How to Find the Most Socially Responsible Banks

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Finding socially responsible banks can seem like a nearly impossible challenge. However, it is definitely possible. 

The key to finding a socially responsible bank that works for you is to try and look for banks that are both:

  • Engaged in the kinds of socially responsible activities that are important to you
  • Not engaged in the kinds of activities that a socially responsible bank would likely want to avoid

What are socially responsible banks?

A socially responsible bank is basically a fancy way of describing a bank that is values-based. 

The concept of a socially responsible bank has been steadily gaining traction as more consumers are becoming concerned about the impact that large institutions have on the world.

The preference for social responsibility is not unique to the financial services industry, and we’re seeing a rise in socially responsible corporations across many industries.

While some businesses initially thought that they could ignore these cries from the public and charge ahead using the same socially irresponsible practices, the pressure for reform has been mounting.

So what does it mean to be socially responsible as a financial institution?

Social responsibility means committing to the environment, to customers, and to the general well-being of the citizens of the world. 

Socially responsible banks believe that financial institutions should be a force of good rather than working purely for profit. 

How to define socially responsible banks

Being a socially responsible bank takes effort. 

It takes a lot of commitment to address issues like environmentalism and to promote humanitarian values. Since it may be relatively easy for any bank’s website to publish content painting their brand as a virtuous beacon of social responsibility, how can you – as a responsible consumer – tell when a bank is the real deal?

Determining whether a bank is socially responsible or not can require a bit of research, but the payout is greater confidence that your financial institution has your – and the planet’s – back.

Fortunately, there are certifications and affiliations that banks can have that can make this research considerably easier.  

Two key stamps of approval, so to speak, when evaluating a bank’s commitment to social responsibility are a B-Corporate Certification and affiliation with the Global Alliance for Banking on Values (GVAC)

B Corporate certification

B-Corporate (B-Corp) Certifications are awarded to businesses that meet exceptionally high social responsibility standards. The more socially responsible a bank is, the higher its chances of qualifying for a B-Corp Certification are. 

The social responsibility standards that B Corporate Certifications require for qualification are extensive and range from legal accountability to inclusiveness and dedication to environmentalism. 

Banks that can demonstrate their commitment to transparency, legal accountability, inclusiveness, and environmental responsibility can receive a B Corporate Certification – but it’s no easy process. 

What makes the B-Corp Certification so special is that it’s currently the only certification in place that measures and evaluates a company’s social and environmental performance as a whole.  

Global Alliance for Banking on Values

Another thing to watch for when looking for a socially responsible bank is an affiliation with Global Alliance for Banking Values. 

The Global Alliance for Banking on Values is a team of leaders in the banking industry working together to create a more sustainable world. 

They are committed to building better banks by making them more socially responsible. This commitment includes a dedication to transparency, environmentalism, as well as social and economic sustainability. 

The Global Alliance for Banking Values commands a vast network of banking professionals interested in putting the people that live on this planet first. It’s worth noting that GABV was founded in 2009, just a year after unscrupulous banking practices shook the world. 

After 2008, many members of the public lost a great deal of trust in financial institutions. The members of GABV are aiming to change that perception and restore the people’s faith in banks.    

What big banks are doing that socially responsible banks avoid

Big banks that are socially irresponsible often engage in certain activities that socially responsible banks do not. 

Fund oil and coal industries

Banks that provide funding to businesses in the oil and coal industries are now being viewed as socially irresponsible. This is because fossil fuels are not only a non-renewable energy source, but they can also damage the environment through carbon emissions that ultimately contribute to global warming, in addition to contributing to water and air pollution. 

Investing in private prisons

Investing in private prisons is considered by many to have become a socially irresponsible thing for banks to do. This is because private prisons are usually not only profit-driven but associated with greater percentages of abuse and dehumanization than their state counterparts. As such, many socially responsible banks have chosen to either cut ties or intend to cut ties with organizations in this industry. 

Charging excessively high fees

Charging high fees might seem an intuitive approach for a bank looking to make a profit. However, in terms of social responsibility, charging appropriate, low, nominal fees may be a more considerate and responsible approach than trying to squeeze an unfair amount of money out of potentially already financially disadvantaged customers.  

Rejecting transparency

Banks that reject transparency simultaneously reject social responsibility. It’s pretty difficult to have social responsibility without transparency, and a socially responsible bank will likely make an effort to be as transparent as possible irrespective of their size and market share. 

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How to find a socially responsible bank

The trick to finding a socially responsible bank is to know what to look for. 

Socially responsible designations

As we’ve already mentioned, B-Corp banks and banks that are affiliated with GABV tend to be much more socially responsible than other banks. However, there are several other signs you can watch out for that a bank is socially responsible: 

Low fees

A socially responsible bank is often a bank with relatively low fees. By contrast, banks that bleed customers dry with excessive fees are largely thought to be socially irresponsible. So aim to keep your eyes peeled for a bank with fees that work for you. 

Clear values and mission

Another thing to look for when trying to find a socially responsible bank is a clear mission statement and strong values. The mission statement in particular is a great place to start when aiming to establish what matters most to your financial institution. 

FDIC insurance

Customers should always aim to seek out a bank with FDIC insurance. Having FDIC insurance is a sign that a bank is socially responsible, since it means that your money can be recovered in the event that the bank fails. 

Without FDIC insurance, your chances of getting your money back if the bank fails are comparatively slim. 

Customer support

Socially responsible banks are known for offering extensive, effective, and compassionate customer support services. The best kind of bank may well turn out to be a bank that puts its customers first. As such, exceptional customer support is an important quality to look for when seeking a socially responsible bank.  

Online support

While customer support is an important hallmark of socially responsible banks, they also tend to allocate a lot of resources for providing satisfactory online support. With more customers switching over to online banking, online support is becoming increasingly important to customers, which a socially responsible bank is likely to be attuned to.  

5 of the Most Socially Responsible Banking Solutions

We know that finding a socially responsible bank can be difficult, which is why we’ve assembled a list of the 5 most socially responsible banking solutions currently available.  

Aspiration

Aspiration is number one on our top 5 list of the most socially responsible banks. This neobank believes in the concept of paying it forward, and allows its customers to make money and a difference at the same time. For one great example of the work Aspiration is doing to transform the financial industry, check out their innovative Aspiration Zero credit card – the card that can make carbon-zero a reality

Amalgamated

Amalgamated Bank has demonstrated a steadfast commitment to social responsibility that has made them an industry leader to look up to. The team at Amalgamated Bank aims to work towards a world that is more compassionate and sustainable. 

Spring Bank

Spring Bank is another top bank in terms of social responsibility. With their green checking account, direct access to managers and partners, and easy-to-use banking app, Spring Bank is a great example of a socially responsible bank that is operating transparently and with the customer and planet at the forefront.

Mascoma

Mascoma is a B-Corporation bank that has shown a strong dedication to corporate, environmental, and social responsibility. Starting with a strong customer focus, Mascoma is committed to continuing to grow the community that they started way back in 1899. 

Beneficial state bank

Benefit State Bank features one of the most environmentally-friendly commercial buildings in the world and has remained a strong supporter of social justice and responsibility. This bank has declined to invest in morally questionable investments like private prisons.

Benefit State Bank has also invested a considerable sum into affordable housing while denying funding to predatory payday lenders. The Beneficial State Bank supports a rich variety of do-no-harm businesses that aim to make the world a better place. 

Discover more about green banking 

If you are interested in social responsibility and want to focus your money in a way that benefits the environment, check out how Aspiration is transforming financial empowerment today. 

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