To combat climate change, the world must invest around USD 4 trillion annually in clean energy by 2030, according to the International Energy Agency (IEA). Banks are vital to this transition, with values-based banks already making significant strides. By divesting from fossil fuels and investing in renewable energy, these banks are driving progress toward a low-carbon economy. 

The United Nation’s Sustainability Development Goal 7 (SDG 7) aims to “Ensure access to affordable, sustainable and modern energy for all.” Yet, public funding for clean energy sources in developing countries continues to be in sharp decline. It is estimated that by 2030, for example, unsafe and inefficient cooking techniques will still be used by one in four people globally. 

And that’s where values-based banks, members of the Global Alliance for Banking on Values (GABV), come in. They play an active role financing the development of renewable energy generation technology to lower carbon emissions, and help customers to reduce their energy costs.  

Leading the charge towards a low-carbon economy 

Values-based banks are taking a significant step forward in a global effort to reduce their carbon footprint. Many member banks have introduced initiatives to measure and disclose the greenhouse gas emissions of their loans and investments.  

While the world’s 60 biggest banks have committed almost USD 7 trillion to the fossil fuel industry since the Paris Agreement, according to the 2024 Banking on Climate Chaos Report, most members of the GABV exclude financing of any fossil fuel-related activities. Instead, they prioritise clean energy projects in their loan portfolios. Bank Australia, Triodos Bank, Vancity, Amalgamated Bank, Alternative Bank Schweiz, GLS Bank or Ecology Building Society have already committed to ambitious net zero targets as early as 2035.

Additionally, 25 GABV banks from 19 countries have endorsed the Fossil Fuel Non-Proliferation Treaty Initiative, leading the way in an important global campaign and urging the financial industry and governments to follow suit. This initiative aims to accelerate the transition towards renewable energy including by phasing out the production and use of oil, gas, and coal.

Clean energy product development 

This long-standing support to the sector provides values-based banks with a deep understanding of renewable energy technologies, market dynamics and regulatory environments, so that they can develop tailored sustainable energy products to their customers.  

These banks take a proactive role in product development and use finance to support cutting edge renewable energy technology to increase efficiency and reduce implementation costs. They mitigate risks commonly associated with renewable energy projects, ensuring that viable and sustainable products are delivered. And by supporting energy efficient products, values-based banks drive economic and social benefits for the communities they serve. 

Pan-European GABV member Triodos Bank, for example, started to promote sustainable energy in 1986, after the Chernobyl nuclear disaster in Ukraine. They were the first bank in the Netherlands to finance wind turbines. Today, with branches in Netherlands, UK, Belgium, Spain and Germany, Triodos Bank is the most active clean energy lead arranger by total number of deals (140), with a total deal value of over half a billion USD. Through impact investment funds, Triodos Bank offers debt, mezzanine and equity finance for new and existing renewable energy ventures, as well as energy efficiency and storage projects.

Sunrise Banks, in Minneapolis (USA), offers net zero financing for commercial projects that reduce or avoid carbon emissions, including installing energy efficient upgrades. An excellent example is the Firefly building in South Minneapolis. This modern apartment building incorporates various energy-efficient features such as large, insulated windows, advanced HVAC systems, energy star appliances, extra insulation, low-flow water fixtures, and a flat roof for solar panels. Supported by a USD 1.75 million net zero construction loan from Sunrise Banks and a USD 100,000 4D Green Cost Share Energy Grant from the City of Minneapolis, the project promotes sustainable living. Firefly’s design maximizes natural light and energy efficiency with southern-facing windows in all units and shared amenities like an e-cargo bike, outdoor spaces, and proximity to major thoroughfares and public transit.

Sunrise Banks complements the offering of net zero financing with net zero deposits. This allows savers to choose to direct their deposits to net zero projects that reduce or avoid carbon emissions.

In Montana, also in the USA, Clearwater Credit Union has launched a new Clean Energy Certificate of Deposit (CD). It provides depositors with an opportunity to earn competitive returns while simultaneously making a positive impact with their deposits. Ekobanken, in Sweden, offers Transition Loans to companies and associations that want to change their operations in a sustainable direction, mainly on clean energy and mortgages.

Some examples of product development include green small loans and mortgages designed for individuals and businesses that aim to invest in energy efficient installations such as wind turbines, solar panels, or energy efficient buildings. Ecology Building Society, based in the UK, provides financial rewards to those increasing the energy efficiency of their homes.  

