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Finance

This article is designed to inform you of essential facts, prompt you to reassess certain behaviours and empower you to be part of the solution.

Is your money funding climate change?

Any consumption of goods or services has some form of carbon footprint, and your money is no different. Money in your bank account could be funding activities that are accelerating the climate and ecological crisis and putting you and your family at risk. It doesn’t matter if you drive an electric car or have a green energy tariff if your money, pension or investments are directly funding the destruction of the planet.

Since the Paris Agreement was adopted in 2016, over 35 global banks have financed fossil fuel projects to the tune of at least £2 trillion. The perpetrators ranked below are high street names and likely to be the banks that you’ve been with for many years.

This is how much these global banks have funded the fossil fuel industry by since the Paris Agreement was signed

Put simply, if you bank with one of these companies or their subsidiaries, your money is supporting catastrophic climate change right here, right now.

Finance often seems scary and complex. But for the average member of the public, it is quick, easy and extremely secure to move your money away from the banks that refuse to act on climate change.

Here’s how you can help.

Every day banking

The money you put into your bank account can be used for other activities by your bank, often without your knowledge or consent. This includes oil and gas extraction, Arctic and rainforest exploration, fracking, the expulsion of indigenous peoples, coal mining and the destruction of our natural world in general.

Even banks that separate their public and commercial services are able to capitalise on large numbers of customers, fee paying or not, depositing money into their systems.

Try this: call your bank today and ask, “can you tell me if you or any of your subsidiaries provide any services or finances to fossil fuel companies or other such activities that are harmful to the environment?”

Even if your bank says it has a plan to decarbonise by 2050, is that a reason for staying with them? They could be funding the climate and ecological emergency for 30 years yet. There are plenty of existing banks that don’t destroy the planet on a daily basis.

TAKE ACTION
Don’t feel beholden or trapped by your existing bank. If you want to switch bank accounts, it is easy. Nearly all banks will switch your account (including all your transactions, direct debits, standing orders and overdrafts) instantly and easily. You probably don’t even need to contact your bank.
The Good Shopping Guide uses a comprehensive assessment process to give banks an ethical index score, which are compared and regularly updated. The Ethical Consumer also provides a detailed assessment on various banks beyond environmental issues as well.
Remember, when you find a bank you like and trust, recommend them to your family and friends. Why wouldn’t you want your loved ones to get a good deal and be part of the solution alongside you.

Pensions

Pension funds are some of the largest financial deposits in the world. They will invest in long term projects with healthy returns. Fossil fuel industries have been a traditional preference for pension funds due to their past stability and growth. But that growth is ending. As fossil fuel industries decline, so do the value of their assets and likelihood of good returns.

The world has already likely reached peak oil. The fossil fuel industry is on the way out one way or another. If your pension fund has years (or decades) left to mature, why would you want it invested in a dying industry? Like your bank, call your pension manager and simply ask if they invest either directly or indirectly in fossil fuels. As a customer, you have a right to know and if they don’t tell you, then you have your answer.

TAKE ACTION
Don’t wait until you’re at pension age to make the switch. It makes financial – and moral – sense to switch away from the fossil fuel industry as soon as possible.
Pension funds and their investment portfolios are constantly changing so we can’t give accurate recommendations. But it doesn’t take long to find out where your money is. Again, the Ethical Consumer has a detailed guide on UK specific pension funds.

Investments

Investments come in many forms and you won’t always know if your money is being used to accelerate the deepest impacts of the climate and ecological emergency. A portfolio of stocks and shares may be easier to track, but it’s not always transparent.

However, if you’re willing to give your money to an organisation or company, then wouldn’t you want to know exactly where that money is going? Knowing you’re not part of the climate catastrophe is sound financial management.

Like banks and pension funds, you can just ask where your money is being invested. If it’s not to the detriment of the climate then your investment group will be keen to tell you.

Some other points on finance to consider

TAKE ACTION
Don’t wait. Your money could be being used right now to fuel catastrophic climate change that threatens us all. Switching takes minutes and the banks will often do it for you. There is no need to delay.
Don’t be fooled by loyalty. The banks listed below are directly implicated in the climate crisis and are accelerating the devastation. You may have banked with them for many years, but their priority is paying their shareholders, bosses and premium customers. You don’t owe them anything.
If you don’t go into bank branches, why not go for a purely online bank? These companies tend to have lower carbon footprints simply through the lack of branches and by being mostly paperless.
Banks with strong environmental policies tend to have strong social and human rights policies too. If they don’t fund fossil fuels, they probably don’t fund arms dealers or companies/states with civil rights violations.
Tell people! When you find a bank that is right for you and is part of the solution, tell your friends and family so they can join you on the right side of history.

Banks that invest in fossil fuels and are knowingly accelerating the climate emergency:

JPMorgan ChaseWells FargoCiti
MUFGGoldman SachsBank of America
BarclaysBank of ChinaRBC
TDBank of MontrealSoceiti Generale
MizuhoCredit SuisseChina Construction Bank
ScotiabankICBCCredit Agricole
Morgan StanleyDeutsche BankING
Agriculture Bank of ChinaSMBC GroupHSBC
BNP ParibasCIBCUBS
BPCE/NatixisStandard CharteredBBVA
SantanderUniCreditIntesa Sanpaolo
RBSCommerzbankFirst Direct
M&S BankHalifaxBank of Scotland
NatwestUlster Bank

This is not a complete list and you should ask your bank if they are not listed here.

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