Sustainable Banking

In creating this website, I have been researching a variety of potential topics to write about. This has allowed me to learn a lot about how to live more sustainably along with you all. One topic that has recently come to my attention is banking. I have belonged to Bank of America for over a decade and it was not until June 2021, that I discovered they use the money in their customers’ accounts to invest in oil and gas projects. Wells Fargo, JP Morgan Chase, and other big banks are guilty of these practices as well.

The Paris Agreement was signed in 2016. The idea was to gather many of the world’s nations together to commit to lowering the carbon emissions from every country who signed on. Between 2016 and 2020, the 60 largest commercial and investment banks financed $3.8 trillion in fossil fuel companies. Even worse, 33 of these 60 banks have increased their financing of fossil fuel companies by up to 1,200% in that time frame. (Bank of America and Citi increased by about 20% and U.S. Bank by over 100%). Needless to say, governmental bodies can only do so much when our money is actively funding unsustainable practices.

Naturally, discovering this issue made me seek out alternatives. I will first discuss options available to those who live in the U.S. But for those reading from other countries there are a number of great opportunities for you as well listed at the end of the article! (Please note: I am not affiliated in anyway with any banks mentioned in this article).

Unfortunately, there are not many nationwide banks that provide environmentally friendly services. Most large banks provide options for “eco-friendly” credit cards. These typically allow you to choose a card which will donate a percentage of your spending to specific organizations which focus on environmental causes such as the Sierra Club or World Wildlife Fund (WWF). Switching to a credit card like this is certainly better than nothing, however, you are still banking with an entity which funds oil and gas projects. Therefore, these credit cards are just band-aids for a much larger problem. Ideally, you would find a way to switch banks entirely.

The first option I found involves banking at a more local level. There are many benefits to banking locally including more personal service and more transparency on where your money is going. I am currently living in Colorado and reached out to several banks in the area and asked about where their investments go. A few banks could prove they do not finance oil and gas projects while a couple of banks provided statements which showed funding does go to these practices. A few others did not respond at all, leading me to believe they also funded unsustainable practices. Long story short, if you wish to bank locally, do a little research and make sure you know where your money is going!

On a national level I did find a bank which has proven to provide a plethora of environmentally friendly options to their customers. Aspiration is a bank which will help you lower your carbon footprint while changing almost nothing about your day-to-day life once you have your account set up. They have quickly grown to tens of millions of customers which want to ensure their deposits are 100% fossil fuel free. Aspiration gives away 10% of their profits to non-profit organizations and have also committed to ensuring their investments are 100% firearm. They are an online bank with a very large network of free to access ATMs and a very user-friendly online interface.

As part of my commitment to lowering my carbon footprint by 21% this year, I decided to sign up and begin switching to Aspiration. So far, I have found the experience pleasantly easy and in line with my values. There are many ways to track how your spending reduces your carbon footprint with them as opposed to other major banks. They have cards which will offset all the carbon from gas purchases for your car. They also offer special rewards to people who spend money at socially conscious organizations.

One of my favorite features is the option to round up every purchase to the nearest dollar and donate it to planting trees. There are multiple ways in which banking through Aspiration will plant trees and your main account page will track your progress. As a customer I am rewarded financially by hitting certain milestones. Lastly, I can easily see how much carbon I am offsetting annually per dollar I switch into their account. If you would like to explore how banking with Aspiration could work for you, check out their website.

As promised, here is a small list of alternative banking options for international readers:

· Tomorrow Bank (European Union): Has 4.9-star aggregated reviews, 33 million + trees reportedly protected, and 31.5 million € invested in sustainable products.

· Triodos Bank für Privatmenschen (Germany): Named the best sustainable bank for the fourth time in 2020 and the first bank in Germany with B Corp Certifications. Meaning they meet strict social criteria to the environment and transparency with corporate governance.

· Mebank (Australia): They offset all carbon emissions making them “Climate Active certified” Carbon Neutral. 100% Fossil fuel investment free and paperless banking.

The last thing I would like to stress is be careful not to increase your spending just because the money is now going towards good causes. Thoughtless consumption of products is one of the root causes of our environmental problems and intentional spending should still be a priority, even for those banking with places like Aspiration. Additionally, check the fine print of the credit cards to be sure the money being donated is truly going to the organizations they claim. Even if the money is being donated to the non-profit, check to make sure that organization is making a positive impact. A resource I recommend using is Give Well. They can help you see which organizations have the greatest positive impact on environmental causes to see what bank/account/credit card to put your money behind.

As always, thank you so much for reading and please reach out to me via email at cutyourcarbonfootprint@gmail.com if you have any questions! I hope your journey to 21% carbon reduction is going well.

-Nick Engler

Cut Your Carbon Footprint Founder