Thinking green banks? Here’s why you might switch
As Australians continue to fight climate change, many are looking to make their finances greener by choosing the right bank. Why do this? Well, in short, by changing to a green financial provider, you can move your money out of banks that invest in fossil fuels or that impact the environment in other ways.
Let’s take a closer look at green options then.
What is a green bank?
A green bank is a financial institution that has committed to never invest in the fossil fuel industry or other climate damaging industries.
You might be thinking: I don’t invest in those things though!
But you might - indirectly. So, to better understand how green banking works, first you have to understand how banks work.
When you deposit money into your bank account it doesn’t simply sit there gathering dust in a vault. It actually forms part of the bank’s funding, known as its ‘funds under management’, which means that the bank can use that cash for other purposes, like investing. Such investments could potentially go into fossil fuels.
To give some context here, consider that there was a total of 3.8 trillion USD invested in fossil fuels between 2016 and 2020 by the world’s 60 largest banks, said a 2021 Banking on Climate Chaos report.
This is a huge figure and deserves each of us weighing up our banking choices.
Why should I consider a green bank?
As mentioned above, many major banks around the world continue to invest in fossil fuels, even when scientists agree that burning fossil fuels is bad for the environment. Last year, the Intergovernmental Panel on Climate Change (IPCC) report, also added evidence that if banking sectors globally don’t reduce their emissions it could prove dangerous for the planet.
So what steps might you take from here?
Well, you do have an option to switch products. By switching to a green bank, you can rest easy knowing your money won't be invested in such fossil fuels, like coal. If enough people transfer their money away from fossil fuel investing banks, maybe it will prove to be enough initiative to stop them from actually investing in coal.
Nowadays, switching banks is pretty easy and can be done in a couple of clicks. And you have options. In Australia there are several banks that are environmentally conscious and don’t invest in fossil fuels.
What are some green banking options in Australia?
If you are looking for some green banks you’ve come to the right place. Below you will find some of our favourite banks who are considered green by Market Forces, and which seem to have investing strategies that are safer for the planet.
- Offers green personal loans
- 2021 Mozo People’s Choice Award winner in the credit card category
- Certified carbon neutral
Bendigo Bank won four Mozo People’s Choice Awards in 2021. The bank offers services like: personal loans, home loans, credit cards, term deposits, savings and bank accounts. Some of their long-term environmental targets include installing solar panels in their branches and offices, purchasing 100% renewable energy by 2025 and reducing absolute emissions by 50% by 2030. Bendigo Bank is also certified carbon neutral.
Great Southern Bank
- Certified carbon neutral
- 2021 Mozo People’s Choice Award winner in Excellent Customer Service and Highly Trusted categories
Great Southern Bank (formerly CUA) is a member-owned bank with more than 70 branches. The bank has personal and home loans, credit cards, term deposits and savings and everyday accounts. Great Southern Bank is certified carbon neutral and joined the UN Global Compact. It also does not invest in the fossil fuel industry.
- 2021 Mozo Experts Choice Award winner in the Regular Saver category
- 90% of branches are 100% self-sufficient in renewable energy
- Head office has a four star rating with the National Australian Built Environment Rating System
MyState Bank, a Tasmania based bank, does not invest in any coal, gas or oil projects. Their Bonus Saver Account was the winner of a 2021 Mozo Experts Choice Award in the Regular Saver category. In terms of the environment, the company claims that the majority of its cars and branches are eco-friendly. It also doesn’t invest in coal, gas or oil projects. The bank offers loans, insurance and different types of banking accounts.
- 2021 Mozo Expert Choice Award winner in the Green Home Loan category
- Run on 100% renewable electricity
- Certified carbon neutral since 2011
Bank Australia doesn’t invest in fossil fuels, live animal export, arms industry, gambling or tobacco. One of the company’s key values is having clean money that helps the planet thrive. It offers personal, car and home loans, credit and debit cards, savings and bank accounts, and term deposits. In 2020, Bank Australia received B Corp certification for their environmental impact. The bank has also been carbon neutral since 2011 and runs on 100% renewable electricity.
If you want to learn more about green money saving products check out Mozo’s family finances page.