AI puts B Corps’ values to the test

Beneficial State Bank is in a bind. As a certified B Corporation, the Oakland, California-based community development bank is built around social justice, climate accountability, and financial success without funding fossil fuels or private prisons. Artificial intelligence could help it meet those goals and make lending more inclusive. But using it requires some ethical gymnastics. Until now, Terra Neilson, Beneficial State Bank’s chief impact officer, says it was easy to put AI in the “unethical” category. Its environmental footprint and social harms are regular headlines. But a recent project complicated that view. Neilson says the bank just extended a pilot run by Beneficial State Foundation, its nonprofit majority shareholder, using Stratyfy’s AI-assisted credit decisioning tool to improve efficiency and reduce systemic bias in credit underwriting. BetterFi, a Tennessee-based community development financial institution participating in the pilot, has already used the tool to increase approvals within BIPOC communities by 21 percent. Neilson says if the banking system can use AI to find and correct those blind spots, it could help reduce the redlining and bias that have long kept marginalized groups from accessing capital. Doing so, however, means weighing AI’s benefits against its costs. “You get decision fatigue,” Neilson says. “We’re being really intentional in this moment to say, what are the harms and what are the benefits that are worth the costs that we see?” She says being a B Corp and mission-driven organization requires scrutinizing technology and vendor relationships to make sure they align with the bank’s intent. “AI is definitely in a world of its own because of the potential to bury the trail between decision and impact,” Neilson says. The bank is part of a growing group of B Corps trying to reconcile AI with their environmental, social, and governance commitments. As backlash grows over AI’s carbon footprint, which recent research equates to New Yo