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Berkshire Bank SRI portfolios

The role of a local or regional bank involves more than just providing the standard financial services. Berkshire Bank, which serves the Northeast region, has excelled in being a true community bank for its customers. And now, it’s also offering its clients socially responsible investment (SRI) portfolios.

Owned by Berkshire Hills Bancorp and headquartered in Boston, the bank operates 106 branch offices in New England and New York. It manages about $12 billion in assets and is a member of the Bloomberg Gender-Equality Index.

Berkshire Bank Wealth Management leverages multiple ESG data aggregators and combines them with proprietary research and company engagement to create SRI portfolios. Those include companies that show a solid track record across various ESG metrics and strong fundamental attributes that contribute to the long-term sustainability of communities.

Environmental factors include human health and product lifecycle management, carbon emissions, biodiversity, deforestation, water, and air pollution, waste management, and water scarcity.

Photo Courtesy Daniel Sebler

On the social front, it screens for diversity standards, community outreach, workforce engagement, compensation, human rights, labor standards, and workplace safety.

For the corporate governance aspect, Berkshire reviews each company’s mission, vision, and values, its board composition, accounting standards, transparency, audits, executive compensation, lobbying, political contributions, corruption policies, and data privacy.

The SRI portfolios are suited for individual, institutional and non-profit clients. To start with Berkshire Wealth Management, clients don’t need a minimum amount of assets, which is a differentiating factor in the industry.

“We believe that by incorporating ESG factors into our research process, we are able to identify issues that impact long-term stock performance,” said Kathryn Hersey, Berkshire’s director of wealth management & chief investment officer. “Organizations that more effectively manage and mitigate these comprehensive risks can generate positive, sustainable returns and long-term outperformance, ultimately benefiting our clients, communities, and world.”

The strategy will also help direct capital toward firms that take proactive steps in bettering communities – values that are “deeply aligned with our vision of being the leading socially responsible community bank in the markets we serve,” added Hersey.

The 175-year-old bank started by providing banking services to American workers. The bank recently made a multi-year $5 billion commitment to strengthen communities in four main areas: community financing and philanthropy, support for small businesses, financial access and empowerment, and environmental sustainability.

The program is called Best Community Comeback and includes lending and investing $2.5 billion for low-to-moderate-income neighborhoods, $300 million in low-carbon projects, and opening 200,000 socially responsible customer bank accounts. For small businesses, the bank aims to provide $1.5 billion in lending, as well as financial coaching and technical assistance. Within community financing and philanthropy, it plans to offer $2.5 billion in mortgage lending, $15 million in community contributions, $3 million equivalent in employee volunteer time, and $50 million in socially responsible investments.

Photo Courtesy Carlos Muza

The bank’s efforts in the ESG area have been rewarded by multiple awards. In 2021, those included an honorable mention in American Bankers Association Community Commitment Award, a perfect score in Human Rights Campaign Corporate Equality Index, a 2021 listing in

Bloomberg Gender-Equality Index, and a Leadership Award for Corporate Social Responsibility by Communitas Awards.The Bloomberg Gender-Equality Index (GEI) is a modified market-cap weighted index that tracks the performance of public companies committed to standardized disclosure in reporting of gender data.  The index currently includes 380 companies with a total market cap of $14 trillion. The GEI screens for disclosure and performance in the areas of female leadership and talent pipeline, equal pay and gender pay parity, anti-sexual harassment policies, inclusive culture, and pro-women products and activities.


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