The Banks Growing Money on Trees (bonus episode from “Outside Podcast”)

Amy Scott: Hey How We Survive Listeners, host Amy Scott here. This week we’re dropping into your feed to tell you about another podcast we think you might like from our friends at Outside. This episode looks at the climate impacts of where we put our money. Hope you enjoy it.

Peter Frick-Wright: This is the Outside Podcast.

If you’re around my age, in your late 30s, you probably grew up with the messaging that you can save the world. Whether it’s through composting, recycling, organic this or fair trade that, we were all told that our individual choices were the thing that mattered.

And I don’t know if you’ve talked to kids lately, but that messaging has changed. The new word in saving the world is holding companies accountable. It’s group actions, legislation, policy, not letting companies externalize their costs and pollute without paying for it.

Recycling doesn’t hurt anything, but there is an argument to be made that focusing on your own actions, which are never going to be perfect, just perpetuates a shame and guilt spiral that keeps your focus on yourself, on your own powerlessness. It keeps you from doing anything that matters.

It’s weird to grow up with good intentions, knowing something to be true, and then have people suddenly tell you, “That thing you were doing? There’s a better way. Don’t do that. Do this.”

So how do you create meaningful impact with your own choices and actions while simultaneously holding bigger corporate entities accountable for their pollution? Can you have it both ways?

Outside contributor Cat Jaffee recently showed one way that you could. That no one seems to talk about. Here’s Cat.

Margaret at Chase: Hi, this is Margaret at Chase. May I ask for your name?

Cat Jaffee (Interview): Yeah, my name is Cat Jaffee.

Margaret at Chase: Thank you. Good morning to Ms. Traffee. What can I do for you today?

Cat (Interview): Um, I actually just have some bigger questions about my bank accounts and Chase’s policies around, um, issuing loans I’ve been working on a story for Outside magazine. And I wanted to ask, about like what happens when someone like me calls and says they want to close a bank account because, um, because of. Like how the money that I have saved is being lent out. Is, can I ask you those questions?

Margaret at Chase: Oh, sure. Yes, go ahead then, Ms. Jaffee,

Cat: On this call, I’m nervous. I’m sitting at my kitchen table. And maybe you can hear in my voice that I’m not sure how to ask a representative from one of the biggest banks in the world… might you consider changing the way you handle money?

Before I share the rest of the call, let me introduce myself. And my motives. My name is Cat, I’m a journalist. And I care about the environment. But it’s not my whole life.

I fly on planes internationally, at least once a year. I eat meat. I love taking baths. But, I also bike-commute for as many errands as I can. About a quarter of the food I buy is grown and produced locally. I power my house with solar panels. Most of my clothes are thrifted. I’m guessing that many of you are probably like me in some way. We balance a sea of personal decisions with the climate in mind.

It’s tough to know where to put your effort. There are personal actions, like recycling or biking that are great, but can feel too small. And then there are policy and systemic shifts that are more influential, but harder to make happen.

And then, a few months ago, I heard about this one thing we could all do that would have more impact than the bike commuting and solar panels.  A simple action that could offset the flights and the meat and the driving — combined. And, it wouldn’t cost money. It’s something we wouldn’t even notice.

Beth Birchfield: And not only was I astonished that I’d never been taught this, but especially having a degree in economics, how did this never come across.

Cat: This is my friend Beth Birchfield, she was the only person I knew who had done this elusive climate change hack. And I called her for advice, because, for as easy as it sounds, I myself struggled to do it. This secret thing? Is changing where you have your bank account.

When I polled my friends about climate change tricks, I wasn’t surprised that Beth would be the most eager to talk to me. She’s the archetype of a tree-hugging do-gooder from Denver, Colorado. She loves the outdoors, backyard beekeeping. live music and a good beer.

Beth:: and hanging out with my friends and family.

Cat: She’s the kind of person who’s always rescuing dogs.

