Mercedes Mullins
Many banks invest in fossil fuels, which contribute to 44% of the world's carbon dioxide emissions. The top banks funding fossil fuels include Barclays, Santander, HSBC, JP Morgan Chase, Wells Fargo, Citi, Bank of America, and Goldman Sachs. However, there are alternative banks that do not invest in fossil fuels, such as Atmos, Clean Energy Credit Union, and Bank Australia. These banks are committed to advancing positive change in the banking sector and supporting green initiatives. They offer various financial products and services while prioritizing sustainability and transparency in their investment choices.
| Characteristics | Values |
|---|---|
| Eco-friendly banks | Avoid funding fossil fuels and invest in green causes |
| Fossil Fuel-Free Certified Institutions | Atmos Financial, Clean Energy Credit Union |
| Websites | Market Forces, EthicalNet, Bank.Green |
| Bank Accounts | High-yield accounts |
| Bank Services | Mobile deposits, business loans |
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What You'll Learn
The top funders of fossil fuels
Since the Paris Agreement was adopted in 2016, the world's 60 largest private banks have financed fossil fuels with $6.9 trillion. In 2023 alone, banks financed $705 billion in fossil fuel financing, with $347 billion going towards fossil fuel expansion. The top funders of fossil fuels include:
JP Morgan Chase
JP Morgan Chase is the world's top fossil fuel financier, committing $40.8 billion to fossil fuel companies in 2023. They are also the biggest funders of fossil fuel expansion and have financed fracking with $6 billion.
Mizuho
Mizuho is the second-largest funder of fossil fuels, committing $37 billion to fossil fuel financing and $18.8 billion to fossil fuel expansion. They are also one of the worst funders of tar sands extraction.
Citibank
Citibank is the worst funder of fossil fuel expansion since the Paris Agreement, providing $204 billion since 2016 to companies building pipelines, oil rigs, and gas terminals. They are also one of the top 5 fossil financiers overall since 2016.
Bank of America
Bank of America is the third-worst funder of fossil fuels in 2023. They dropped their exclusions on Arctic drilling, thermal coal, and coal-fired power plants, and they have not committed to disclosing their energy financing ratio or adopting near-term absolute emission targets. They are also the top financier of Amazon oil and gas companies.
Citi
Citi is the world's biggest funder of liquefied natural gas (LNG), providing $55 billion to the top liquefied gas companies since 2016. They are also the second-largest Arctic oil and gas funder, providing $246 million in 2023.
Other Notable Funders
Other notable funders of fossil fuels include Wells Fargo, Goldman Sachs, Morgan Stanley, UniCredit, and Mitsubishi UFJ Financial Group (MUFG). These banks have provided financing for various climate-damaging practices, including LNG expansion, Arctic drilling, and ultra-deepwater offshore drilling.
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Eco-friendly alternatives
As an individual, one of the most powerful ways to push for a change is to switch to an ethical bank that doesn't invest in fossil fuels. There are several banks and financial institutions that are eco-friendly and have pledged not to invest in fossil fuels. These include:
- Atmos Financial: Atmos is an eco-friendly online banking platform that has pledged to finance zero fossil fuel companies and projects. It is Fossil Free certified and offers a Climate-Positive Savings Account with no minimum balance requirements or monthly maintenance fees.
- Clean Energy Credit Union: This credit union is also Fossil Free certified and has pledged not to invest in fossil fuel projects. It offers a variety of loans that can be used for green energy projects, such as clean energy vehicle loans, green home improvement loans, and electric bike loans.
- Spring Bank: Spring Bank offers a high-interest savings account with low minimum opening deposits and monthly service fees. While it is a local bank with branches in New York City, anyone can open an account online.
- Bank Australia: Bank Australia is a customer-owned bank, with profits going towards causes that customers care about.
- Global Alliance for Banking Values: This is a network of banking leaders from around the world committed to advancing positive change in the banking sector.
In addition to these specific banks and institutions, there are also many community banks and credit unions that do not finance fossil fuels. These smaller, grassroots financial institutions are often greener options than the large chains that drive the financing of the fossil fuel industry.
When choosing an eco-friendly alternative, it is important to look for banks that are transparent about their sustainability efforts and the impact of their lending and investment choices on the environment. Certifications, such as Fossil Free certification, can also help identify banks that are committed to environmental sustainability.
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Community banks and credit unions
Some community banks and credit unions that do not finance fossil fuels include Virginia Community Capital, City First Bank, and Verity Credit Union. Verity Credit Union, for example, is a member of the Global Alliance for Banking Values (GABV), which means it is committed to advancing positive change in the banking sector.
