Recycling, reducing plastic use, opting for alternative modes of transportation – these are all ways that are frequently suggested for tackling climate change, but what about fiscal investments? How does the way you spend your money affect climate change and could you be spending your money more prudently?
Being a responsible consumer is actually one of the ways to reduce the harmful impacts of climate change. Supporting small businesses does not only keep them afloat, but also reduces the large amounts of waste involved in supporting corporate operations. Think about it this way – smaller companies are less likely to be mass producing product and often manufacture to order, only servicing certain areas. Therefore, with a reduced chance of mass production, carbon emission rates will be lower.
Thirty-five of the largest well-known banks across the world have provided £2 trillion to fossil fuel companies since the 2015 Paris Agreement.ᶦ Some of these banks have even boldly implemented their own climate change policies, but upon perusing their partnerships, these policies reveal themselves as redundant, if not hypocritical.
Many personal account holders are unaware of their influence over who their banks invest in, indicating that climate performance is an important factor in choosing who you bank with can have an impact. If banks notice that more individuals are interested in taking their service to companies that support good climate performance, they are likely to be careful with who they invest in.
Alternatively, you could opt for a smaller, ethical bank. When considering an ethical savings account, Ethical Consumer (a non-profit website)ᶦᶦ, states you should consider two things: 1) clarity about how your money would be invested, and 2) whether it is mutual – owned by depositors (people keeping money in the bank) rather than shareholders.
There are several campaigns taking place with the aim of putting pressure on banks to stop investing in fossil fuel companies. Barclays, one of the largest banks in the UK, has funded $85 billion for fossil fuels over the last three years;ᶦᶦᶦ Divest Barclays is a campaign that demands the cessation of future fossil fuel project funding and hopes to later progress to pressuring Barclays to divest from existing projects. By getting involved in such campaigns, you can help hold larger banks accountable for their less-than-transparent indiscretions. You can help banks take responsibility for their investments.
Choosing a bank can be difficult. We want to keep our money safe, so often these unethical banks are the ones we go for as they have a recognisable brand and a large client-user base. There are smaller ethical banks, but with that option comes the risk of less familiarity and less funding. If you choose to go for the larger banks, consider their climate policies and look at what they have been doing recently to help climate change.
ᶦ Jocelyn Timperley, ‘Why your banking habits matter for the climate’, BBC (London, 27 January 2021) < https://www.bbc.com/future/article/20210126-how-you-invest-your-money-can-help-tackle-climate-change > accessed 1 September 2021
ᶦᶦ Ruth Strange, Ethical Consumer (2 September 2020) <https://www.ethicalconsumer.org/money-finance/shopping-guide/ethical-savings-accounts > accessed 1 September 2021
ᶦᶦᶦ People and Planet, Divest Barclays < https://peopleandplanet.org/divest-barclays > accessed 1 September 2021