Beth:: It’s, it’s a joke within my friend group that, you know, if you go out to lunch with me, there’s a chance that there’ll be a stray dog. I do feel like they find me because I know I’m gonna, um, get them back to wherever they need to go.

Cat: The kind of person who has a sign in her yard.

Beth:: yep, I’ll absolutely use our yard as a statement.

Cat: She’s even co-founded a climate awareness non-profit called Women and Sustainability. And what makes Beth interesting to me is that of all the things she does, the beekeeping, the yard signs, the dog rescuing…Beth believes the most impactful thing we can do is pay attention to where our money is.

But even Beth didn’t know about the impact of changing banks, until fairly recently.

Beth: I was reading an article about divestment, and I immediately assumed that it was talking about making sure that you’re not personally buying stocks in companies that are helping fund the climate catastrophe.

Cat: Divestment is the act of moving money or investments away from an industry or country or cause, and then reinvesting that money into something else. But this article wasn’t about divestments. Or investments. It was about how banks issue loans.

Beth: What I learned is that just having a bank account in certain banks, they were using everybody’s money in all of the different projects that I was fighting against

Cat: Beth is talking about banks funding pipeline expansions and deep sea drilling and liquid natural gas depots. The kinds of projects that she would protest against with a yard sign. So like, if you had $100 dollars in a conventional wall street bank account. About $24 of those dollars are issued in loans to finance fossil fuel projects. And banks can do this because very few of us think about what actually happens to our money once we put it in the bank. In our minds, it’s just sort of sitting there, waiting for us.

Beth: Like we picture almost like a cartoon of just like stacks of gold and cash

Cat: But a bank is a business. And like any business, it tries to make profits, for itself and its shareholders. It does this by pooling together most of our money and then reissuing our funds as loans to projects that it hopes will make more money. Banks have our permission to do this, because when we open a bank account, we sign an agreement stating that our money is “fungible.” This means it’s interchangeable, and it can be used for any bank activities. That can be bank salaries, consultation services, or loans. But for Beth, she wants to make sure she has more of a say on what her money goes towards.

Beth: After figuring it out, I realized that it is maybe the most important thing that you can do to fight the climate crisis is being conscious of where you bank and what you do with your money and what your bank is doing with your money as a result.

Cat: Banks don’t all invest money the same way. Some are better and others worse for the environment. I was curious about my own banking carbon footprint, so I recorded myself while I used an online tool that would tell me how my account at Chase bank stacks up.

Cat (Recorded): Okay, so, I’m so congested today because there’s all this fire smoke in the air from a forest fire. So, here I am. Trying to figure out how much my, um, carbon footprint is through my bank account while I am struggling to breathe from the fire smoke.

Feels ironic. Anyways, so I’m heading to topofinance.org backslash calculator and I get this homepage and it says where you bank matters. And it says, want to calculate the emissions enabled by your money? And there’s kind of this first, um, blank section where I select my bank. I see Chase, Bank of America, Citibank. And then there’s a second option to put in money. I’m typing 7, 000. and sniffling. And then see results. And what comes up for me.

Is it says, with my 7,000, my estimated banking emission at Chase is 2. 1 metric tons of CO2 emissions per year. And it looks like if I were to switch that to a greener bank, Um, so a bank that is not investing in, the expansion of fossil fuel projects, I would decrease that by 1. 7 metric tons of CO2 emissions a year and, luckily it gives us some numbers that are a little bit more understandable. So if I were to move my money, my 7,000, it would mean, 4, 000 fewer miles driven. It would mean 37 fewer pounds of beef eaten, and it would mean seven fewer six hour flights. And this was 7,000. I mean, just for fun I’m going to put 1,000,000.

That’s 1, 2, 3, 4, 5, 6 zeros. 1, Let’s see results. Oh, man. You don’t even want to know. It’s pretty bad. So moving a million dollars from a bank account that invests in carbon intensive industries to a green bank would be the equivalent of, um, taking over a thousand less six hour flights or driving, um, over half a million less miles or eating 5,000 less pounds of beef, um, for perspective.

