By Henah Velez
In last year’s Banking on Climate Chaos Fossil Fuel Finance Report, 60 of the world’s major banks—ones most of us have accounts with—were found to have contributed $3.8 trillion to fossil fuel companies over a five-year span, starting from when the Paris Agreement on climate change was adopted in 2015.
JPMorgan Chase, Citi, Wells Fargo, and Bank of America, among many others, were continuing to finance coal mining, fracking, and fossil fuel initiatives harmful to our planet. And they’re still able to do this today, because of our money.
Green banks are an alternative solution, prioritizing finance and sustainability. These institutions invest in clean energy, climate action, and eco-conscious projects, ensuring your money is sustainable for both you and the planet. Here’s how it works and how you can get involved.
Why Green Banking > Climate-Threatening Banking
Banks hold a substantial amount of power within a capitalist society. Our current economies can’t survive without banking institutions, which means everyone from local mom-and-pop shops to global corporations depends on them for financing. This includes savings, lending, debt, and equity.
Fossil fuel companies like Chevron, Exxon, BP, and Shell—also known as some of the worst polluters of greenhouse gas emissions—turn to banks for funding, leveraging a mix of loans, profits, or equity.
When banks make that money available to them, they often use our collective savings, checking, IRAs, and 401Ks as the investment, hoping for a high ROI. While some banks restrict financing for supporting coal, gas, or oil, not all do—and most haven’t phased out fossil fuels altogether yet.
With our money in hand, these companies go on to frack in Argentina, expand pipelines in Uganda, and build coal plants in Bangladesh, just to name a few. Eventually, they repay any loans or equity, and the bank turns a profit.
But the ROI from these projects also comes with climate-threatening side effects, from a heightened risk of natural disasters to increased emissions and smog. Our money enables these companies, so long as our banks agree to continue to finance them. And the climate consequences affect everyone while disproportionately affecting Black, Indigenous, and marginalized communities.
That’s why it’s imperative to consider green banking, which is more than paper-free statements or online access to accounts. In contrast to mainstream banks, green banks support clean energy and environmental projects fighting against climate change, instead of actively contributing to it.
Plus, many green banks go the extra mile to invest in local community development initiatives, provide carbon-offsetting or green-energy loan options, and even earn certified B Corp status, which focuses on people, profit, and planet.
For example, Amalgamated Bank, a certified B Corp, maintains a fossil fuel-free portfolio for simple and socially responsible investing. Every mutual fund and ETF the bank invests in helps make a positive impact with regards to renewable energy, efficient water use and recycling, sustainable agriculture, and more.
While the model of green banks varies from the mainstream, rest assured that the service usually remains the same. While not every bank will have regional offices, they’re just as accessible. Many even tout stronger personal ties with customers thanks to the one-on-one relationships and smaller client base, like a local credit union. And most banks and firms are registered with the government and protected by the FDIC, so your money stays in good hands.
Put simply: Green banks can use our money for a better world—which is especially important when we’re in the midst of a climate emergency.
For More Visit https://www.thegoodtrade.com/features/green-banking-definition/