If You've Ever Questioned Your Bank's Ethics, Now's The Best Time To Do Something About It
The good news is that there's no shortage of ways to reduce our environmental impact every day. Online shopping? Waiting for a fuller cart before checking out helps lighten the packaging load (the U.S. ships the cardboard equivalent of a billion trees every year). Omnivore? A year of Meatless Mondays is the equivalent of not driving for three whole months. It's the little actions that add up, and that's empowering!
Ready for an elephant-in-the-room moment?
While we're avoiding single-use plastics, saying yes to lab-grown diamonds, and generally making an effort to vote for sustainability with our dollars, there's one thing that's often left out of the daily convo, and it affects our planet's health in a major way: where we bank. If you've got a checking or savings account, a retirement or pension plan, even insurance, you have a lot of power to help bring about a better future for the Earth.
So ahead of Earth Day this year, we dove into the topic. Read on for one hard-to-ignore truth about our money, why it matters for our planet, and what we can do about it.
Do you know where your money's going?
Here's the thing: When you deposit money in a bank—whether it's a traditional account or a 401(k)—the bank may use some of that money for investments. In return, you might get more money, but chances are some of your cash is flowing directly to the industries that are fueling the climate crisis.
One 2017 report showed that over 70 percent of global emissions can be traced back to just 100 companies—all in the oil and gas industry—contributing significantly to climate change. Banks are no stranger to the criticisms of funding fossil fuels, especially during a time when climate scientists are urging the world to transition to renewable energy ASAP. And according to the latest Banking On Climate Change report researched by leading environmental organizations, many banks have even increased their cash flow to companies expanding fossil fuel projects after the signing of the Paris Climate Accord. A new report estimates that since 2016, global banks have collectively invested a whopping $1.9 trillion in fossil fuels.
It’s our responsibility to realize that where we keep our money plays a huge part in the health of our planet and our planet’s future.
So what now?
Here's what you can do: Even if it sounds so beyond our control, we can help prevent further damage—not to mention ensure that we're not gaining personally from industries harming nature. Redirecting investments toward the transition to renewable energy and sustainable projects won't happen overnight, but in the past year, our shifting values on topics like climate change and human rights have already had an impact on the way some banks do business.
If you're ready to make a major move, consider switching to an ethical financial institution (not to be confused with "green" banks, which simply donate to charity) that's concerned with the social and environmental effects of its investments and loans, or generally where and how you're managing your money. Aspiration, for instance, is a financial firm that offers socially conscious and sustainable banking services.
Their Spend & Save cash management account—which works similarly to a standard checking account for comparison—includes the kind of Earth-friendly perks that make banking actually feel good, like a debit card that gives you unlimited cash back rewards on every purchase, with extra rewards for shopping at socially conscious companies, no ATM fees (!), and, yes, the assurance that deposits are "fossil-fuel free" and won't ever fund oil pipelines and drilling.
Resources like fossilfreefunds.org let you see if your savings are currently invested in fossil fuels. And you can get in touch with your own bank to help show that there's a demand for sustainable alternatives. Ask for accurate info on where your money goes: Do they have options for green accounts that support sustainable, renewable energy? If not, ask whether it's possible to ensure your money is at least taken out of supporting coal, oil and gas.
TL;DR? The power to invest in a better future is in our hands.
Whether or not the global financial institutions are ready to become part of the climate change solution, it's our responsibility to realize that where we keep our money plays a huge part in the health of our planet and our planet's future.
Thankfully, like-minded financial companies like Aspiration are emerging, choosing sustainable investments instead of supporting fossil fuel companies, and providing opportunities for us to do what's right when it comes to the environment.
Ultimately, the best thing we can do is to start asking the tough questions. Educate yourself so you know where your money is being invested, what industries your investments support, and whether they line up with your values. And keep the conversation going with your friends and family because we can enact change together. They don't call it the almighty dollar for nothing.