When you put money in the bank, it appears as if it is sitting there and can be withdrawn at any time. In reality, your financial institution makes money by lending money to other places, such as fossil fuel companies that drive climate change and high-emission industries like manufacturing.
So just by leaving money in your bank account, you are unknowingly contributing to worsening catastrophes around the world.according to new analysis, every $1,000 the average American saves indirectly creates emissions equivalent to a flight from New York to Seattle. Jonathan Foley, Executive Director of Project Drawdown, who published the analysis, said: “Banks are not really aware of how the money we keep in our checking accounts is used on a day-to-day basis. “We haven’t really investigated where it actually circulates.” . “But when you look under the hood, you see a lot of fossil fuels.”
Switching to climate-smart banks can reduce these emissions by about 75%, the study found. In fact, if you move a US customer’s median balance of $8,000, his indirect emissions reduction will be double the direct emissions he would avoid if he switched to a vegetarian diet. Masu.
Put another way, you, as an individual, emit a carbon footprint by driving a car, eating meat, or running a gas furnace instead of a heat pump, but your money does. . Also There is a carbon footprint. Banking is therefore an underappreciated but powerful tool for tackling climate change at scale. “It’s not just voting every four years, it’s not just not eating hamburgers, it’s also very important where your money is,” Foley said.
Just as we can borrow money from banks, fossil fuel companies and the companies that support their industries are also looking to build pipelines and other infrastructure. “Even if they’re not building new pipelines, whether they’re maintaining the network of gas stations they own, maintaining existing pipelines, or paying their employees, fossil fuel companies are doing business as usual. “We’re going to need funding to do this,” said Paddy McCurry, senior analyst at Reclaim Finance, an NGO focused on climate action.
Fossil fuel companies’ need for such financing varies from year to year as fuel prices fluctuate.there you, “The money that individuals put in their bank accounts allows banks to lend money to fossil fuel companies,” said Richard Brooks, director of climate finance at Stand Earth, an environmental and climate justice firm. To tell. Support group. “If you look at the top 10 banks in North America, each bank lends between $20 billion and $40 billion to fossil fuel companies every year.”