Put Your Money Where Your Mouth Is

What's Going On?

Despite a lot of clever rhetoric and public pledges to finance renewable energy products or go carbon neutral, major banks continue to play a major role in propping up the fossil fuel industry. Since the signing of the 2015 Paris Agreement, global banks have pumped $1.9 trillion into fossil fuel projects. The Rainforest Action Network released an outstanding report grading banks on their financing of fossil fuels (it's chock full of infographics) — check it out here.

So Which Banks Are The Worst?

Chase Bank leads the pack by a pretty large margin, followed by a series of US banks — Wells Fargo, Citi Bank, and Bank of America. Which is interesting considering that in 2015 these banks (plus Morgan Stanley and Goldman Sachs) released a statement calling for "leadership and cooperation among governments for commitments leading to a strong global climate agreement" and the need to "build a more sustainable, low carbon economy."

Source: Rainforest Action Network

Have They Done Anything Positive?

Sure — the problem is that their environmentally-minded projects are dwarfed by their fossil fuel funding. In 2017, Wells Fargo invested $12 billion in sustainable projects, but spent $54 billion on fossil fuel projects. That same year Chase set a goal of becoming completely reliant on renewable energy by 2020 and pledged $200 billion in clean energy financing through 2025. Which is great, until you realize they've already spent more than that financing the fossil fuel industry since making the announcement.

Well That's Frustrating...

Yep. However, activists in Europe have been making headway pressuring banks to stop funding coal, gas and oil companies. Banks there have responded to the political pressure — the World Bank, PNB Paribas (France), and HSBC (UK) have all stopped financing certain sectors of the fossil fuel industry.

The US is a different story, unfortunately. According to 350.org's Yossi Cadan, "The notion that politicians are not going to act is the current financial assumption. And if you think like that, and you say, okay, politicians are not going to regulate the extraction of fossil fuels…then we may be able to burn everything that we have and make a profit out of it."

Source: Rainforest Action Network

What You Can Do About It

Changing your bank is easy, and has a tremendous impact. If people collectively rejected institutions that financed fossil fuel projects, banks would be falling over themselves to get away from oil and coal companies. And there are plenty of banks that have sprouted up in recent years that support sustainable economic development, renewable energy, and local communities. So how do you figure out where you can ethically put your money?

There are a couple good places to start.

Global Alliance on Banking Values — An independent network of banks that focus on community investments, transparency in business practices, and sustainability. Certified B Corporations — Basically the economic equivalent of fair trade coffee — these companies are held to a range of social and environmental standards in how they run their businesses. Your local credit union — A great way to keep your money in your community — they're not for profit, and collectively owned by members.

For more info, check out NerdWallet's breakdown of socially responsible banks. And let us know if you switch your bank! We love to hear stories about how you're making a difference.