As tax season approaches, it could be time to take a step back and ask a slightly broader money question: is my bank truly green?
Paperless statements are only the beginning. Green banks, a growing segment of the financial industry, aim to improve the environment through operations and services – everything from recycled paper checks and LEED-certified buildings to better loan rates for buying an energy-efficient house or hybrid car.
It’s also a chance to put your money where your mouth is as an environmentalist, advocates say, because green banks – which tend to be community institutions – take customer personal deposits and in turn reinvest them in local sustainable businesses.
Green America, which publishes a Community Investing Guide, encourages consumers to move away from mega banks for both environmental and social goals.
“A lot of big banks continue to invest in coal, for example,” says Todd Larsen, Green America’s corporate responsibility director. “Is that what you really want your money funding? Or do you want it to build housing and businesses in the community for the people that need it most?”
In this sense, Larsen explains, retail banking with a green bank is a logical extension of “socially responsible investing,” a $3.07 trillion investment segment that takes into account corporations’ social and environmental practices.
Chicago’s GreenChoice Bank, which launched Feb. 1, is following a holistic strategy that looks at every aspect of traditional banking and reimagines it with an eye to sustainability, says Steve Sherman, chief operating officer and co-founder.
So far that includes eco-conscious perks like recycled plastic debit cards and a free EV charging station in the parking lot, as well as bank branches retrofitted with reclaimed and recycled materials. Already the account-opening process is relatively paperless and GreenBank hopes to develop a paperless loan.
But the key differentiator, Sherman stresses, is the bank’s community role.
“With green banking, what sets leaders apart from the rest is…how you invest back in the community, so we’re trying to develop loan products and deposit products that reward good environmental choices,” he says.
Also, “With a small bank you get a much higher level of service,” Sherman continues. “You’re interacting with the people who make decisions; when you have a credit need, our job is to say yes.”
Still, while drawbacks appear to be few, consumers tend to have one burning worry: ATM fees. Green banks purposely minimize their use of resources, which transates into fewer bank branches and ATM machines.
That can be handled in a few ways, green bank advocates say. Some banks will reimburse part or all of ATM fees. GreenBank, for example, participates in a non-fee network. Green America suggests consumers use their debit cards for point of purchase sales, i.e. get cash back.
“People keep their money in a bank out of inertia, but it isn’t hard to change over,” says Green America’s Larsen. “And once people do it, they’re excited by the fact that their money is really having the kind of impact they want it to have in the world.”