Cat:  You can try this yourself, T-O-P-O Finance-dot-org slash calculator. And there’s a link in the show notes.

I was surprised there was such a simple tool for measuring something I considered pretty complicated. I always thought that individual actions – like where you store your money – would be a jumble of direct and indirect impacts. How could anything like that be quantified? But here it was, a calculator showing me how much carbon I could save by moving bank accounts. Paul Moinster, the creator of the Topo Finance calculator, told me: that’s kind of the point…

Paul Moinster: Banking is boring, like, you don’t think about your banking, and so like, what I jokingly tell people all the time is that banking is boring until you figure out it’s the key to saving the world and mitigating the climate crisis,

Cat: Paul designed this calculator, he runs a climate finance consultancy. And he is also the founder and executive director of Topo Finance.

Paul: Which is a nonprofit that works to transform the financial system into a force for creating a more, uh, just and environmentally safe world.

Cat: Before Paul entered into finance, he worked in environmental policy in Washington D.C.

Paul: I realized very quickly that sitting in a cubicle and analyzing environmental policies was not a path for me.

Cat: Paul moved on and bounced between different projects for a while, trying to find something with more of a systemic impact. Then in 2020, he had a surprising meeting in Denver where he learned about one of the most systemic of systems. The financial system.

Paul: I met with Bank of the West and I had no idea why they were trying to meet with me or what, why I was going to go meet with some bank. And essentially they explained to me how the financial system is the engine and the invisible hand of the climate [00:13:00] crisis and environmental crisis and social injustice around the world. And I realized that I had sort of found the thing that I had kind of been searching for.

Cat: So Paul started Topo Finance, and he looked at the ways major companies were acting on climate commitments. In the past decade, there’s been promising legislation signed by many countries and businesses.

There was the Paris Agreement of 2016, the Glasgow climate pact of 2021. And Paul wanted to see how banking factored into these agreements for the biggest companies. The Googles and Apples of the world.

Paul: And because I’m a nerd and I would go through some of their statements and I would realize that there was no, nothing in there about banking. And so we set out on kind of a three-pronged project to answer these three questions. Which was like. One, are these companies working on this and they’re just not talking about it? Two, could you measure the emissions that stem from their banking and investing?  And then three, is there any regulatory framework, the, the sort of rules of the road that companies use to measure and report emissions, does banking and investing fit underneath those?

Cat: Paul wanted to know: did where these companies kept their money factor into their overall carbon footprint calculations? And if not, how did those less visible “banking emissions” compare to the carbon footprint that they were thinking about? Things like the emissions created by building and transporting their products?

Paul: And essentially what we found, uh, and I’ll never forget the moment we were doing the math and I, I, I was working with a, a, colleague of mine now at Topo Finance named, James Ficarro and we were sort of doing back of the envelope math.

And I was like, James, what are we talking about here? Like 3%? 5%? When we were looking at, at Apple’s emissions. And he was like, I think it’s like 50%. And it was this sort of, uh, jaw dropping moment, and then as our math got better, we realized that it’s even bigger that that basically for companies like Apple and Microsoft and Google, the emissions that stem from their banking and investing is larger than everything else they do as a company combined, and that includes, you know, the emissions that stem from being on an Apple phone, recording this podcast with you.

Cat: Paul and Topo Finance released a report of their findings. It’s called the Carbon Bankroll 2.0.

Paul: And it basically shows that, um, our banking and investing is not only one of the largest drivers of emissions for many of these companies, um, it’s also their greatest lever for climate action, and it lays out a plan for what these big companies can do to start aligning their banking and investing with other climate objectives.

Cat: So, if where companies keep their money has an even more significant impact on the climate crisis than how they make, ship, and sell their products, how does this translate to someone like me? Besides moving my money, what can I do? And why aren’t more people doing it?

That’s after the break.

