There has never before been more choice in where you can put your money, thanks to the proliferation of online banking services. You may be overwhelmed with the number of banking choices available to you. Consider how your money can help shape social change. Consider becoming a client of a bank that is socially conscious.
What is a bank that has a strong social responsibility?
The self-regulation of businesses to promote positive impacts on social or environmental issues such as race equity
Social responsibility in the banking sector refers to ways that banks can create good or reduce harm. Eco-friendly banks and credit unions might not invest in fossil fuels or oil pipelines. Instead, they might plant trees, buy carbon offsets or invest in renewable energy. Some banks and credit unions may be dedicated to equity by offering financial literacy to the community or giving loans to small minority businesses.
Does it really matter what I do with my money?
You might think that your money in a savings, a checking or cd deposit account is waiting to be used. Your bank or credit union uses your money to invest or lend to businesses and other customers. Even if your money isn’t going to an oil refinery, or a company clearing Amazonian rainforests, it could be used in support of those initiatives.
You can support marginalized communities by putting your money in a credit union or bank that is working towards their cause. Elizabeth Vivirito is a consultant in financial services who has specialized in research on diversity, equity, and inclusion (DEI). She says that she’s seen more changes made in the banking sector in regards to racial equality since May 2020, when a Minneapolis officer killed a Black man named George Floyd.
Vivirito: “We’re seeing more and more people concerned about their money, where it goes, and the funding.”
What investments does my bank make?
While it can be difficult to determine what your bank does with your money there are a few ways you can tell.
Look at the website of the bank. What statements does it make about DEI? Do they state whether or not it is investing in specific industries? The bank has undergone any certifications from third parties, like becoming a B Corp certified or joining the Global Alliance for Banking on Values or 1% for Planet. Each of these certifications or memberships has specific goals, and members are required to meet certain requirements.
After you have visited the website of your bank, you can do a search for the keywords you are interested in, like “community” or “social impact”. This will help you to find any specific reports or statements from the institution, as well as news and accountability reports that come from sources who keep tabs on their efforts.
Some banks may be changing their business model. They might divest from specific industries, or add programs that help those who were previously excluded from banking.
Where can I locate a bank that is socially-responsible?
Decide what you consider social responsibility to be. Are you looking for a bank that is committed to combating climate change? You may then want to select a credit union or bank that has been Fossil Free Certified by Bank Green. Want to fight financial racism by investing in businesses that support equity? Vivirito suggests that you look into your bank’s or credit union’s history to find out who it was founded to serve, and its mission.
Vivirito: “The language, leadership and strategy of an institution must reflect the community they serve.”
You can easily move money from your national bank into a credit union in your area. The credit union will then use the money you transfer to help local businesses, people and programs.
Perez notes that “thinking about money from a broader perspective can help make you better decision with it.” Every dollar can shape the world .”
The original publication of this article by The Associated Press was by NerdWallet.