When we consider ways to make a positive impact on our environment, many of us think of choosing energy-efficient cars, eating less meat, recycling our plastics, upgrading to LED lights in our homes, and planting trees. Did you know that banks are one of the biggest offenders to the environment?
Let’s take a closer look at how banks contribute to climate change and what you can do to make a difference.
Wait … How Do Banks Affect Climate Change?
We can tell you about eco-friendly banking alternatives, but first, we should tell you why they even exist. How are banks contributing to the climate crisis? We’re not even talking about how much energy it takes to run these facilities (that’s a whole other issue).
One of the biggest benefits of personal banking is that we can earn interest on our savings. That can feel like a huge reward and incentive to keep our money in the bank. The problem? The world’s largest investment banks and financial institutions have been loaning money to the gas, oil, and coal extraction industries.
In fact, 35 of the biggest banks in the world have contributed a staggering $3.8 trillion to fossil fuel companies since the Paris Agreement (which was established to help reduce climate change) was made in 2015. The biggest offender is JP Morgan, which has contributed $269 billion to the fossil fuels industry. Wells Fargo, Citi, and the Bank of America are also major contributors.
Since the fossil fuels extraction industry has received so much financial help, they have continued to operate. When oil, gas, and coal are burned, they cause significant amounts of greenhouse gasses to be emitted into the environment — leading to global warming.
How YOU Can Make a Difference in Climate Change
What does this all mean for the consumer? Well, for starters, the banks and financial institutions you choose to do your banking with matters.
The good news is that you can make a difference when it comes to saving the environment. Your banking habits and financial choices can help contribute to positive change — or they can add to the problem. Here are some of the things you can do to try to reduce climate change.
Research your bank’s policies: Find out if the banks and other financial institutions you use for checking, saving, and investing are contributing to this climate crisis.
Choose an eco-friendly bank: Although many banks throughout the world are contributing to the environmental crisis, some banks are actually committed to not financially funding the extraction of gas, oil, and coal. Look into banking and investing with banks that have made this promise to our environment.
Consider banking with a credit union: These financial institutions are far less likely to contribute to fossil fuel extraction than other banks.
Look into ethical pension funds: Pensions also contribute to the problem, so it’s important to research pension fund provider policies. Consider talking to your employer about switching to another provider if the one they typically work with is financially backing fossil fuels.
Be careful when making charitable donations: When you donate to charities and universities, you may also be contributing to the problem. The reason? Many of these organizations and establishments tend to invest their donations, so charitable donations can also be funding fossil fuel extraction. Research a charity’s policies before you donate. Additionally, consider donating to organizations dedicated to saving the environment.
Making smarter banking and investment decisions is just another way you can make a positive difference in climate change. On your next “Meatless Monday,” consider talking to your family about how their banking decisions are affecting the environment, too. It’s up to all of us to do our part to save the planet, one savings account at a time.