[Ad Break]

Cat: Before the break, Paul told me that one of the biggest drivers of carbon emissions is where big companies keep their money. But what about little tiny companies? Like, a one-person company that mostly produces podcast episodes? What could I do? First, I wanted to know what Beth did…

Beth: I started with a panic attack so, after I figured that out, I made the conscious decision to start moving my money over, um, it is a little bit of a to do, but I would say at least in my like personal circle, I can probably name at least 20 to 30 people that have made different decisions about where they bank as a result of finding out this information.

Cat: The solution seems simple enough. Close your accounts at big banks and move your money to a better bank. A green bank. bank.green can help you find one. The site shows what projects your banks are financing. When I plugged in Wells Fargo, which is where Beth originally banked, I learned they fund the Mountain Valley Pipeline in North Carolina. And when I tried out Chase, I found that they issue loans to the Philippine government to develop natural gas terminals and power plants in Batangas. In terms of biodiversity and global significance, the Batangas region is considered the ocean’s equivalent of the amazon.

Bank.green then provides a list of green bank alternatives. Atmos Financial and Walden Mutual seemed to have the most features, but there were a number of credit unions and local banks listed. Yet even with all kinds of arguments pointing towards moving money from a big bank, to a greener option. I had some weird hangups about switching banks.

Paul: It’s private, like, you don’t know who your friends bank with like this is something that we don’t talk about. And it’s not something that you wear on your sleeve. Like you would wear a Patagonia or when you get in your car and you drive a Tesla. And so I think to some degree it’s, there’s a lack of, you know, the social cues that you get that help drive catalytic change, um, in the environmental movement, don’t exist as much in banking.

Cat:  Finance and banking is private, and there isn’t the kind of status or satisfaction you might get from buying a [00:18:00] fancy new electric vehicle or a sweet new jacket made entirely from recycled plastic bottles. There’s also a lack of access. Like, some people live closer to local credit unions or green banks while others don’t. And then, there are the lack of perks.

Paul:  The stickiness of banking is real and some of it is like you get hooked on the points and you get hooked on the, you know, the ability to get into. You know, the clubs are to get free, you know, hotels, and a lot of the greener banks do not offer that.

Cat: Not to mention, closing credit cards can lower your credit.

Paul: if you’re looking to move your money from your chase bank to an, like, it’s not just an easy switch where it’s a seamless thing where you can automatically get the same services and stuff for everyone.

There’s supply of solutions is insufficient for the demand, um, that we are generating, especially when it comes to big companies or big organizations that have very complex banking needs or that have more money than most of these green banks have.

Cat: Because of all these factors, ending our relationships with our banks is not something people often do.

Paul: when a person buys a house in this country, uh, the average length of home ownership is around 13 years. When they buy a car, the average length of their ownership of their vehicle is around eight and a half years. When they open a primary banking account, that bank account, generally they have that primary bank account for 17. 75 years.

Cat: So those are the sticking points.

Paul:  But the good thing is that 95 percent of people in the United States have bank accounts Which creates a huge opportunity for impact because this is a solution that’s available for 95 percent of people It also doesn’t, really cost anything from a, from an upfront investment standpoint.

Cat: Paul told me that if you move $10,000 from a big bank to a green bank, it has two times the impact each year of adopting a vegan diet. That’s about an 80% reduction in a carbon footprint. For free.

Paul: If you want to go out and you want to switch out your car for an EV, you are spending tens of thousands of dollars to get your new electric vehicle. Uh, when it comes to moving your money, it’s really just about time and about maybe sacrificing a little bit of the luxury of your, you know, your credit card points, et cetera.

Cat: Changing your bank account isn’t the only option. If you can’t move your money, you can still pressure your bank.

Paul: Go talk to your bank. Go tell them. You know that you don’t appreciate what they’re doing. I mean, they have, they’ve created the system that they have, because nobody’s bothered to ask the question or to hold them accountable for doing what they’re doing.

Cat: So I took Paul’s advice. I first wrote several emails to my bank’s media contact in the sustainability department. They didn’t respond. Next, I called Chase’s customer service line.

