Green Banking: Investing In A Cleaner Future

Hello Neighbor!

We’ve been talking about consumer behaviors and improving them to be more sustainable. One thing we do almost daily is spend money. Credit cards, debit cards, apple pay, Venmo, PayPal – the list goes on. While we might think about what we choose to buy as consumer behavior, the banks we use and the apps we use are also part of that equation.

A lot of the time, the bank or lending institution itself is the last thing on our minds because everything is digital. We don’t see the faces of the people behind our banking like we used to. We don’t talk to them each time we need to get our money out. Sometimes we will never talk to who is dealing with our money.

Where does your money go?

Banks make a profit using the money in your checking, savings, or other accounts to invest make loans to other people, businesses, and organizations. It doesn’t just sit there waiting for you to access it. You don’t have a say in making those financial decisions or investments even though it is your money because you’ve already decided to bank there and trusted them with your dollars.

Expanding Oil And Gas

But companies and projects that fuel the fossil fuel sector and lead to deforestation, new oil pipelines, and pollution all have to have financial institutions backing them as well.

Expanding oil and gas is the last thing we need to do – and we may be funding it from our own pocket without even realizing it.

Medium reported that “In the years 2016, 2017, 2018 (that is since the Paris Climate Accord was adopted), JP Morgan increased its funding to fossil fuels by nearly $200 billion — a third more than Wells Fargo (c.$150 billion increase). The competition for the minor places was closer. Citi (Bank) increased its financing by $129 billion and BofA by $107 billion.”

Even today, fossil fuel financing remains dominated “by four U.S. banks — JPMorgan Chase, Citi, Wells Fargo, and Bank of America — who together account for one-quarter of all fossil fuel financing identified over the last six years.”

The problem is that fossil fuel projects continue to catapult us into more climate chaos. We need to be defunding, not supporting these types of projects.

One report says that “Potential emissions from fossil fuels already in production or under construction — the wells already drilled or being drilled, the mines already dug — takes the world well past 2°C of global heating, and in-production oil and gas alone more than exhausts the 1.5°C carbon budget. Experience shows us that new oil and gas fields and new coal mines, once developed, are locked in: there is overwhelming pressure to fully extract them. Furthermore, new or expanded fossil fuel infrastructure drives expanded extraction upstream.”

Fuel doesn’t fund itself

Many of these banks have changed their language to be more environmentally friendly in the last few years or said they are committed to net zero policies decades in the future. Unfortunately, it isn’t stopping what they’re funding now for an imaginary goal that lies decades ahead of us. They’re greenwashing us, and we’re buying it – literally.

And it’s not just fossil fuel itself. We know that everything is interconnected. Climate change due to these large emitters has caused many disasters that cost too many people their livelihoods and lives. We know that it is a dirty and polluting industry – disproportionately affecting minority populations, and they are unjustly taking and using land that doesn’t belong to them – something that indigenous peoples have resisted for decades. And it continues to widen the gap between the poor and the rich – making it even more important where your dollar is held.

So that’s the situation, and hopefully, you’ve held onto hope that there are better alternatives because you read the title of this episode! “Green Banking: Investing In A Cleaner Future”

What is green banking?

What is Green Banking? The Coalition for Green Capital defines Green Banking as “mission-driven institutions that use innovative financing to accelerate the transition to clean energy and fight climate change.” While fighting climate change, ”many also have additional objectives such as improving resiliency or serving low-income communities.” You may also hear the terms ethical banking or sustainable banking.

How do they do it?

Well, just as unsustainable banks can finance sectors that advance extraction and climate chaos, green banks can finance companies that support clean energy and climate solutions.

They make capital more affordable and available to clean energy projects and companies. They co-invest and share knowledge so that these clean energy companies can thrive and the energy they’re providing can be deployed at a lower cost. Consumers can be educated on ways to get clean energy and save money.

Consumers win, and developers and investors get more of their clean energy projects funded, making it much easier for unsustainable energy sources to get replaced.

They commit to the triple bottom line – planet, people, and profit. Meaning they don’t only care about profit like the big guys do. They care about funding projects that will benefit everyone sustainably.

Certifications

A few ways to tell if a bank is a green bank is to look at their certifications.

• • Certified B Corporation
  • Global Alliance for Banking on Values
  • Fossil Free Certified
  • 1% for the Planet

These certifications should signal to you that they’re doing something good with your money. That they’re socially and environmentally conscious. They’re transparent and vocal about where their funds go and what they’re using yours for. They invest in the local communities and have consumer-friendly policies.

Even if a bank doesn’t have a certification, you can look to your local banks and see which ones are using their money for good.

Green Bank Example: Aspiration

One example of a green bank is Aspiration. Aspiration is an online-only green bank that is a Certified B Corp, 1% for the Planet, and they give back and choose sustainable investments.

They say, “Every $1,000 you transfer to Aspiration from Big Banks has the annual planet-saving climate impact of up to 6,000 fewer miles driven by the average car.”
You’ll be able to plant a planet-saving tree with every purchase you make, and you’re rewarded with cash back when you choose to purchase from sustainable companies.

You can Track your progress towards being carbon-neutral each month with their credit cards. Bank fees go towards charities, and they have an investment fund that you can be a part of that shares exactly what industries and holdings they invest in – all fossil fuel free. And as the cherry on top – their cards are made from recycled ocean plastic!

You can choose from plenty of banks to see what works for you or your business. Start researching what fits your needs and values with this list of Green Banks!

Why it’s essential you green bank

The point of all of this is that your money matters. Each time you swipe or hit buy now, you’re saying something, standing for something, so stand for something good.

Wouldn’t it feel amazing that you’re doing something good for people and the planet every time you buy something? For yourself? And you might even get financially rewarded for it! Amazing!

We need to be careful about what we buy, who holds our money, and what they do with it. We need to cut these unsustainable projects off at the source – their capital.

And the best part is you don’t have to be a financial wiz to do it. Helping serve the planet and people can be done by just switching your funds from one account to another and letting the certified green banking institution you trust to take it from there every time you purchase like you normally would.

It’s taking your sustainable purchases and allowing them to go a step further toward zero.

Something to Grow On

For this week’s something to grow on, you get another challenge! Count how many times each day you use your banking institution. You can make a tally on your phone, on a piece of paper, or just mentally recap at the end of each day. If you’re good at budgeting, you can even look at how much money you spend each month and how much you keep in the bank.

Look into your banking institution and see if you can find out where your money is going. If it’s hard to find an answer – it may be time for a change.

Switching is really easy (I promise I just changed mine over, and it took about 15 minutes). You can slowly move money from one account to the other, making updates to your subscriptions or recurring bills, until you’ve got your money invested somewhere that aligns with your values.

I promise it will feel so much better!

I’ll end with a quote adapted from Jana Stanfield –

“You cannot do all the good that the world needs. But the world needs all the good that you can do.”

Until next time, thanks for joining me, neighbor.