Banking & Finance
Align investments to activities that regenerate our relationship with energy, infrastructure, forests, farms, grasslands, biodiversity, rivers, oceans, human rights, and social justice.
In the five years following the Paris Agreement, the world’s sixty biggest banks have invested $3.8 trillion in fossil fuels, with the largest financier being the Royal Bank of Canada. G20 countries have provided more than $3.3 trillion in subsidies for fossil fuels since the Paris climate agreement. We are entrenched in the existing financial system as customers, pensioners, business owners, and governments. Our banking system is actively aiding in the destruction of our shared home. By investing in alignment with regenerative principles, we have an opportunity to put life back at the center of our imagination of “wealth.”
Action Items
Individuals
Find out if the institutions you are affiliated with invest in or loan to fossil fuels companies or companies that support drilling, mining, exploration, and extraction. If yes, ask them to divest. Whether a university, foundation, pension fund, local authority, faith-based organization, or company, there are ways to divest from fossil fuels. Join or organize a divestment campaign. Explore 350.org, Fossil Free, and Stop the Money Pipeline for details.
Write to your bank to consider joining the Partnership for Carbon Accounting Financials. This is a group of over one hundred financial institutions that collectively manage more than $21 trillion. They are committed to counting the greenhouse gas emissions underwritten by the financial industry. Many banks do not make emission information publicly available, but metrics can help hold companies accountable. Beyond that, ask your bank to invest in renewables, which offer better returns and help move us away from fossil fuels.
Switch to a bank that doesn’t invest in fossil fuel extraction and infrastructure. Each time you make a purchase using a credit card from a polluting bank, you are pulling out a card that is destroying our future. The Global Alliance for Banking on Values, a network of banks committed to “advancing positive change in the banking sector,” is one place to start aligning your money and your values. Several online banks and financial technology companies also prioritize the planet. Climate First Bank is a full-service, carbon-neutral community bank offering personal and commercial banking services. Aspiration is a bank that doesn’t fund fossil fuel projects, rounds purchases to the nearest dollar to fund new trees, and provides carbon offsets for gas purchases. EarthFolio, an automated investing service, only invests in companies that meet their appropriate environmental, social, and governance practices criteria. Explore other options as well!
Switch to an ethical pension fund. Most people need to learn more about where their pension funds are invested and, by default, are partially investing in fossil fuels. According to ShareAction’s research, less than 1 percent of assets in the world’s hundred largest pension funds were invested in low-carbon solutions. Just 15 percent excluded fossil fuels in some form, and 65 percent had no climate policy at all. ShareAction’s guide to speaking to your employer about your pension fund or campaigns such as Make My Money Matter in the UK, shares resources on how to take action.
Make regenerative investments. If you are an investor, consider shifting your capital to ethical and regenerative investments. Not only is this a better business decision, but active investment and divestment can encourage other investors to do the same. If you are looking for guidance, consider working with regenerative advisory firms. Chordata Capital is one such wealth management firm that helps move its clients’ investments off Wall Street and into community-controlled investments that center on racial justice.
Groups
Developed Nation Policymakers and Large NGOs
Offer “debt swaps” to developing countries. Debt swaps are policy options that allow countries to settle debt while also protecting the environment. They work by forgiving foreign debt on the condition that the government of that country devotes resources to fighting climate change and other environmental issues. Many countries could benefit from debt swaps, from Vietnam to Kenya to Cape Verde, and because it is a results-based system, the nation in debt needs to follow through on promised action. In February 2016, the Seychelles committed to increasing its ocean protection from just 0.04 percent to 30 percent by 2020—a goal the country met, ensuring that 410,000 square kilometers were protected. The debt conversion deal, designed by the Seychelles government and the Nature Conservancy, ultimately forgave a $21.6 million debt in exchange for investing in conservation, including the 30 percent marine protection goal.
Shareholders
Shareholder activism can put pressure on corporations to change their climate priorities. All publicly listed companies must hold one annual general meeting (AGM) of shareholders each year, where shareholders can ask critical questions or file (green) resolutions. Through proxy contests, activist shareholders can also try to win over other shareholders or win board seats, as occurred in May 2021 at ExxonMobil and Chevron.
Companies
Disclose and stop finance for fossil fuel, deforestation, overfishing, and ecosystem-degrading projects. If your organization has invested in polluting and extractive industries, halt further investment in such projects and publicly commit to a transition to regenerative work. Consider allocating the resources necessary to offset historical damages.
