Sustainable Banking: How to Break Up With Your Bank

Take a stand against banks using your money for ethically, socially, and environmentally destructive practices

written by

Millie Parks

There is little incentive for banks to publish their investment activities, and few are owning up to the part they have played in the current climate crisis. This guide delves into how your money is being used to fund environmentally and socially exploitative practices and how, as a consumer, you can vote with your money for the future you want to see.

Your Money, Your Prerogative

Banking is often seen as a lifeline: permitting us to purchase food when hungry, transport when we need to get somewhere, and even big once-in-a-lifetime purchases like a new home.

Finance and banking are perpetually clouded with bad press (and quite rightly so), but how banks use your money has often been glossed over. From funding arms and drug cartels to contributing to climate change, the big banks found on high streets have a lot to answer for. But, with the almost overnight transition away from physical to digital banking, there are now numerous challenger banks to choose from. Who you trust to keep your money safe should be just as important as what you choose to spend your money on.

An industrial port polluting the environment.
The bank you choose is important, not only financially, but for the potential impact, they can have on the world with your money.

They're Using YOUR Money for What?! - What Makes a Bank Unethical?

Ethical Consumer, a platform designed to help you make ethical choices easily, listed the top banks currently investing in nuclear weapons companies. Out of the 26 listed, Blackrock came out on top with around $60,000 million worth of investments into this industry. Blackrock and Citigroup have also been reported to invest in cluster munitions. These are a group of bombs that spread over an area the size of a football stadium used to kill people indiscriminately. Mainstream banks aren't just funding weapons but also modern slavery and criminal activity. HSBC was fined ÂŁ1.2 billion for involvement in South American drug cartels' money laundering schemes in 2012.

According to the Rainforest Action Network, the top 3 banks globally financing activities contributing to climate change are JP Morgan Chase, Wells Fargo, and Citi. And investments into the fossil fuel industry (think fracking, extraction in the Arctic, and offshore oil & gas) continue to grow. For example, the 2017 Ethical Consumer Report noted that UK banks such as Santander, Barclays, HSBC, and Lloyds invested in companies supporting the fossil fuel industry, notably Colombia's CerrejĂłn coal mine. Since the 1970s, several indigenous communities have been evicted due to the expansion of CerrejĂłn, including the Roche, Chancleta, Tamaquitos, and Manantial communities.

Coal Mining in Indonesia.
How banks use your money is often ignored, and without seeking clarification or knowledge of where your money is going, your bank could be among others investing in environmentally harmful industries like coal mining.

Take action now

Do you want to have a direct impact on climate change? Sir David Attenborough said the best thing we can do is to rewild the planet. So we run reforestation and rewilding programs across the globe to restore wild ecosystems and capture carbon.

Get involved

The money that is in our bank is working. But on what? Conventional banks invest heavily in yesterday's industries like coal or factory farming.

Andreas, Tomorrow One

What Can You Do About It? - Switch to Sustainable Banking!

According to Efma, sustainable banking refers to financial services which integrate environmental, social, and governance (ESG) criteria into the business's decisions. These are the three main factors that are used to measure the sustainability of investments. With customers becoming more socially and environmentally conscious, banks are beginning to integrate ESG practices into their performance measures.

Wherever you are in the world, there is likely a sustainable banking option for you. In Europe, Triodos is the leading sustainable bank. They are B Corp certified, publish the details of every investment on their website, and their core values are fairness, sustainability, and transparency. In the US, Aspiration is at the top of the sustainable bank hierarchy and promises fossil fuel-free investments and other bonuses, like offsetting your carbon emissions from driving.

A Planet for Profit sign held up during a protest.
Banks monopolise the economy and thus everyday life, but they are beginning to realise that a sustainable way of operating could be more profitable in the long run. With consumers becoming more aware of their direct impact on the planet's resources, banks that chose not to transition towards ESG practices are at risk of losing this new wave of sustainable spenders.

If we invest more money into sustainable projects, there is less money left over for bad banks to support destructive industries with.

Inas Nureldin, Co-Founder of Tomorrow One

What to Look for in a Sustainable Bank

If you're looking to switch, you can try to determine if a bank is sustainable by looking for these key things:

  1. Transparency & Reporting - Disclosing where money is spent and invested through detailed annual reports. Such information makes a bank more trustworthy and ensures you can find out if transactions align with ESG criteria.
  2. External Certifications - Organisations like B Corporation and 1% for the Planet ensure businesses uphold social and environmental standards recognised globally.
  3. Leading by Example - Try to find a bank that paves the way and strives to be sustainable and socially responsible across the board. For example, Starling bank pushes for gender equality in finance and uses renewable electricity in their offices.
  4. Sustainable Projects - Look for investment projects which benefit communities, are carbon-neutral, or are climate positive.
A line of wind turbines in the ocean.
Banks investing in sustainable projects like wind power, are good examples of sustainable banks. However, make sure to do your research before choosing, and look for a bank that has all four key points.

Investing Your Money

There are also options for personal investments, such as Impact Investments from Triodos. Or you can try out the numerous sustainable investment platforms now available, such as OpenInvest, EarthFolio, or Wunder Capital.

Business Banking

If you are a small company looking for sustainable options, fear not. This information from Ethical Consumer should help you find an ethical bank for your business.

While mainstream banks continue to aim for seemingly infinite economic growth (at the cost of very finite resources), consumers can unite and divest money from these destructive monopolies. Because mainstream banks use your hard-earned cash to finance companies who engage in socially and environmentally destructive activities, now is the time to vote with your money for the future you want to see.

A credit card being cut in half.
Determine if your bank is engaging in socially and environmentally destructive activities with your money, and if they are, use the ideas listed here to break up with your bank and find a sustainable alternative.

Sources & further reading

Peer Reviewed Research Section
  1. “Sustainable Banking Network” - International Finance Corporation (IFC)External linkIcon Peer Review
  2. “Efma” - EfmaExternal link

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