Your Money Might Be Working Against the Environment

If you keep your money in a checking account with a major bank in the United States, there’s a good chance you’re inadvertently funding projects that directly negate the efforts you make to mitigate your climate impact. If you’re signed up with a big bank like Chase, Wells Fargo, Citibank, or Bank of America, bad news: your money is working against the environment.

Massive oil and gas companies need to borrow money to build new pipelines or start extracting from new areas. They get that money from institutions, like JPMorgan Chase—the bank I’ve used for the past several years—which reportedly lent $195 billion to the fossil fuel industry over the past three years. And Chase gets that money from people like us, who store our paychecks and savings with the bank in exchange for a paltry few cents of interest each year.

During conversations I had with several leaders from financial institutions and environmental agencies, the same idea kept coming up: we often think of our money as a pile of cash sitting in a bank vault, waiting for us to need it. But in reality, about 90 percent of that money is being lent out at any given time, and it’s “driving the destruction of the planet,” says Andrei Cherny, CEO and co-founder of Aspiration, a new banking option. Banks have invested an average of roughly $2.4 billion per day in fossil fuel companies since the Paris Agreement was signed in 2015, according to the Partnership for Carbon Accounting Financials, a group that assesses greenhouse gas emissions associated with loans and investments. And while some major players have recently promised to slow down such funding or pull out of Arctic drilling, a total environmental ceasefire is a long way off. In May, Chase shareholders narrowly defeated a resolution to force the company to be more transparent about its fossil fuel investments and outline plans to reduce its impact in line with the Paris Agreement.

“There are a lot of people out there who are recycling their aluminum cans and drinking out of metal straws and making all kinds of differences in their lives, and yet thinking nothing about buying that drink with a Wells Fargo debit card,” Cherny says. “Their money sitting in a big bank is actually having a much bigger negative impact than all the other positive impacts they’re making.”

Why You Should Switch Banks

“I had a lightbulb moment myself thinking, wait a second, I recycle, I work for an environmental nonprofit, I do all these things,” says Kate Williams, CEO of 1% for the Planet. “But in a way, is the biggest way that I can drive impact through what’s happening with the dollars I have in my bank account or retirement account?” The organization itself, which is based in Burlington, Vermont, now banks with a local credit union, VSECU, which Williams says is a positive community force. It sponsors a community co-working space, runs an investment platform to support local businesses, and offers a solar loan program, among other initiatives.

Williams says 1% for the Planet has seen a recent uptick in new members from the financial sector, including investment firms and financial planners, which is a good sign that tides could be changing. “There is this growing awareness that what I do with my dollars, from investing to how I set up my retirement accounts, all of that makes a big difference and is a big driver of change,” she says.

It can certainly be a hassle to switch banks, but moving your money not only pulls your own dollars out of fossil fuels, but also sends a message to the big banks that you’re not willing to let them profit off extracting from the planet.

Greener Banks

John Oppermann, executive director of the environmental awareness nonprofit Earth Day Initiative, recommends starting your search with local credit unions, which typically have better sustainability records and are more focused on your community. But there are also some bigger options with solid records.

Bank of the West

On July 20, Bank of the West launched a 1% for the Planet checking account. One percent of the revenue the bank makes from every such account will be donated to environmental causes at no cost to the account holder. Based on internal calculations, Bank of the West estimates this will amount to $150,000 to $200,000 from the first year of the program and has selected Protect Our Winters to be the first beneficiary. Account holders can keep an eye on their own footprint as well, thanks to a tool that estimates the carbon output of every purchase. Bank of the West has documented sustainability policies that rule how it lends your money: it won’t fund Arctic drilling; irresponsible palm oil production; coal-fired plants that aren’t working to transition; fracking, shale, and tar sands mining; tobacco; or unsustainable wood pulp production. It has committed to divest from thermal coal by 2040, and hasn’t funded new coal projects since 2017. “Energy is big business, so some of the largest American banks are some of the largest fossil fuel financers in the world,” says Ben Stuart, chief marketing officer at Bank of the West. Walking away from that money is a “bold choice,” he says, but an important one.

Amalgamated Bank

Amalgamated Bank is a B Corp and a member of the Global Alliance for Banking on Values, which is committed to making the banking industry more socially and environmentally sustainable. Aside from promising to refrain from funding fossil fuel companies and instead investing heavily in clean energy, Amalgamated has a long list of credentials holding it accountable to its promises. It’s one of just a few U.S. banks that have signed the United Nations’ Principles for Responsible Banking, a commitment to evaluate its impact on people and the planet, set targets for improvement, and publicly report on their progress. Amalgamated also signed the Divest-Invest Pledge, which promises to make no new loans to the top 200 fossil fuel companies, exit any existing investments within five years, and contribute to climate solutions. And it led the charge to bring North American banks on board with the Partnership for Carbon Accounting Financials, a global effort for transparency in the financial sector. Morgan Stanley and Bank of America have since joined the cause.

Aspiration

A certified B Corp and 1% for the Planet member, online-only Aspiration launched in 2015 with a mission that includes a promise to keep deposits fossil fuel-free. Co-founder Cherny worked under Vice President Al Gore during the Clinton administration, including on climate change issues, and has also spent time consulting for big banks. He says he’s seen firsthand that they’re making “way too much money on things that are destroying the planet” to have any incentive to change of their own accord. One of Aspiration’s most unique features is a tool called Aspiration Impact Measurement, which analyzes hundreds of thousands of data points to create scores for companies based on their sustainability records and their reputations for how they treat their employees. Customers can use this tool to decide on the fly, say, whether they want to shop at CVS or Walgreens. You can also opt in to programs that will automatically deduct money from your checking account to plant a tree every time you make a purchase or to automatically buy carbon offsets on your behalf, calculated from an estimate for how much you drive based on the gas you purchase with your debit card.

Don’t Leave Your Bank Quietly

If you decide to switch banks—I’m planning to!—don’t go in silence. Earth Day Initiative’s Oppermann says you should be a “climate communicator” and tell the bank you’re leaving because you disagree with its climate policies. Likewise, if you move to a bank or local credit union with policies against supporting fossil fuel companies, express when you join that you chose it because of that.

“There’s a widespread belief in a lot of industries that people aren’t actually motivated to change their behavior or who they shop with based on climate change,” Oppermann says. “But if you start providing that feedback, that can get passed up the channel, so there’s more and more pressure for those organizations to actually change their behavior and divest from fossil fuels.”

Don’t call it quits after you switch banks, either. Oppermann has been involved in an effort to get Harvard, where he attended law school, to transition away from investments in fossil fuels, and it’s not the only institution with such investments. In addition to moving your own money, Oppermann encourages speaking up to all organizations where you have a voice. You can ask your own university where it invests its endowment, if it has one, or you could ask your church or a nonprofit you volunteer for where it does its banking.

“This works across the spectrum,” Stuart says. “If you think about how organic yogurt got into Walmart, it’s because consumers came and said, ‘Do you have organic yogurt?’ Consumers pushed it. We want people to do the same thing with their banks.”

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