How to Switch to A Climate-Positive Bank!

Hi y'all,

The hard truth is that your bank is probably using?your money?to support the fossil fuel industry and climate collapse.

That’s why moving your money to a sustainable bank could be?the most impactful action you can take?to reduce your carbon footprint (or your organization’s).

So today we’re going to dive into why that is, and share resources to help you make the switch.

Let’s start with a little perspective.

The International Energy Agency?made clear ?in 2021 what researchers and activists had been?saying ?for years: To have any chance of limiting warming to 1.5°C, there can’t be any more exploration or development of new fossil fuel resources.

And yet, the fossil fuel industry continues to explore and develop new resources which would lock in unnecessary emissions and pollution for decades - and harm for centuries.

This is only possible because they are getting the money to do it from banks and insurance companies.

As António Guterres?puts it , “Fossil fuel producers and financiers have humanity by the throat.”

The 60 biggest banks have given a staggering?$4.6?trillion ?to the fossil fuel industry since the Paris Agreement was signed in 2015. In fact, their annual lending and underwriting to the industry have actually?increased?since then - clocking in at $742 billion in 2021 alone.

So cutting off the supply of money is absolutely critical to stopping the expansion of fossil fuels and reversing global heating.

At the same time, the world needs to invest at least $4 to $5 trillion dollars into climate solutions?every year?to limit heating to 1.5°C or 2°C according to?Project Drawdown ?and the?Climate Policy Initiative . In 2020, only $665 billion was invested in climate solutions. In 2021, that ticked up to about $900 billion.

So, we need to do two things:

1. End financing for new fossil fuel development and infrastructure as quickly as possible.
2. Increase financing for climate solutions by?at least?5x.

Fortunately, as it’s?our?money the banks are using to do this, we have the collective power to take it away from the dirty banks and give it to sustainable ones instead.

Our money should be funding climate solutions, not climate collapse.

So, first things first - you need to figure out…

How dirty is your current bank?

As I mentioned earlier, there’s a good chance your current bank is using your money to fuel climate collapse.

Exactly?how much?of your money is going to fossil fuels will vary from bank to bank with the biggest ones being the worst.

“The major Wall Street banks?give approximately?24 out of every 100 dollars they lend to carbon-intensive projects. Think about that - that’s?almost a quarter of your deposits?sitting in a bank (passively, you think) actually financing fossil fuels” - Vanessa Fajans-Turner, Executive Director of BankFWD

When I heard that number I was shocked - 24% toward carbon-intensive projects is?a lot.

But it makes sense when you consider what the?Carbon Bankroll Report ?found last year:

“For some of the world’s largest companies, including Alphabet, Meta, Microsoft, and Salesforce, their cash and investments are their largest source of emissions. In fact, for Alphabet, Meta, and PayPal, the emissions generated by their cash and investments (financed emissions) exceed all their other emissions combined.”

Or as Bill McKibben?wrote ?shortly after:?“If you have $125k in the bank, it’s producing as much carbon as the average American in an average year.”

Below are the 12 banks giving the most to the fossil fuel industry, led by the big four in the US: JPMorgan Chase, Citi, Wells Fargo, and Bank of America.

The best way to see whether?your?bank is financing fossil fuels is to?use a tool like this one ?created by Bank.Green (great for international banks as well!) or?this one ?created by BankFWD, The Outdoor Policy Outfit, and Green Portfolio (compares the impact of dirtiest banks in the US to the most sustainable ones).

Fortunately, if you discover that your bank is financing fossil fuels, don’t worry - there is good news: there are some really exciting sustainable banking options now!

Switching to a Sustainable Bank

Quick reminder: I’m a sustainability nerd - not a financial advisor. I’m sharing this to educate people on the wide-ranging climate impacts of your cash depending on which bank you use. So, as with all financial decisions, please do your own homework and/or talk to a financial advisor!

Moving your money is a personal decision and there are a lot of things to think about to make sure the bank you choose is right for you. I’ll share how I thought about picking a new bank for me, but everyone has different needs so I would highly recommend you check out Third Act’s?“How to Switch to Better Banks & Credit Cards: FAQs” ?for a more comprehensive overview of factors to consider!

Personally, my top priority was to maximize positive climate impact. And, the way I think about it, there are two key pieces of information you need to know to get a sense of a bank’s climate impact:

• What percent of deposits go to fossil fuels?
• What percent of deposits go to climate solutions?

At the very least, banks calling themselves sustainable should answer the first question with a “0” for fossil fuel financing. And the higher their percentage is for climate solutions, the more climate-positive the bank is.

I’d recommend you check out Bank.Green’s?list of sustainable banks ?to start your search. You can select the country you live in and they’ll share what your best options are!

For people in the US, the list is actually quite long. If it helps, panelists at our?Sustainable Banking & Investing webinar ?the other week gave shout-outs to Amalgamated Bank, Atmos Financial, Clean Energy Credit Union, Clearwater CU, Climate First Bank, Beneficial State Bank, and Sunrise Banks as good options for people to check out.

I can speak to two of those banks from experience.

The first is Amalgamated, which we chose to be Crowdsourcing Sustainability’s bank back in 2020. They’ve been around for 100 years and we’re big fans of their values and positive impact!

