This Bank Was Founded to Combat Climate Change, and It’s Growing Fast

During the past eight years, the 60 largest banks in the world have pumped nearly $7 trillion into the fossil fuel industry, motivating climate activists to take a stand against these financial institutions and look for banking alternatives. Climate First Bank has effectively positioned itself as one of those alternatives, and like “The Little Engine That Could,” the bank’s leadership puts its mind to making big progress, then does so. 

As the world’s first digital community bank founded to combat the climate crisis insured by the United States Federal Deposit Insurance Corporation, Climate First Bank is recognized as the fastest-growing new bank in the United States since 2009. Now, it has more than $850 million in assets, flexing its strength by investing in community initiatives, including renewable energy, affordable housing and worker-owned cooperatives.

The bank was founded in 2021 with a single purpose: to create a financial institution that “centers the people, the planet and profit,” CEO Ken LaRoe told TriplePundit. Its rapid growth “is because of its mission, not in spite of it.” 

“We have a massive amount of customers that come to us with comments like, ‘I’ve been driving by this office for six months. I see all the solar. You guys believe in what I believe in. I’m moving all my accounts from Bank of America,’” LaRoe said. “We now have deposit customers in all 50 states, Puerto Rico and three countries because our online banking and online account opening is so good.”

Since its founding, Climate First Bank has originated more than $150 million in solar lending through its partnership with OneEthos — a financial technology public benefit corporation with the same parent company as the bank. The program offers solar loans without a dealer fee, a charge some lenders request of solar installers that often gets passed on to the customer, to make solar energy a more affordable option.  

The bank has financed $87 million in residential solar loans, with nearly 17 percent originating in low-income areas. Just over 32 percent of the bank’s solar loans originated in Community Development Financial Institution investment areas where the poverty rate is at 20 percent or above.

Climate First Bank is also a member of several organizations committed to transparency in banking and encouraging positive economic, social, and environmental change, including the Global Alliance for Banking on Values and 1 Percent for the Planet. Its parent company, Climate First Bancorp, is a certified B Corporation.

“All of those are exceedingly legitimate nonprofits that do thorough and in-depth vetting of their members, so that’s our guarantee and our commitment to our stakeholders that we’re legit,” LaRoe said. “We’re not greenwashing or any other washing.”

Despite its rapid growth, Climate First Bank faces challenges like Florida’s anti-ESG legislation, which restricts banks from considering non-financial factors — like environmental, social and governance — when doing business. That means if a bank refuses to do business with a person or company for social, political, or ideological interests, the state deems it an unsafe and unsound banking practice, LaRoe said. 

“It’s insanity to dictate to a bank who you can or can’t do business with," LaRoe said. "What if a fracker came to us? We know nothing about fracking because we’re into renewable energy ... We have subject matter experts in solar, we have subject matter experts in renewables. It would be imprudent, unsafe and unsound for us to loan [the fracker] money because we don’t know how to underwrite it.”

LaRoe said he believes the law is “absolutely, profoundly unconstitutional” and hopes it will be challenged in court. 

Donald Trump’s return to the presidency adds additional measures of uncertainty for the future of climate action and clean energy. Nevertheless, during a recent conference call hosted by the bank, LaRoe said he maintains a measure of optimism because of the high consumer demand for clean energy.

“It doesn’t matter what happens on the political stage because it’s really driven by international demand to decarbonize,” LaRoe said, citing the bank’s unprecedented growth in just three years. 

And the bank aims to keep growing to meet that demand, with goals to go public in 2026 and reach $10 billion in assets within 10 years. 

“Our objective to go public in 2026 will provide the liquidity to the shareholders and, hopefully, a value bump,” LaRoe said. “That’s really important because, of course, the more scale you have, the more people you’re touching.”