Your Money Goes to Your Bank to Fund Global Warming, So You Could Actually Change Banks
It's remarkably easy to do.
Over at Yale Climate Connections, Pearl Marvell reflected on the connection among banks, customers, and environment. You pay your bank for your mortgage, for example, or the interest on your credit card, or you deposit your paycheck and use the bank’s debit card to buy groceries and gasoline. The bank uses your money to finance loans and investments, including fossil fuel investments. According to the Sierra Club report Banking on Climate Chaos, the world’s 60 biggest banks, including Bank of America, JPMorgan Chase, and Wells Fargo, conveyed $150 billion in 2022 into the top 100 companies expanding fossil fuels, including TC Energy, TotalEnergies, Venture Global, ConocoPhillips, and Saudi Aramco. And since the 2015 Paris climate accord, those 60 banks invested $5.5 trillion of our money in fossil fuels.
Not wanting to participate in further fossil fuel funding, Ms. Marvell wrote about her quest for climate-friendly banks.
She found an outfit named bank.green that lists the best green banks, as defined by the Fossil Free Alliance. Their criteria are stated as “These banks and credit unions have all gone on record to state that going forward, they will play no part in the provision of loans, underwriting or investments to aid the expansion of fossil fuel extraction, production or infrastructure – and in the majority of cases, they never have.”
Another organization, Bank For Good , has a tool that lets you select your fossil-fuel-free bank by the kind of account you want, your state, and the extent to which a physical location nearby is important to you.
Using Bank For Good’s web tool, I came upon Beneficial State Bank, a B corporation*, which provides a tool showing you the breakdown of how it uses your deposit. According to the Deposit Calculator, a $100 deposit can be used to loan $24.85 to affordable housing, $7.39 to environmental sustainability, $21.09 to fair auto loans, and so on. Other information on the Bank For Good site lets you select green credit cards, for example.
This may all sound trivial. But we know that the world can’t afford any fossil fuel expansion. This means no new oil and gas fields, no new coal mines, no new or expanded oil and gas pipelines, no new LNG terminals, no new coal-fired power plants. Once an oil, gas, or coal resource is developed, or a piece of fossil infrastructure is built, there is a very strong incentive to fully extract it or run it to the end of its economic life. This philosophy is killing us, like rats who befoul their own nest because they can’t escape the cage in which they’re housed. So trivial or otherwise, green banking seems to be a good door to open.
*What is a B corp?
“B corps are for-profit companies that have received certification from B Lab, a nonprofit organization that certifies businesses that meet certain social and environmental standards. According to B Lab, there are 6,856 certified B corporations in 161 industries and 90 countries worldwide as of late May 2023.” — Investopedia
I joined my first credit union in 1980 when I was a graduate student. I am now a member of three credit unions. My retirement savings is in a credit union that mainly grants mortgages to local homeowners. I have only had $1 dollar in service fees over the last 43+ years and I could have voided that fee for a cashiers check if I had had it written to me and then endorsed it to the party I wanted to pay. No monthly service fees. I am earning 5.25% APY on my 12monthCD. Credit unions deposit s are insured, just like banks, except that the two have separate federal insurance systems.