Banks provide safety and even interest on funds, providing their clients convenience, security, and the ability to plan for the future. In exchange, they can invest the money they hold and use some of those profits to pay their staff and give interest to their clients.

Where these banks choose to invest their money is extremely important because the companies they loan money to are given a means to expand and grow, fostering new ideas and big projects. Unfortunately, many major banks invest their money in fossil fuel companies, which encourages their grip on the energy sector even after the 2016 Paris Agreement’s mission to keep global temperatures within a 1.5 °C increase. In the eight years since the agreement, $6.9 trillion has been invested in the fossil fuel industry by the top 60 banks globally. The leading offenders and their investments from 2016 to 2023 are Bank of America with $333 billion, Citigroup with $396 billion, and JP Morgan Chase with $431 billion. 

Instead of rolling back on fossil fuel expansion plans to make way for cleaner alternatives for the sake of the environment, with ample funding from banks, the fossil fuel industry is being given the power to catalyze even more projects that release GHGs and suppress the growth of the clean energy sector. This funding could be given to renewable, nuclear, or even superhot rock energy, which is desperate for significant investments because it is so early in the development stage, but instead, it is fed to greedy corporations that care more about immediate profits than the lives of future generations it puts at stake. 

Every individual that uses these banks allows their money to support the fossil fuel industry, because even though they aren’t sending their money directly, their decisions are funding the fossil fuel sector. What happens with someone’s money is up to them, so they should do the research to see where the money is really going.

I urge you to visit the report and see where your bank falls on the list, which you can do easily here: https://www.bankingonclimatechaos.org/?bank=JPMorgan%20Chase#fulldata-panel.

Personally, I use a local credit union. You can review the investments your credit union makes by visiting the following website: https://mapping.ncua.gov/ResearchCreditUnion. Credit unions, unlike banks, are nonprofits run by their members, so their investments are determined by the people that make up the credit union, instead of bankers making the most profitable decisions. Credit unions often spend their investments on the community that they serve, although of course that varies across organizations.

If you currently use a typical bank, I would strongly recommend switching to a credit union, if not for the investments they make, then the financial incentive. They often offer benefits that outperform typical banks, and it’s a wonder to me why they are less popular. My credit union offers better rates in savings and interest than my connections using banks, though I’ll admit that this isn’t an entirely frequent conversation for me. If your money is just going to sit there and get used by random people, wouldn’t you rather it go towards community projects than funding the fossil fuel industry? Switching your bank is way easier than not eating beef or avoiding plastic!

Hope you enjoyed this week’s article, and stay tuned to learn with me!

Click to access BOCC_2024_vF2.pdf

Click to access BOCC_2024_vF2.pdf