The second is?Atmos Financial . This is the bank I personally switched to over a year ago because I believe they are the most climate-positive option available.

Reasons I bank with Atmos Financial:

• 100% of my money goes to climate solutions.
• They have a 2.4% interest rate for customers who donate monthly to a climate nonprofit (even if it’s just $1. And instead of charging transaction fees, they give 100% of the donation to climate nonprofits, like Crowdsourcing Sustainability!)
• Smooth online banking experience.
• Gives you cash back on purchases with hundreds of sustainable companies.
• They’re working to change the entire banking industry through their business model. Atmos is FDIC insured through their sponsor, but they’re not?technically?a bank themselves. This allows them to put 100% of your deposits into climate solutions and help make lots of other banks more sustainable.

The people are great, they’re doing fantastic work, and you can see the impact your money is making right in the app which is pretty cool. My one wish really is that they had a credit card! They are working on it, but right now they only have a debit card.

As mentioned above, there are a lot of good options. If you happen to check out or choose Atmos Financial, please use?this link . Crowdsourcing Sustainability is one of their climate nonprofit partners and if you sign up with?our link ?we get $20. Trust me, every little bit helps small and scrappy nonprofits.

If all this info is starting to feel a little overwhelming, here’s a checklist we put together for you :)

The above section will be helpful whenever you decide to switch your bank. But I’d encourage you to do it as a part of the major day of action happening on 3.21.23, organized by Third Act! Thousands of people will switch their money at the same time so the biggest, dirtiest banks really feel it. You can sign the?“Banking on Our Future Pledge” ?if you haven’t already and?send a letter ?to your bank when you leave, letting them know why!

And for those who want to make this pressure on banks more visible and raise awareness in your community,?check out Third Act’s map ?to see if there’s an event near you!

If you can’t make it to a local event, we’ve got you covered!?Join us on 3.21 for a "How to Move Your Money from Climate-Bad Banks" workshop led by THIS! Is What We Did.

Switching your?organization’s?cash is also critical!

In fact, it’s even?more?impactful - simply because?there’s a lot more of it.

For the first time last year, researchers made a groundbreaking discovery: “climate-leading companies are passively channeling hundreds of billions of dollars a year into the sectors driving the climate crisis” because of which banks they use.

I mentioned it above, but it’s worth repeating:

“For some of the world’s largest companies, including Alphabet, Meta, Microsoft, and Salesforce, their cash and investments are their largest source of emissions. In fact, for Alphabet, Meta, and PayPal, the emissions generated by their cash and investments (financed emissions) exceed all their other emissions combined.” -?The Carbon Bankroll Report

The report also has ten strategic solutions for employees and their corporations to consider to decarbonize their financial supply chain:

1. Demand emissions reporting and transparency.
2. Move the money you can.
3. Demand measurable and high-impact green bonds.
4. Create new climate-friendly financial products.
5. Fuel green demand.
6. Can’t change banks? Then change your bank.
7. Issue a carbon-reduction banking challenge.
8. Put high-carbon banks in “the freezer box”.
9. Look beyond your cash.
10. Model full accountability in accounting.

More details on each solution and much more?in the report ?so definitely check it out!

Two more resources:

• BankFWD has put together a?useful resource ?on “Questions to ask your bank + Explaining this Topic to Finance Teams”.
• Project Drawdown also has a?great resource ?to help people make their finance job a climate job.

So, now that we all know, I believe it’s time for each of us who cares about climate to put our money where our mouth is.

Afterward, you’re going to feel?fantastic?knowing that your cash is supporting climate solutions rather than climate collapse!

All the best,

Ryan

P.S. Huge shoutout to the amazing work being done by the following orgs that are providing more transparency, awareness, and resources for addressing this critically important financial issue:

Third Act ,?BankFWD , Bank.Green ,?The Outdoor Policy Outfit ,?Climate Safe Lending Network ,?South Pole ,?Rainforest Action Network ,?Banktrack ,?Indigenous Environmental Network ,?Oil Change International ,?Sierra Club ,?Reclaim Finance ,?Urgewald ,?Stop the Money Pipeline ,?Switch it ,?THIS! Is What We Did , Bank for Good , and I’m?sure?there are more - let me know who I’m missing!

What's up in the CS Community?!

Join us on Third Act's National Day of Action to learn how to align your money with your values!?THIS! Is What We Did ?is offering the CS Community a 90-minute workshop on how to move your money out of the big banks that are financing the climate crisis. We'll introduce you to a step-by-step model to help you navigate this often sticky process, with comprehensive resources and a Q&A facilitated by people who have successfully moved their money and helped many others do it too!

Sign up here !

2040 is a hybrid feature documentary that looks to the future but also guides us in our choices, actions, and visions right now.?A story of hope that looks at the very real possibility that humanity could reverse global warming and improve the lives of every living thing in the process. Join us for a screening of the film, followed by a Q&A with the film's creator and Director Damon Gameau!?After experiencing 2040, you'll get to ask Damon your burning questions and get an extra dose of inspiration to go out and be an agent of regeneration.?Sign up here !

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Learn more and register here.

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(This article was originally published on?Crowdsourcing Sustainability .)