Cat (Interview): Well, OK so one of my questions is like, what are chase’s policies regarding who they will and won’t give loans to? Like An oil and gas company like how how do how does a bank determine what is or isn’t ethical?

Margaret from Chase: I see. Well, in terms of loans, well, I’m actually not familiar with the process itself, because I can only answer in terms of deposit account, like checking, savings, or debit card inquiry.

Cat: The person I spoke to politely offered to transfer me to the business loan department.

Cat (Interview): Yeah, okay, before you transfer me for just like individual accounts like mine. how much power does a customer like me have in determining what the money in my account goes towards? Like can I say as a Chase client, like, okay, so I’m saving my money. It’s in my account. Can it not be part of a pool of money that’s loaned out to fossil fuel companies? Is that something I have power over?

Margaret from Chase: Well, uh, to be honest, I really can’t answer that now.

Cat (Interview):  Thank you so much. I really appreciate it.

Margaret from Chase: It’s been a pleasure working with you too. Please stay in the line now, and thank you to the software team at Chase. One moment while we connect you with a customer service specialist.

Cat: The next person I spoke to was named Renee

Renee from Chase: Hello, this is Renee with Chase Business.

Cat: She listened to some of my questions, and she looked through a rolodex to see if there was anyone else she should or could transfer me to. I asked her if there was an FAQ about Chase’s policies towards transitioning to green banking. Ultimately I didn’t find a person or department I could speak with about the climate implications of banking with Chase.

Renee from Chase: I don’t believe I am in the right position in order to, um, speak to anything as far as,

Cat (Interview): Like, policy, yeah. All right. Well, thank you so much. Um, I do appreciate you, um, trying to help me.

Renee from Chase: And, um, yeah, thanks. Thank you again. My pleasure. Enjoy the rest of your day and good luck. Thanks. You too. Bye.

Cat:  I’ve been trying to figure out why it was so awkward for me to call and challenge my bank. Is it because they have my money? Was I subconsciously afraid that if I was too bothersome, they would just like, keep it? Or was it that I knew I would get a customer service specialist out there trying to do their job, who in the face of a giant banking institution is as powerless as I am? Thing is, I still had questions. Before transferring my own money away from Chase, I wanted to know if I had any kind of power to influence or change their actions by remaining as a customer. So I called one more person.

Rebecca Self: My name is Rebecca Self.

Cat:  Rebecca is the Managing Director and Founder of Seawolf Sustainability Consulting. She’s worked in the banking industry for 20 years.

Rebecca: My last role in the industry, I was the CFO of Sustainable Finance at HSBC.

Cat: First, I asked Rebecca how banks decide who they lend to.

Rebecca: So there is a mix and with regulations Um, banks will try not to bank criminals or, um, not bank, um, illegal activity. Um, so they’ll keep within the legal framework and the legislation, beyond that, Banks will have their own particular business models, their own particular demographics or customer profiles that they lend to, and that’s entirely voluntary. That’s up to them, and it’s set and agreed usually by their board, and they’ll have their own risk appetites.

Cat: Many big banks do have former oil and gas executives on their boards. For example, the Director of Goldman Sachs, Jessica Ulh is the former CFO of Shell. And Lee Raymond, the lead independent director at Chase is the former CEO of Exxon Mobil. So what about customers like me, how much influence do we have?

Rebecca: One really strong way a customer can send a signal to a bank, um, is to engage with that bank, write to that bank, speak to that bank about what they see as important. One barrier that I’ve seen in the past, um, as to why banks aren’t acting more quickly on climates, um, is that there’s a lack of customer demand or customers aren’t asking about this topic.

Cat: I sheepishly described my own experience of calling customer service, asking my questions, and not even knowing  entirely what to say. To my surprise, Rebecca actually said this was a good place to start.

Rebecca: So I think customer services is a first port of call but that is those calling centers, logging the calls, might not be an immediate answer, but at least having it recorded.

