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Trust in the banking sector is incredibly low and it’s easy to see why. Banks were at the center of the 2008 global recession and have continued to make money hand over fist in the years that followed. The business model that most banks use is simply not sustainable. They’re focused only on their own financial interests when they have the power and resources to fundamentally improve the world.
As the planet grapples with climate change and inequality continues to spike, banks are rightfully looked at as the key agents making gains toward the clean energy future and inclusive economies.
A New Model
The erosion of trust in the banking sector needs to be addressed and there are now signs of banks willing to put people and the planet first.
“We saw UN principles for responsible banking as an opportunity to shift the focus on not how the world impacts the financial sector or the banking community, but really how we impact the world around us on issues like climate change, poverty, and number of things. ”
Ivan Frishberg, the CSO, Amalgamated Bank
Amalgamated Bank is one example of a bank that’s trying to change the status quo. It’s dedicated to the mission of using banking to help sustainable organizations fight for world-changing causes. It’s the first U.S. bank to have its Net Zero Climate Targets validated by Science Based Target initiative (SBTi) and 62% of its lending portfolio is dedicated to high-impact areas.
These policies are no coincidence but rather a result of the clear efforts to be America’s socially responsible bank.
Putting Your Money Where Your Mouth Is
Amalgamated Bank’s explosion in popularity is hardly a surprise. Many people have become accustomed to banks that do not make effort to connect with their clients and communities beyond profits. They’ve learned to accept that their deposits will be fed back into the machine, making inequality worse and contributing to the pollution of the planet… all in the name of profits.
But with Amalgamated Bank, people can finally feel a sense of agency, knowing that their money is going to make society a better place by supporting Unions, philanthropies, mission-driven businesses, and organizations that are striving to create a more just and sustainable future.
Working Class Roots
“Racial, social, economic, and sustainable justice are the things that are present in all of the products in our approach, to the work that we do as an institution and the communities that we serve.”
Ivan Frishberg, the CSO, Amalgamated Bank
Amalgamated Bank isn’t like their peers. It wasn’t founded in boardrooms or gentleman’s clubs, but rather in the textile factory. Amalgamated Bank was started by members of the Amalgamated Clothing Workers of America, many of whom were women and immigrants. Their vision was simple in its goals but revolutionary in its potential: create a bank that was accessible for all.
This meant providing working families in America with the same opportunities and access to capital as major corporations. They carried out this vision by providing a range of products and providing funds to people of all backgrounds. This manifested in products like unsecured personal loans and free checking accounts.
These policies may be relatively commonplace now, but in the early half of the 20th century they were unheard of. But it is exactly these novel ideas that enabled the American dream to become a reality for so many.
Looking to the Future
Amalgamated Bank has a long and storied history, but it’s clear that they are still committed to their founding values. In a time where banks have lost the public’s trust, Amalgamated Bank is a refreshing change. With an emphasis on social responsibility and sustainability, they are leading the charge in changing how we view banks and what they can do for society.
These articles are produced by TBD Media group