Searching for a Climate Friendly Bank
When my wife Willow and I moved to Truth or Consequences, New Mexico, we searched for a bank or credit union that met our ecological values. T or C is the 6000 person county seat of a 12,000 person county: rural America. Our choices for a suitable local institution were limited. Still, the journey to an eco-friendly bank offers all of us some items to consider.
An almost wonderful bank
PNC Bank was the early front-runner in our search. Headquartered in Pittsburgh, PNC had 2236 branches around the country, including one in T or C.
PNC has reduced the energy needs of their buildings by 66 percent since 2009. They give commercial customers special loans that reduce interest rates when the business meets its ESG (Environment, Social, and Governance) goals. They buy electricity from renewable sources. They have a $30 billion (cumulative) environmental finance pledge – think LEED buildings and renewable energy projects. Okay! We became customers.
Then a friend who is active in Third Act told me about PNC Bank’s investments in fossil fuel companies. Financing is where banks have their biggest impact on CO2 emissions.
A five year campaign by the Earth Quaker Action Team eventually convinced PNC Bank to stop financing companies engaged in mountaintop removal coal mining in West Virginia. Management and stockholders do care about reputation. This from an obscure PNC document:
“We [are] subject to conflicting pressure from individuals, groups and/or governmental entities to cease doing business, or to maintain business, with certain companies or sectors, in particular those involved with fossil fuels, because of concerns related to climate change… We are at risk for an adverse impact on our business due to damage to our reputation… including related activist pressure.” (My emphasis)
Moreover, I learned from the Banking Climate Crisis 2024 report that, between 2016 and 2024, PNC Financial Services invested $108 billion in about 200 fossil fuel companies. “PNC… with $557.3 billion in assets, ranks 26th for total financing to fossil fuels in 2023, with $12.15 billion. However, PNC ranks 4th when banks’ financing is divided by their 2023 assets.” PNC’s investments include $1.2 billion loaned to Energy Transfer LP which operates 130 thousand miles of petroleum pipelines. PNC’s 2023 Corporate Responsibility Report is not reassuring.
“With regard to the business loans in the power sector we plan to continue supporting our clients with their climate-related goals and objectives they have publicly set for themselves. A future step we plan to take is to define and disclose an intensity reduction target consistent with those goals and appropriate for the risks associated. It is our intention to disclose this target in 2025.”
Then there’s the fact that PNC closed the T or C branch… We’re looking for another bank.
Eco-trend setting banks
While researching PNC Bank, I discovered the Net Zero Banking Alliance. The NZBA is “UN convened, bank led.” At least two-thirds of the 135 members “have now set [2030] targets aligned with 1.5°C scenarios” set in the 2015 Paris Climate Accords. Three U.S. banks are members.
Climate First Bank. Their website claims that CEO and Founder Ken LaRoe established the world’s first commercial bank dedicated to fighting the climate crisis. They are headquartered in Florida.
Areti Bank claims “100% sustainable investing.” They are headquartered in Puerto Rico.
Amalgamated Bank has roots in New York City’s union movement. Priscilla Sims Brown, President & CEO (a person of color) says, “From decoupling our deposits with the fossil fuel industry to investing proactively in climate solutions, our work demonstrates the central role banks have in creating a sustainable economy for future generations.”
Mighty, a bank and credit union comparison website, lists another 13 banks and 10 credit unions that don’t invest in fossil fuels. They say their list is incomplete.
Unfortunately, none of these paragons of virtue have branches in Truth or Consequences.
Engaging local prospects
My search for local eco-friendliness narrowed down to three banks and a credit union.
My email asking for eco attributes to Bank of the Southwest yielded topics like LED lighting and recycling within the branch. The Mighty assessment is not much more reassuring.
White Sands Credit Union in T or C was definitely a candidate, but the manager was unwilling to talk about the credit union’s portfolio.
At Citizen’s Bank of Las Cruces, the T or C branch manager graciously abided my mission to find a bank that did not invest in fossil fuels, and even bought a copy of my book. She referred me to the Senior Vice President of Operations. He was also cordial, but he declined to share data relating to the bank’s investment portfolio. Nor could he offer ESG screening criteria for loans.
Was my bar too high? At least I let folks in responsible roles know that a potential customer (and environmental journalist) cares about our climate.
An inauspicious winner
I only learned about First Savings Bank through my interviews at Citizen’s Bank. I’d passed by First Saving Bank a hundred times without noticing it. Their signage is pretty modest. Their website is similarly unimpressive. Put simply the bank does not brag. They have 24 branches in six states with a billion dollars in assets – an “Intermediate Small Bank”.
Michelle Romero, the manager (“market leader”) has been with the bank for 23 years. During the course of our conversation, she mentioned that she was also the loan officer. That intrigued me since the website did say that all loan decisions are made at the local level. I tentatively asked, “Does your branch invest in fossil fuel companies?”
Her answer was matter of fact. “Not that I know of.”
Hmmm. Here, in these circumstances, I can trust that answer. Out of respect I followed up with an email to make sure I heard Michelle’s answer accurately.
Besides, the T or C branch of First Savings Bank has financed a couple LEED buildings and a business with an electric vehicle charging station. And they don’t sell mutual funds that are often laden with fossil fuel companies.
I learned from the Mighty webpage that First Savings Bank lends to a far higher percentage of small business, public works, and small farms than the industry average. Likewise, the 2021 Community Restoration Act (CPA) Performance Evaluation – “outstanding” – assures us that First Savings doesn’t discriminate against Native Americans and people of color.
There you have it. We have a climate winner.
Takeaways
What can we learn from this esoteric quest to find an eco-friendly bank?
Rosy ESG reports don’t necessarily tell the whole story.
Reputation may be a point of leverage in influencing otherwise disinterested institutions. A bank or credit union needs lots of loyal customers.
Check out the Banking Climate Crisis website for egregious carbon investors.
We have choices. There is a rich diversity of banks and credit unions in this country.
Don’t tell me it isn’t possible for a bank to go fossil free. Check out the Net Zero Banking Alliance for banks and credit unions that have made that commitment.
The Mighty website is helpful in identifying the social and environmental attributes of banks and credit unions. However, not all banks and credit unions are listed.
Relatively small banks which lend primarily to local customers are more likely to avoid fossil investments as a standard practice. We crew members of Spaceship Earth need to search them out.
This report draws from information presented in Jon Biemer’s book Our Journey to Sustainability: How Everyday Heroes Make a Difference (2024). Jon is a member of the Society of Environmental Journalists; and he is registered as a professional engineer in the state of California.
