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Saving the planet with your savings account

our review of Project Drawdown’s report on climate-responsible banking

With erratic weather patterns and natural disasters affecting almost everyone these days, climate change is on a lot of our minds. For those of us who want to have a positive impact on our world and community, we may take steps in our daily lives to reduce our personal environment impact, whether that involves reducing our energy usage, eating locally, and driving less. But less obvious is the enormous impact that simply moving your savings can make, which is why we love being able to share this new report from Project Drawdown. They use publically available data about lending to explicitly illustrate the impact of JUST ONE PERSON moving their savings account from a “carbon-intensive bank” to a “climate-responsible” bank.

We want to clarify: this report is by no means definitive- but could be much closer to that if there were better transparency about lending in the banking industry. However, with the available data, there are still plenty of conclusions Project Drawdown’s researchers can draw and real-world consequences that are evident. All cited data below, if not linked, can be found in the report.

The report identifies “global banks” as those with the most significant negative impact, primarily through continued investment in fossil fuels and other carbon-intensive sectors, with only 7% of their financing going to renewable energy. These global banks are any that have the resources to participate in global markets, which we call mega banks on our blog. Additionally, these investments result in what the report calls “financed emissions,” and are 700 times more than what these banks create from their day-to-day operations. To learn more about specific data concerning particular institutions, we recommend downloading and reading the report.

Generally, the bigger the bank and the more you’re saving with them, the more emissions your money is financing. With the 11 biggest banks, “every $1,000 you have in savings is roughly equivalent to the direct emissions generated by flying from New York to Seattle every year.” The report also estimates that about 20-30% of the mega banks’ overall portfolio in 2022 had exposure to carbon intensive sectors. However, they also point out here that transparency in banks’ lending would lead to much more definite conclusions, and encourage such.

The report goes on to estimate the carbon intensity of $1,000 in savings at a climate-intensive bank to be four times that of a “climate-responsible bank.” Although they link Bank for Good as a fantastic resource to finding these environmentally friendly banking options, they also mention that local banks and credit unions are often a better choice. This means that by moving your money from a mega bank to a climate-minded Better Banking Option, you can reduce the emissions your deposits create by 75%.

We’ve written a lot on the blog about the impact that banking can have on our climate, as the biggest banks are the also some of the biggest contributors to the fossil fuel industry. Climate activists have also been aware of this fact for years, putting significant pressure particularly on Chase (one of the worst culprits) to transform their practices. Although there is much more than needs to be done, Chase has changed enough to show us that these tactics can make a difference on both the banking and fossil fuel industries, as the Project Drawdown report also illustrates.

Project Drawdown comes to many of the same conclusions we have in how to bank in a way that reflects our environmental values, and about the changes that must be made in the banking sector overall to ensure that banking customers can make informed decisions about their deposits. We both encourage readers to reach out to their bank to share why they are considering moving their accounts, as actions like this can truly convince all banks and credit unions that the environment matters to their customers. If any of this article has been interesting to you, we truly encourage you to download and review the report, and consider making a difference by moving your deposits.


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