Cat: Rebecca also recommended becoming more informed about the specifics of how the bank is loaning out their money. Like, maybe don’t try to tell them about what you learned from a climate calculator. Instead, talk to them about your problems with specific projects that they’re funding. To find this out, she recommends reading their annual bank and climate report.

Rebecca: I’d do a sort of search for industry or energy, there’ll be a table usually somewhere about, in about halfway in the document that has all of the different sectors and industries that that bank lends to. So it’s that diversified loan portfolio. And usually there’s a comparative, so you can see year on year what that bank’s been doing. And if it’s gone up, if it’s gone down.

Cat:  I looked up the 2023 Chase annual report and searched for oil and gas. And while it was dense and vague, I found what I was looking for. They directly addressed the liquid natural gas programs in the Batangas and said that those projects had been delayed because protestors wanted them stopped. The report also said that Chase had originally issued the loan because they thought the alternative was a coal plant. Which is even worse than liquid natural gas. Okay so It’s kind of a squirrely response, but it was the sort of the proof I’ve been looking for. Something as giant as one of the world’s largest banks can be swayed by people paying attention. And the more these kinds of projects are delayed or even canceled, the higher the risk for investing in things like them. Consumer pressure works. Even if it’s not a singular solution.

Rebecca: The expansion of oil and gas, which is the piece that really needs to be limited and to be stopped. The banks are the intermediary. that provide funding and the policy level is the framework that the bank operates within. So there are a few changes that need to happen.

Number one, the appropriate policy framework needs to be there. So that’s the regulations, and we all have our own way we can influence that with our voting, for instance. Secondly, there’s the consumption side, the energy demand side. So that’s the real economy and that’s all of the things that we consume and use. But then importantly, the focus is on the banking intermediary piece here. And this is where, um, Beyond the demand side and the policy side, we can send that signal as consumers.

So we can choose to get in touch with our banks, write those messages, get in contact with customer services. We can also read the disclosures. and write to the banks about those disclosures and financial statements that we’ve seen.

Quite often inside a bank it can feel almost as if no one reads them and no one’s that interested. So really using the words that the bank has said and asking them what some of those things mean or asking them to stop funding the expansion of oil and gas.

Cat: So, what happened? Did I close my Chase account and move my money to a greener bank? Or did I keep my account at Chase, but make a mental note to regularly call and request they stop loaning my money to expanding fossil fuel projects?

The answer to both is “yes.”

Working on a story about climate change during a Colorado summer is a sobering process.  At times, writing about moving my money around to combat climate change felt like spitting on a forest fire. An immeasurable, mostly symbolic gesture. Sort of like calling a 200-year-old bank with trillions of dollars and asking them to change their business practices.Cat: But what if one of my friends saw me make the gesture, and they happened to have a water bottle? And what if one of their friends had a fire hose? And what if you organized a dozen hoses, and a fire helicopter, and got to work? You might be able to slowly, carefully, change the way that fire burned.

So, With this image in mind, I decided I am splitting my $7,000 into two accounts. One at Chase, and one at Atmos Financial. I’m thinking about it like a multi-pronged firefighting strategy. With the right collective pressure, maybe our big banks can change direction. I want to help be part of that. And by putting my money in a smaller green one, I’m taking away a little bit of the fire’s heat.

The smoke won’t totally clear, but it might get a little easier to breathe.

Peter: Cat Jaffee is a regular contributor to Outside and the creator of House of Pod. A podcast company.

A few more resources that we didn’t get a chance to talk about: Bank Forward has a banking climate calculator at bank-F-W-D.org.

If you have money in Index Funds, which is a very popular retirement strategy and another pot of money used to finance fossil fuels, you can look up how carbon intensive those funds are at fossilfreefunds.org.

This episode was written and produced by Cat Jaffee, with editing by me, Peter Frick-Wright

Music and sound design by Robbie Carver.

The Outside Podcast is made possible by our Outside Plus members. Learn more about all the benefits of membership at Outside Plus.