Ethical Banking and Ethical Funds

As more Ethical Banking and Ethical Funds become concerned with the cost to society and the environment of corporate practices, ethical banking and funds are becoming more popular. This is driven by demographic shifts as younger generations gain wealth and investment power.

Many ethical banks prioritize their lending and investing strategies to ensure that they are living up to their claims of promoting social good. It is important to understand how a bank operates and what their priorities are before you decide to invest with them. For example, if a bank claims to be helping low income communities that have few options for banking, it is essential to know what percentage of their loans are going into these communities and what other business lines they derive the majority of their profits from.

Moreover, ethical banks may also prioritize environmental sustainability. They may refuse to work with companies that contribute to climate change and other ecological destruction. They might also promote greener workplace initiatives like reducing energy usage, recycling, and paperless banking. For instance, Spring Bank in New York was the first bank to become B Corp certified and a member of the Bank for Good Movement while also pledging to stray away from fossil fuels and being carbon neutral since 2019.

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Technological advances and easier access to information have helped to increase transparency and encourage responsible corporate practices. In addition, there is a growing movement towards mandatory ESG (environmental, social, and governance) reporting by companies. This has made it more possible for ethical funds to identify and select companies that align with their values.