What Makes A Bank Sustainable?
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When we think about our carbon footprints, we often think about the obvious contributors to carbon emissions like flights, cars, and food.
But your financial decisions can also have a significant impact on the environment. Banks use your deposits as investments, and many of them invest in fossil fuels.
How are banks bankrolling the causing climate crisis?
Banks invest billions of dollars in fossil fuel projects and companies.
The 14th annual Banking on Climate Chaos report shows that U.S. and Canadian banks (led by the Royal Bank of Canada) provided $669 billion in financing to fossil fuel companies in 2022. Fossil fuel companies made $4 trillion in profits in 2022, while continuing to fuel the climate crisis.
In its last report published in March 2023, the IPCC made it clear that to avoid unacceptable harm to millions of people, we must stop fossil fuel expansion and drastically reduce our use of fossil fuels across all sectors.
These alarming figures show that we must also pay attention to the banks we do business with and demand that they divest from fossil fuels.
If you find your bank on the dirty list, you can divest your money from fossil fuels by switching to sustainable banks.
What are sustainable banks?
Sustainable banks prioritize sustainability and environmental action through policies and initiatives. They focus on sustainable finance by partnering with organizations combating the climate crisis.
Some banks are signaling their commitment to sustainability by getting Fossil Free Certified and signing a pledge not to finance new fossil fuel companies or projects.
French bank Helios is practicing sustainability by not supporting companies related to coal, oil, gas, chemical pesticides, or deforestation. They undergo annual audits and they’re transparent about their investments, methodology, and impact. The bank provides capital for the development of innovative companies, such as Carbios, which enables the infinite reuse of plastics. Since 2021, Helios has avoided nearly 65,000 tons of CO2e emissions by investing in ecological transition projects.
U.S.-based Atmos Financial is another example of a sustainable bank. It is a Fossil Free certified financial institution that has pledged not to invest in environmentally harmful projects like fossil fuel projects and fast fashion companies.
The bank offers high-yielding savings accounts that fund utility-scale and residential solar projects, making it one of the most sustainable banks.
By putting our money in sustainable banks, we can collectively divest from fossil fuels and support a clean energy future.
Download the Commons app to find out how much you can lower your carbon footprint by taking the Green Your Bank climate action.
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