How Your Bank Can Help Fight Climate Change

The world is getting hotter and hotter. For the past 10 months in a row, the planet has had record-high temperatures. If you ever get the feeling that winter is disappearing, spring is ominously warm, and summers are getting unbearably hot, you're not alone -- it really is getting hotter, and humanity needs to take action to stave off the worst-case scenarios of climate change.

Your choice of where to open a bank account can make a difference in the climate change battle. "Green banking" is a growing trend among eco-conscious bank customers who want to put their money into climate-friendly banks and investments.

In honor of Earth Day, April 22, 2024, let's look at a few interesting banks that are taking action to fight climate change -- and how your banking decisions can make a difference.

What is "green banking"?

Banks are not often thought of as heavily polluting, carbon-emitting businesses. After all, banks don't have smokestacks and coal mines, and they don't have oil wells by the ATMs. But banks often lend money to oil, gas, coal, and other carbon-intensive industries that are driving climate change.

You might not know it, but the money in your bank account could be getting used to help make loans to an oil company or a coal mine. Even if you personally care about the environment and are worried about climate change, no matter how many electric vehicles you buy or how rigorously you recycle, the money in your bank account might be working against your values.

But more people are demanding that banks stop investing in fossil fuels. So some banks and credit unions have made a specific commitment to not finance any fossil fuel activity, or make special loans that are dedicated to renewable energy and sustainability, like solar panels or electric vehicle chargers.

When you put your money into a green bank, you can help with the climate change fight by defunding fossil fuel projects and nudging the economy in a more climate-friendly direction. Here are a few of America's top-rated "green banks."

Amalgamated Bank

Amalgamated Bank was the first U.S. bank to publish its Net Zero Climate Targets, and it has pledged not to lend to fossil fuel companies. In fact, 32% of Amalgamated Bank's loan portfolio is dedicated to climate solutions. Amalgamated Bank also offers investors a Fossil Fuel Free Portfolio, so you can put your money into companies that are developing renewable energy and reducing carbon emissions.

Aspiration

Aspiration is an eco-friendly fintech that offers banking services through its partner bank, Coastal Community Bank, member FDIC. With its unique Plant Your Change (PYC) program, Aspiration members can use their spare change to help plant a tree with every purchase they make. This program has helped plant over 27 million trees, the equivalent of removing 974,000 gas-burning cars from the road for a year.

When you use your Aspiration debit card at a business that belongs to the Conscience Coalition^TM, you can get up to 10% cash back. (Terms apply.) For investors, Aspiration offers the Aspiration Redwood Fund, an ESG investment fund that lets you buy stocks in a diversified portfolio of companies chosen for their sustainability practices.

Atmos Financial

Atmos Financial is another climate-friendly fintech that provides banking services through its partner bank, Five Star Bank in Warsaw, New York (member FDIC). Atmos offers a cash back rewards checking account that pays up to 5% cash back when you spend with sustainable brands and businesses.

The Atmos high-yield savings account pays 3.75% APY (as of April 14, 2024) when you make a monthly donation to a qualifying climate nonprofit. Want to put solar panels on your home? Atmos Financial also provides solar loans, and claims to offer up to 90% lower financing fees than a typical lender.

Clean Energy Credit Union

Clean Energy Credit Union is dedicated to helping its members finance clean energy. It offers an array of green banking loans, including electric vehicle loans, solar photovoltaic system loans, geothermal heat pump system loans, green home improvement loans, and more. This credit union even has Carbon Zero Teen Accounts for kids who want to use their money to fight climate change.

Climate First Bank

Based in Florida, Climate First Bank is a commercial bank dedicated to fighting climate change. It offers a range of climate-friendly loans, such as residential solar loans and electric and hybrid vehicle loans. Climate First Bank offers some intriguing options for high-yield savings accounts and checking accounts; its Choice Money Market and Choice Checking Account were both paying 5.34% APY as of April 14, 2024. This bank also offers no-penalty CDs.

Bottom line

There is still time to take action on the climate crisis, and banking can make a big difference. If you want to put your money where your mouth is, consider banking with a "green bank." The site Bank.Green offers a list of banks and credit unions that rate highly for sustainability.