Social Banking: Products and Services

30 Pages Posted: 8 Jun 2010 Last revised: 20 Jul 2014

Date Written: June 7, 2010


This paper presents products and services that are connected to social, environmental, ethical, or sustainable finance. On the one hand products and services that integrate sustainability risks and options in order to create a positive financial impact are presented. Those products and services are offered by both, social and conventional banks. Their main drivers are financial returns and clients’ needs. On the other hands there are products and services striving to reach a positive social, environmental, or sustainability impact. Those are mostly offered by specialized social or ethical banks. Their main driver is the fulfillment of social, environmental, or sustainability needs by channeling capital into respective projects. Thus products and services can be structured by their financial and social impact. While sustainable credit management mainly integrates social and environmental indicators to improve the credit risk prediction and therefore mainly has a financial impact, sustainability loans and mortgages are created to foster projects and other borrowers that have a positive impact on social, environmental, or sustainability aspects.

Socially responsible investment (SRI) products could have both, positive financial and social impacts. There is a great range of different products in this field covering both, financial and social impact. The same is valid for carbon finance. In this field conventional banks create new financial products based on the Kyoto Protocol Mechanisms. On the other hands there are products and services striving to mitigate climate change by investing in projects that reduce CO2 emissions.

With sustainability savings accounts and certificates of deposits savings can be connected with social loans or other investments. They are the link between socially oriented people and institutions and those that need capital to create a social impact.

Micro-finance is maybe the most known social banking product. It provides both, a financial risk rating structure that differs from conventional loan products and services and high social impacts.

Project finance is connected to social banking since the launch of the Equator Principles for project finance. Those provide guidelines to take social and environmental aspects into account in project finance. In contrast to big universal banks, social banks are often financing smaller projects like renewable energy projects.

Keywords: socially responsible investment, microfinance, social banking, sustainable finance, environmental finance, loan, project finance

Suggested Citation

Weber, Olaf, Social Banking: Products and Services (June 7, 2010). Available at SSRN: or

Olaf Weber (Contact Author)

University of Waterloo ( email )

Waterloo, Ontario N2L 3G1

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