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"Green banks" is the term used to describe banks that are as concerned about improving communities and protecting the environment as they are about making money. The word "green" in this context means environmentally friendly. Green banks follow in the footsteps of the green movement, which attempts to bring environmental issues into the public eye. These banks offer services such as lower interest rates for green projects and banking practices that have a small carbon footprint. Though the term "green banks" is usually used to describe banks that are specifically dedicated to green financial ideals, some mainstream banks have also started offering green incentives.
Founders and proponents of green banks often describe them as having a triple bottom line. Traditional banks focus on acting as financial intermediaries and making money in the process, whereas the goal of green banks is threefold. They want to make money, but they also want to improve society and protect the environment. Every service and loan provided by green banks is designed with these three goals in mind.
The idea of a triple bottom line bank stated in 1973, when ShoreBank was founded on the South Side of Chicago. The bank wanted to make money while focusing on the social and physical needs of the community. It was called an urban partnership bank. Decades later, the first green bank was founded as a division of the original bank, with a special focus on environmental concerns.
Green banks cater to businesspeople and individuals who are concerned about the environment. Many provide most of their services online to decrease their carbon footprint. They offer deposits by scanning, digital signatures to approve documents and interaction with bank associates via video chat. Branches are built using environmentally safe practices and usually are located close to public transportation to keep patrons from having to drive to them.
One of the major initiatives of green banks is offering incentives for green building and transportation. Some offer lower interest rates on home and building loans if the building being funded meets national green building standards. The higher the green rating, the lower the interest rate. Others offer special loans for green projects, such as installing solar panels on a home.
Some traditional banks have followed the green bank movement. Many offer green auto and home equity loans. Green auto loans allow for an interest rate reduction on any vehicle that meets certain emissions standards. Some traditional banks' home equity loans also offer an interest rate reduction for green building practices, though they are usually less flexible than those offered by green banks.
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