How Switching Your Bank Can Help Stop Climate Change
BY AMBERLY CLARK
When talking about climate change, phrases like fossil fuels, emission levels and global average temperatures are very popular. What is not as common is to include banks in the discussion as a main contributor to the climate crisis.
Art by Anusha Goswami
According to a comprehensive report done by the Rainforest Action Network, Indigenous Environmental Network, Sierra Club and other prominent environmental organizations published in 2020, thirty five of the world’s major private-sector banks have given 2.7 trillion dollars to fossil fuel industries over the past four years. This mind boggling number is especially worrisome because it was invested into fossil fuels despite the Paris Agreement being enacted in 2016. Over the past four years since the Paris Agreement, the leader of this fossil fuel financing fiasco is the American based bank JPMorgan Chase. On its own, JPMorgan Chase has invested a whopping 269 billion dollars into fossil fuel companies from 2016 to 2019. When compared to various other private sector banks from around the world in terms of fossil fuel expansion, fracking, Arctic oil and gas, coal mining, offshore oil and gas, and Tar Sands oil investing, JP Morgan Chase was the leader for funding in all of these categories. The next three largest fossil fuel investing banks are also American based, with Wells Fargo, CITI, and Bank of America taking second through fourth place. Investing in fossil fuel companies has not slowed down at all since the Paris Agreement, and has actually increased as shown in the graph below.
Graph depicting rising financing levels for fossil fuel companies since the 2016 Paris Agreement.
So why is understanding the link between banks and fossil fuel companies important? According to Mark Carney, the United Nations Special Envoy for Climate Action and Finance, banks are currently giving enough money towards carbon-intensive companies to confirm a 4℃ rise in global temperatures in the near future. This is more than double the proposed plan to aim for only 1.5℃ global heating set by the Paris Agreement, and would have catastrophic consequences for the world’s population such as devastating droughts, heatwaves, rising sea levels and resource shortages. Banks are investing in a harmful future for humanity as a whole, and are continuing to utilize fossil fuel companies because they are profitable. The good news is that as a customer and contributor to the economy, each one of us has the power to choose what bank to use and what our money is put towards.
The first step to check if your own bank is investing in fossil fuels is to look at the list of banks compiled in the Banking on Climate Change Fossil Fuel Finance Report 2020. Next, visit your bank’s website to see if they are a Certified B Corporation. This certification is key because it is only given to banks and other companies that stand by their word to promote a more sustainable and ethical way of living. Check to see if your bank is also a Global Alliance for Banking On Values member, which is another prestigious certification that proves the transparency of a bank’s progressive and environmentally focused goals. After taking these steps and doing as much research on your bank’s potential links to fossil fuel investments as possible, call your bank to ask if there are any records of their yearly investment report available for the public to look at. If after following these steps it is clear that your bank does in fact invest in fossil fuel companies, do not fear. Changing banks may seem like a hassle at first, but the effort pales in comparison to the beneficial impact your money will have for the Earth and humanity’s well being. What follows is a list of banks that invest in ethical, environmentally friendly companies to help promote a more sustainable future.
The first bank to be highlighted is the U.S. based Amalgamated Bank. With a 100% commitment to clean energy investments and no fossil fuel lending at all, Amalgamated Bank is paving the way for more banks to follow their lead and ditch fossil fuel investments. They also have created a method to make it easier for their members to pay for solar panels, and are actively supporting several nonprofit organizations taking on climate change and other social justice issues like mass incarceration and immigrant rights. In 2019, Amalgamated Bank received the Forbes: Best In State Bank in California award for its groundbreaking approach to environmentally friendly banking, and is a respected bank worldwide for its efforts to make the world a better and more just place.
A second option is Sunrise Banks. Based in Minnesota, this bank is an excellent choice due to its dedication to the 3C Initiative, which was established to help keep companies on track with the Paris Agreement to keep global heating to 1.5℃. They also are recording the carbon impact of their investments and educating staff members about how lifestyle changes can help reduce a person’s carbon footprint. To top it all off, Sunrise Banks has been recognized as a top Certified B Corporation for seven years in a row.
One more bank that is saying no to fossil fuels is Aspiration. Based in the U.S. and completely online, Aspiration incorporates sustainability into the core of their company by giving members a chance to monitor the carbon impact of their purchases and adopting a cash back program when members buy from companies that are dedicated to sustainable practices. Aspiration is also a Certified B Corporation and 1% for the Planet member, which means that it gives at least 1% of profits every year to climate change combating groups and environmental organizations.
Bank of the West’s debit card for the climate.
If switching banks is something that is not realistic due to personal situations, consider getting a separate 1% for the Planet debit card from Bank of the West. The card itself is made from 100% biodegradable plastic, and comes with no monthly fee or minimum balance. Users can track their own carbon footprint through an app that reviews their purchases as well. This feature is especially exciting because users learn more about which products require high levels of emissions to make and which ones don’t, and empowers them to become a more carbon conscious consumer.
Through cutting ties with fossil fuel companies, banks can take an enormous step in curbing carbon dioxide emissions and climate change itself. It is imperative that more banks follow Amalgamated, Sunrise and Aspiration’s lead and start to finance hope for a greener future. Money has power, and it is up to the public to hold big banks accountable for investing in companies that are protecting instead of hurting the Earth. If after switching banks you want to learn more about big banks and fossil fuels, visit https://www.fossilbanks.org/#banks for further information about ways to continue the campaign to stop fossil fuel financing.