How Banks Impact the Planet and What You Can Do

The author is a Sophomore at Laurel School in Ohio. Laurel School is YEPT’s first-ever Chapter. To inquire about becoming a YEPT Chapter, contact our adult advisor at Jim@earthcharterindiana.org

Whether you think of ergonomic sofas, the gentle ambient music, or the red-and-white peppermints on the receptionist’s desk, you can probably recall a visit to the bank. This is no coincidence – in the United States, these financial institutions are the primary way to manage money. “Nearly 96 percent of all U.S. households were banked in 2023,” stated Julianna Fisher Breitbell in a Federal Deposit Insurance Corporation press release. Using the most recent approximation from the United States Census Bureau, this works out to be over 122 million households or over 310 million people. 

Considering the large portion of our population that holds stakes in our banks and their financial decisions, it is hard to fathom the dirty secret these banks are keeping: they are supporting the destruction the planet. As Fossil Free Funds finds, “Since the Paris Agreement in 2015, the world’s 60 largest banks have provided $6.9 trillion in financial commitments to the fossil fuel industry, with $673 billion in fossil fuel financing in 2023 alone.” 

Although a sum this large can make the problem feel distant and unmanageable, it is closer than it may seem. The money that banks spend comes from our own pockets. Through the mundane task of going to a bank, we are the ones funding climate change. Each deposit we make gives our bank capital to invest in whatever projects they predict to be most profitable, which tend to exploit natural resources and emit greenhouse gases. Project Drawdown quantifies, “Every US$1,000 a person has in savings is roughly equivalent to the direct emissions generated by flying from New York to Seattle every year.” 

To help the planet, we need to put our money where our mouths are. We can do this by placing our cash in green banks. A green bank is a financial institution that promotes and carries out environmentally friendly and equitable initiatives with the money it holds. It avoids investing in ecologically detrimental sectors, like the fossil fuel industry, and instead supports green initiatives like renewable energy. 

Ava Gallo of the National Caucus of Environmental Legislators furthers that “Green banks have mobilized $9 billion in overall green investment over the past 10 years using only $2 billion in public funds.”

Not only do these institutions make the most of the money they’re given to help the environment, but they use their funds to bolster efficiency and keep the funding in local communities. As The Climate Reality Project details, “Green banks can help communities lower energy bills by funding energy efficiency measures and renewable energy generation, saving individual households and businesses money. They can also help to attract new businesses and green investment to a region, bolstering the local economy.” 

Locate your nearest green bank.

The tangible benefits of green banks can be seen across the globe, including in the case of Spring Bank, a community bank located in the Bronx, New York. Spring is well-known in the region for its philanthropic mission. Not only does it refrain from contributing money to the fossil fuel industry, it actively combats the negative impacts of Big Oil and Big Gas. As a certified B Corp, Spring Bank uses its funds to benefit the local community via grants for small businesses, an eco-friendly toolkit, the reduction of its environmental footprint, and more. 

Luckily, the success of green banking is not limited to the state of New York. Green banks can be found across the country. This presents a hopeful prospect, as it gives US citizens the opportunity to invest in sustainability. Even more, the process of banking green is simple. It acts very similarly to a normal bank in that you must open an account. From that account, you can deposit or withdraw money. The only difference is that your money is going to benefit the planet, not harm it.

Switching is crucial, as a survey conducted by Bankrate and reported on by Mary Wisniewski finds that, “The average U.S. adult says they have used the same primary checking account for just more than 14 years.”

Evidently, the first institution that you bank with first isn’t only ground zero, but a decision you will live with well into adulthood. That means now is the time to make a responsible and sustainable decision. The clock is ticking. Don’t wind up on the wrong side of history. Use your finances to secure your future.