Fifth Third Bank is putting $2.8 billion toward an initiative to accelerate racial equity and inclusion in the communities it serves.
The Cincinnati-based bank with a large West Michigan presence said Monday that it will provide $2.2 billion in lending, $500 million in investments, $60 million in financial accessibility and $40 million in philanthropy as part of its Executive Diversity Leadership Council’s Accelerating Racial Equality, Equity and Inclusion initiative.
The initiative is part of the bank’s commitment to inclusion and diversity focused on creating equitable outcomes for all.
The three-year pledge targets three constituent groups: employees, customers and communities. Each vertical has a specific emphasis on accelerating the bank’s progress toward an equitable environment for Black Americans.
“As we continue to make meaningful strides in advancing inclusion and diversity in our industry and in our communities, Fifth Third is committed to maintaining and extending its leadership and making a difference for our Black customers, communities and employees,” said Greg Carmichael, chair and CEO of Fifth Third. “The dedicated investment, philanthropy and lending efforts will help accelerate our progress toward promoting equality, equity and inclusion, both within the bank and in our communities, launching with a $2.8 billion commitment.”
The commitment is focused on four strategic pillars:
Strategic investments: Fifth Third will engage in comprehensive neighborhood revitalization to help improve outcomes and quality-of-life indicators for communities of color that have experienced decades of disinvestment. Through the introduction of an innovative $100 million Neighborhood Fund, the bank will focus on improving the social and environmental determinants in a community, bringing together resources and expertise from across the bank’s lines of business. The fund will conduct a competitive application process across the bank’s 11-state footprint and award at least five communities with long-term investments to accelerate impact and outcomes.
Access to capital: Fifth Third will continue expanding access to home loans and business capital. Through this pillar, the bank intends to increase its mortgage lending by 31% with a focus on achieving parity in its top eight markets where Black Americans reside. In 2018, the bank invested in a fund with the National Community Reinvestment Coalition for home ownership and rehabilitation in urban communities.
Owning a small business can help build wealth and create a legacy for business owners to transfer to their families. Yet, Black business owners can face challenges finding the capital to start and maintain their business. Fifth Third will help create opportunities for these business owners to tap into the financial support they need. Small business lending by Fifth Third is targeted to increase by 25% in people of color majority communities. The bank will continue to invest and expand partnerships with community development financial institutions to increase the sources for capital. In 2017, the bank launched the Entrepreneur of Color Funds in Detroit and Chicago, and in 2018, it launched a similar fund in Cincinnati. These programs will expand to Cleveland, Atlanta and Louisville.
Financial inclusion and education: The bank expects 25% of its new branches to be built in people of color majority tracts and low- and moderate-income communities, increasing accessibility through innovation. Through these efforts, Fifth Third said it will provide wider access to business and consumer loans, expand accessible tools for financial education and develop innovative banking solutions for the unbanked and underbanked. Additionally, the bank will continue to work with and invest in historically Black colleges and universities to support scholarships and career readiness through internships and early career development opportunities.
Fifth Third will create opportunities for and increase spending with Black-owned suppliers as part of its supplier diversity program. In 2021, it will launch a program with the National Minority Supplier Development Council to improve supplier readiness for corporate business opportunities.
Social justice and advocacy: The bank is investing and partnering with organizations that actively engage and support laws and policies that address systemic racism, create improvements in worker reentry and improve economic mobility and skill-based training, which will provide for greater access to jobs and skills for low-wage workers through workforce development programs. The bank already has committed $1 million to the National Urban League for a workforce development program that focuses on growing individual’s skills and developing the tools needed for business success.
In addition to the community financial investments for Fifth Third’s customers and communities, the Executive Diversity Leadership Council’s efforts include an employee-focused workstream to ensure the bank maintains and grows its culture of equality, equity and inclusion among its workforce.
“It is important that we collaborate with our external and internal stakeholders so that we can serve them in the most effective, impactful and sustainable ways,” said Kala Gibson, chief enterprise responsibility officer and head of business banking. “We will continue to review policies and practices to evaluate where comprehensive improvements can be made so that the bank’s employees, customers and communities are fully supported.”
Stephanie Smith, Fifth Third’s senior vice president and chief inclusion and diversity officer, said while the bank has long valued inclusion and diversity, its leaders are working to enhance equality among its employees.
“We have a responsibility to establish a more equitable workplace, particularly for our Black employees, customers, community members and suppliers,” she said. “While these challenging issues won’t be solved overnight, we are continuing the efforts toward actionable change, and we are committed to be a force of advancement.”
The bank recently unveiled six goals it plans to achieve by 2025 to support inclusion and diversity within its entire workforce and for its diverse suppliers:
- Conduct unconscious bias awareness training for 100% of employees, which was completed in 2020.
- Ensure the diversity of the bank’s workforce reflects the markets it serves.
- Grow leadership positions at each management level for women and people of color.
- Create a work environment where there is no disparity in race or gender.
- Advance the bank as a leader in inclusion and diversity.
- Achieve and sustain a 10% supplier diversity spend to increase supply chain inclusion.
More information about Fifth Third’s commitment to racial equity and equality is at 53.com/racialequity.