned money to oil companies! Having outside certifications provides a level of proof to what a bank is claiming - they really do care about the planet.
There are a few key certifications, associations, and memberships you should know about when figuring out which green bank is the right one for you.
Green Bank Certifications to Look For
Certified B-Corporations
Being a B-Corp means a company is legally required to balance profits with purpose and maintain the highest standards of social and environmental performance. B-Corps adhere to third party validation and transparency with annual reports on their performance in areas such as workers, customers, diversity, and environment.
B-Corp certification isn't just for banks! Actually, there are only a handful of banks in the U.S. that have this certification and the majority of businesses certified are in other sectors. Companies like Patagonia, Allbirds, and Pelacase are all examples of B-Corps!
Global Alliance for Banking on Values (GABV)
There are only 66 financial institutions across the world (as of January 2021) that are members of the Global Alliance for Banking on Values, so this really stands out! Members are committed to advocating on the global scale for sustainable, ethical banking systems and adhere to the GABV's five principles.
Community Development Financial Institutions (CDFI)
This certification is administered by the U.S. Department of Treasury and indicates that a bank is dedicated to serving the community and is a Community Development Bank. A bank must designate at least 60% of their total lending and services to low income communities in order to become a CDFI.
Community Development Bankers Association
Community Development Banks (CDFIs as explained above) can join the Community Development Bankers Association (CDBA). The CDBA advocated for policies and regulations that support community banks and educates the general public on the importance of financial institutions that are run for- and run by- the community.
Ethical Green Alternatives to JP Morgan in the U.S.
Take a look at the following banks and credit unions that offer environmentally-friendly financial support. Not all of the banks on here have directly committed to being 100% fossil-fuel free. However, all of them go above and beyond the toxic big banks most of us are using by being a part of organizations that promote ethical practices and environmental stewardship.
I've listed out the location for each financial institution here so you can (hopefully!) find one local to you. Aspiration and Clean Energy Credit Union are online-only banks which make great options for anywhere in the U.S. I currently bank with Aspiration and my fiancé banks with a local credit union here in Seattle.
Location: Online Only
Highlights:
1% for the Planet
Committed to fossil fuel-free lending and 100% Clean Lending
Plus accounts automatically offset gasoline with carbon offsets every time you fill up
Conscious Coalition provides rankings of big businesses that then give account holders ratings based on their purchases
Location: California, Seattle (Washington)
Highlights:
Global Alliance for Banking on Values
Community Development Financial Institutions Fund (CDFI Fund)
JUST Transparency Label
Principles for Responsible Banking
Community Development Bankers Association
100% Carbon Neutral organization
Partnership for Carbon Accounting Financials
$0 to Oil Companies
$0 to Private Prisons
Location: Arkansas, Mississippi
Highlights:
Global Alliance for Banking on Values
Community Development Financial Institutions Fund (CDFI Fund)
Community Development Bankers Association
Location: Online Only
Highlights:
Green America Certified Business
Solely focused on providing loans to individuals to access clean, renewable energy
No loans go to fossil-fuels!
Location: Minnesota
Highlights:
Global Alliance for Banking on Values
Certified Community Development Financial Institution (CDFI)
Accessible360 Website
2% or more of net income goes towards philanthropy
Climate Change Commitment 3C Initiative
Have committed to tracking the carbon impact of all of their loans by 2022
Location: New Hampshire, Vermont, Maine
Highlights:
10% of pre-tax income goes to philanthropy
50% of Board Members are Women
Location: New York State
Highlights:
Committed to fossil fuel-free lending
Community Development Financial Institutions Fund (CDFI Fund)
Community Development Bankers Association
Location: New York, Washington D.C., San Francisco
Highlights:
Global Alliance for Banking on Values
$20 Minimum Wage (highest for a bank in the country!)
Committed to not lending money to fossil fuel companies nor climate change deniers
100% renewable energy powered facilities
Community Development Bankers Association
Location: Washington D.C.
Highlights:
Global Alliance for Banking on Values
Community Development Financial Institutions Fund (CDFI Fund)
Community Development Bankers Association
Location: New Hampshire
Highlights:
Purchase renewable energy credits for 100% of yearly electricity
Location: Vermont
Higlights:
Banks run off of their own solar field!
Location: Virginia
Highlights:
Certified B-Corporation
Community Development Financial Institutions Fund (CDFI Fund)
Community Development Bankers Association
Location: Nation Wide
Highlights:
Climate Action Checking Account - 1% for the Planet
*Bank of the West definitely needs an astrict with it! Bank of the West is considered a BIG bank here in the U.S. As far as big banks go though, it does offer a specific account designated to support climate action. They do not, however, publicly commit to not loaning to fossil fuel companies and have not implemented these "climate action" policies across all their accounts.
So if you currently bank with JP Morgan, Bank of the West is a better choice. But make sure to check out all the options above as well as your local credit unions before choosing Bank of the West!