In the United Kingdom, Nationwide Building Society does not invest in fossil fuels. Amalgamated Bank, Atmos Financial, Beneficial State Bank, Clean Energy Credit Union, Climate First Bank, Self-Help Credit Union, and Virginia Community Capital are some other examples of banks that have received Fossil Free Certification, meaning they will not lend to fossil fuel companies or projects.
If you are looking for a community bank or credit union that aligns with your values, you can use online resources to find a list of eco-friendly options near you. It is also important to confirm directly with the bank that they meet any impact criteria that are important to you.
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Divesting from unethical banks
Understanding the Issue
Firstly, it's important to recognize that your money in a bank doesn't just sit idle. Banks use your deposits to make loans and investments, and these can include funding fossil fuel companies and projects. The latest data shows that major banks are still investing heavily in fossil fuels, with Barclays, Santander, HSBC, and others investing billions in fossil fuel businesses.
Find Ethical Alternatives
You have the power to choose where your money goes. Start by researching ethical banks in your region. Websites like Market Forces (for Australia) and Bank.Green provide information on banks that avoid fossil fuels. There are also eco-friendly banking platforms like Atmos, which has pledged to finance zero fossil fuel companies.
Switch Your Money
Once you've found a suitable ethical bank, it's time to switch. You can do this by opening an account with the new bank and transferring your funds. If you have a pension, consider switching to an ethical fund, as pensions are often invested in fossil fuels. Remember to tell your current bank why you're leaving, as this can add to the pressure for change.
Monitor Your Impact
Even after switching, stay vigilant. Monitor your new bank's activities and investments over time. Check their annual impact reports and reach out for more information if needed. This ensures they remain accountable and aligned with your values.
Spread the Word
Encourage your friends and family to join you in divesting from unethical banks. The more people who take action, the louder the message becomes. You can also join campaigns, like the Campaign against Climate Change, to further pressure banks to defund fossil fuels.
Remember, by divesting from unethical banks, you're sending a clear message to large corporations and banks that you will not support their investment in fossil fuels. This collective action is a critical step toward a greener and more sustainable future.
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The impact of pension funds
As major shareholders, pension funds are theoretically well-positioned to contribute to phasing out fossil fuels. They can potentially influence the corporate strategy adopted by the fossil fuel companies they invest in, although this influence is generally limited to publicly listed companies. As national and international policies fall short of phasing out fossil fuels, pension funds are seen as a potential source of more ambitious climate action.
Pension funds have been identified as major asset owners and large shareholders in fossil fuel companies, and their role in climate change mitigation has gained recognition. However, there has been little examination of their historical record on climate change and the evolution of their climate strategies. Divestment, or selling off fossil fuel assets, is a strategy that has been employed by pension funds, but its impact on limiting fossil fuel supply is unclear. While selling off assets may only indirectly affect the targeted companies, other strategies within the divestment movement have had more tangible effects. For instance, lobbying efforts have successfully limited financing or insurance for specific fossil fuel projects.
The New York City Comptroller Brad Lander and trustees of various New York City pension funds have taken action to hold banks accountable for their transition away from fossil fuel financing. They have filed shareholder proposals requiring banks to report their ratios of clean energy to fossil fuel finance to ensure alignment with net-zero commitments. This transparency is crucial for investors to assess the banks' progress toward their climate goals and manage the risks associated with the global energy transition.
Pension funds, as institutional investors, play a significant role in the transition to a low-carbon economy. They can exert influence through their investments and engage with financial institutions to promote more ambitious climate action. As a result, they are seen as a "second-best" source of climate action when international agreements and policies fall short.
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Frequently asked questions
Fossil fuels account for 44% of the world's carbon dioxide emissions, and banks have been known to hide their investments in the industry. By choosing a bank that doesn't invest in fossil fuels, you can do your part in reducing emissions and saving the planet.
You can use websites like Market Forces (if you're in Australia) or Bank.Green to see how much your bank invests in fossil fuels. You can also refer to reports like the one by GoFossilFree.org, which asked banks directly about their relation to fossil fuels.
Some banks that have pledged not to invest in fossil fuels include Atmos, Clean Energy Credit Union, and Bank Australia. There are also many community banks and credit unions that don't finance fossil fuels. You can use guides and lists, such as the one provided by 1 Million Women, to find ethical banks in your region.
You can start by telling your bank to stop funding fossil fuels and switch to a more ethical bank. If you have a pension fund, consider switching to an ethical fund that doesn't invest in fossil fuel companies. You can also monitor your bank's activities and investments to ensure they align with your values.
