Green up your banking

Katherine Markova

Moving your money to a greener bank is one of the most impactful and least disruptive strategies we have to help reverse the climate crisis. 

The Problem: for every $100 deposited with any of the Big 4 banks (Wells Fargo, Bank of America, Chase, and Citigroup), $24 ends up funding fossil fuel infrastructure. Only the biggest banks have sufficient funds to lend to these large projects. You can check how dirty your bank is here.

If you deposit your money with a “green” bank, the greenhouse gas emissions associated with your funds, and your personal carbon footprint, will be much lower. There are two types of green banks: 

  1. Those that do not lend to the fossil fuel sector
  2. Those that affirmatively, and sometimes exclusively, lend to certain environmentally-beneficial projects, such as community solar

The chart shows the carbon footprint of an average American, $10,000 sitting on deposit with a Big 4 bank and $10,000 lent by a green bank to utility-scale solar. 

A Solution: Keeping as little as $20,000 in a green bank over the course of the year can eradicate an average American’s entire annual carbon footprint; this article provides a good explanation of how the impact is quantified for one bank and the assumptions the calculation is based on.  

Sounds too good to be true? A little… One person taking this action will not stop the construction of a new pipeline but 1 million of us doing this together may achieve that outcome. 

Here are some practical steps I recommend you take.  

  1. Use NerdWallet and bank.green to check out available options. Note: A neo-bank is not actually a bank, it does not hold a banking license; instead your FDIC-insured bank account will be with its partner (typically community) bank. Do your due diligence on both companies.
  2. If you have several bank accounts and many direct pays, open a savings account first and transition over time.

September 2023

Green up your banking