In Honduras, Banco Popular has developed a solar panel product to meet the energy needs of its customers, whether in the home, business or production units, in an environmentally friendly manner. More than 7,000 customers have benefited from this special loan, increasing efficiency in daily electricity consumption and lowering costs in the process. 

To improve access to renewable energy In Uganda, Centenary Bank developed the Cente Solar Loan in 2020, a short term, affordably priced loan to finance the purchase and installation of solar power. The loan has benefited residential homes, business premises, hotels, schools and hospitals. 

Empowering energy communities through sustainable finance 

Values-based banks are an essential partner in fostering green energy communities—collective initiatives where citizens, local businesses, and public entities collaborate to produce and manage renewable energy. They provide tailored finance solutions to support the creation of these cooperatives, such as green loans and sustainability bonds, values-based banks empower communities to take control of their energy needs.

These energy communities not only drive local economic resilience and social cohesion but also accelerate the transition to a low-carbon economy. 

GLS Bank, an ethical banking pioneer in Germany, has been instrumental in financing renewable energy projects and supporting energy communities across the country. The bank’s approach goes beyond traditional banking to directly engage with local communities and cooperatives to fund projects that generate clean energy from wind, solar, and biomass sources. 

One of their notable initiatives is financing BürgerEnergie Berlin, a cooperative aiming to buy and operate Berlin’s electricity grid so it is managed sustainably and democratically. Through tailored financial products like green loans and sustainability bonds, GLS Bank empowers citizens to take ownership of their energy future, ensuring that the transition to renewable energy is inclusive and community-driven. 

Another strong example of the impact of energy cooperatives is vdk bank’s longstanding partnership with Energent, based in Ghent, Belgium. Projects like the new windmill in Perwez, and the heat grid installation via Beauvent in Ostend were made possible through vdk bank’s financial support. 

Banca Etica, an ethical bank operating in Italy and Spain, is at the forefront of financing initiatives that promote environmental sustainability and social equity. In Spain, the bank (under the name of Fiare Banca Etica) has been a key supporter of energy communities, particularly through its collaboration with Som Energia, one of the largest renewable energy cooperatives in the country.  

Som Energia allows thousands of Spanish citizens to become co-owners of renewable energy projects, including wind farms and solar plants. Fiare Banca Etica provides crucial financial support to these initiatives through tailored loans and investment products that prioritise environmental impact and community involvement. By backing these energy communities, Banca Etica fosters local ownership and democratic control of energy resources. It also helps to decentralise the energy market, making sustainable energy accessible to a broader population.  

Financing the future: Driving the transition to clean energy 

Values-based banks are not just financial institutions; they are catalysts for profound societal change, driving the transition towards a sustainable future.

Financing clean energy and the development of sustainable products reflects a deep-seated commitment to environmental responsibility and social equity. By mainly supporting renewable energy initiatives and refusing to invest in fossil fuels, these banks are leaders in their industry, setting a high ethical standard that distinguishes them from mainstream financial institutions. Their proactive role in financing cutting-edge technologies and fostering energy communities underscores their leadership in advancing a low-carbon economy in the countries where they operate. 

In Armenia, for example, Acba Bank actively contributes to the development of energy efficiency in the country, highlighting Armenia’s potential in solar energy. The bank supports green technologies and offers flexible financing for energy-efficient products to businesses and individuals. Acba, recognised in 2024 by Euromoney as Armenia’s Best ESG-Bank, plans to introduce new green loan procedures, including CO2 emissions calculation based on international best practices. 

A vision of a world where clean energy is available to all Americans is behind Amalgamated Bank’s recent launch of the Greenhouse Gas Reduction Fund (GGRF). The GGRF provides crucial support to bringing clean energy to underserved communities, bringing lower energy costs and new job opportunities to communities that have been historically left behind. 

As the world faces the urgent and escalating challenges of climate change, the contributions of values-based banks are more critical than ever. Through innovative approaches to financing, advocacy for sustainable practices, and deep engagement with local communities, these banks are at the forefront of building a resilient, green and inclusive financial system.

In the face of the climate crisis, their work exemplifies how the banking sector can be a powerful force for good, ensuring that the transition to renewable energy not only addresses environmental challenges but also promotes social justice and economic sustainability.