Publicly announce a commitment to the Principles for Paris-Aligned Financial Institutions. Disclose actionable plans that commit to halving emissions by 2030 and reaching effective zero by 2050, protecting and restoring our natural carbon sinks, and ensuring human rights of communities and workers.
Internalize the true cost of production. Accounting for the trust cost of a product or service involves including the social and environmental costs that are often externalized by companies. The food industry is one such area in which true cost accounting (TCA) is being experimented with.
Governance
Finance regenerative projects using green bonds. Leverage bonds specifically earmarked for regenerative projects using guidelines such as the Green Bond Principles or the EU Green Bond Standard. The Energy Security and Efficiency Enhancement Project in Jamaica and Indonesia’s Green Sukuk are examples of using green bonds for renewable energy infrastructure and net-zero building projects.
Embed climate considerations in the operations of national banks. Central banks supervise the monetary and financial system and are key players in creating a regenerative financial system. They should adopt monetary tools to immediately stop extractive and polluting activities. Corporate asset purchases should be reserved only for businesses that are aligned with a 1.5°C degree trajectory, and all fossil fuel-related activities should be excluded from the central bank’s list of collaterals.
Set up green banks. Green banks are widely considered the missing public financial institution that can mobilize large amounts of capital for a climate transition. The NRDC (Natural Resources Defense Council) report on the State of Green Banks 2020 provides a helpful overview for policymakers seeking to set up green banks.
Prevent greenwashing and channel investment toward sustainable activities by developing a green taxonomy, a classification system for economic activities that helps mobilize capital in the direction of the climate transition. The first green taxonomy was developed by the EU in response to the discovery that Europe would need to invest more than €700 billion per year to meet its energy transition goals. The EU's taxonomy covers six environmental objectives, including climate change mitigation, pollution prevention, and the transition to a circular economy. Other countries such as the UK and Canada have followed suit.
Bad Actors
Boycott/divest from extractive financial institutions. Based on the Banking on Climate Chaos 2021 report, the top five fossil fuel financiers are below. View the full analysis here.
JPMorgan Chase: Jamie Dimon is the Chairman of the Board and CEO. His email is jamie.dimon@jpmorgan.com.
Citi: Jane Fraser is the CEO. Her LinkedIn profile is here.
Wells Fargo: Charles W. Scharf is the President and CEO. The Board of Directors, including Mr. Scharf can be contacted at boardcommunications@wellsfargo.com.
Bank of America: Brian Moynihan is the CEO and he can be contacted via the Board of Directors, as listed here.
RBC: Dave McKay is the CEO. His LinkedIn profile is here.
Key Players
Regenerative Financing
Boston Ujima Project is home to the Nation's first democratically governed investment fund. Our members have invested $1.6MM and counting in BIPoC-owned small businesses and cooperatives.
Thousand Currents has invested more than $31 million in 1,000 grassroots and movement formations in the Global South.
Seed Commons is a cooperative network for non-extractive finance, one that advances workplace democracy and grows the capacity of communities to determine their own economic future, starting with the workers the current system excludes.
The Path to Freedom is solidarity economy exchange to black women and entrepreneurs.
Chordata Capital is an anticapitalist wealth management firm that moves capital into community-controlled investments.
Adasina Social Capital is committed to making large-scale, systemic change through investments in public markets.
GIVE is a community that offers online courses, a book, and consulting to help everyone manage their money, make a difference, and invest with impact.
Atmos Financial provides an alternative climate-positive banking solution that funds projects enabling a carbon-free future.
Blue Forest leverages private capital to finance forest restoration projects on public and private land.
Triodos Bank finances progressive entrepreneurs and influences the banking sector to become more transparent, diverse, and sustainable.
Movements and Campaigns
CADTM (France) is a committee for the abolition of illegitimate debt.
Positive Money (Global) is an international organization working to redesign our economic system for social justice and a liveable planet.
Stop the Money Pipeline is a coalition of 230+ organizations working to hold the financial sector accountable for its role in fueling climate chaos.
Debt Justice (UK) is a charity working to end poverty caused by unjust debt.
Learn
Transformative Investment Principles by Resource Generation
8 Principles of a Regenerative Economy by Capital Institute
Financial Stability in a Planetary Emergency by Climate Safe Lending Network
Banking on Climate Chaos: Fossil Fuel Finance Report 2021 by Reclaim Finance
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