Day 15: Move Your Money Out of Banks That Fund Climate Chaos
Also... Bitcoin and NFTs consume waaaaay too much energy
As I talked about on Day 5: Cut Up Your Big Bank Credit Card, the fossil fuel industry needs money to operate and the big banks have continued to supply it to them, despite all their talk of “net zero” this and “carbon neutral” that. Despite the sustainability claims, since the Paris Agreement of 2015, banks around the world have poured $3.8 trillion into fossil fuel companies. In other words, the banks fund the climate crisis.
But here is some good news. Since it first began a little over a decade ago on US campuses before quickly spreading worldwide, the divestment movement has pushed institutions—universities and pension funds and churches—to commit to divesting from fossil fuel investments to the tune of $39.88 trillion, according to the Global Fossil Fuel Divestment Commitments Database, maintained by Stand.earth in partnership with 350.org. That’s more than the combined annual GDPs of the US and China and marks the largest divestment campaign in history.
By cutting off the flow of money—money we individuals deposit in the bank for safekeeping, not planetary destruction—we may be able to cut the flow of fossil fuels.
How and where to move your money
Step 1: Check your bank’s score in the report, Banking on Climate Chaos
Look up your bank here. If it scores poorly (spoiler: if it’s big, it does), then proceed to step 2.
Step 2: Make a list of your accounts at your current bank
If you have opened accounts all over town and use multiple credit cards, you now have a chance to consolidate everything and simplify your financial life. Include accounts such as checking, savings, mutual funds and EFTs, IRAs, CDs, bonds, stocks and so on.
Step 3: Make a list of prospective banks and choose one
What do you need? Widely accessible and free ATMs? A decent interest rate on your savings account? The ability to transfer money without paying fees (with Zelle, for example)? My credit union doesn’t work with Zelle but I will happily tolerate this minute inconvenience in order to dump a big bank.
The following banks have either no investment or little investment to speak of in fossil fuels.
Some banks to check out in the US
Non-profit credit unions serve customers. Mine also pays a halfway decent interest rate on savings accounts. And I don’t pay fees on my checking or savings accounts. Search for a credit union here.
Amalgamated Bank, located in San Francisco, New York City and Washington DC
Ando, online only
Aspiration, also online only
Atmos, also online, also starts with the letter A
Beneficial State Bank, located in California, Oregon, Washington
Some banks to check out in Canada
Vancity, a credit union in and around Vancouver
Desjardins, mostly Quebec and Ontario
Step 4: Join the new bank or credit union
When you join a credit union, you become a member. You can likely join online.
Step 5: Open your new accounts
Checking: If you receive your paycheck by direct deposit, notify your company’s HR or your boss that you’ve switched banks and provide your new account and routing numbers. Set up bill pay for recurring payments.
Savings: Open a savings account if you need one.
Investment accounts: You’ll need to ask for paperwork from your new bank to move these from your old bank.
Step 6: Move your money
Transfer any balances in your old checking and savings to your new account. If you can’t do it electronically, write yourself a check and deposit it to your new bank account.
Move your investments: mutual funds, EFTs, CDs (GICs in Canada), IRA, stocks, bonds—this is the important stuff. This is where you money is (unless you keep quite a bit of money in a low interest-bearing savings account).
Step 7: Break up with your bank
After you have moved all of your financial transactions to the new bank, it’s time to break up with the bank. Don’t feel guilty about dumping them, no matter how much you may like your financial advisor. You (and the planet) deserve better!
Go into the branch and tell the teller or bank manager why it’s over or call the bank and break up over the phone. You can likely close everything online but then you won’t have the satisfaction of explaining that you’re leaving because the bank finances the climate crisis.
Step 8: Investigate what you’ve invested in
If you have investments, this step will make the biggest impact. Look up your mutual funds and EFTs at Fossil Free Funds to find out if your savings are invested in fossil fuels. Go here to find the top-rated funds. (You can do take step regardless of where you bank.)
Do you need a coach?
Moving your money can be daunting. The hardest part is sitting down to do it. If you live in the US, you can arrange for a money-moving coach through THIS! Is What We Did. THIS! is located in San Jose, California but has worked with people all over the country, in Michigan, New York, Texas, Oregon and elsewhere. You can get coaching via email or phone. THIS! also offers classes on climate communication.
Speaking of money and investments… Bitcoin and NFTs
You may have heard that Bitcoin consumes obscene amounts of energy. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin consumes nearly 126 tWh per year globally. To help put that into context, the site offers some helpful comparisons. For example, Bitcoin mining consumes:
Nearly the same amount of energy as actual gold mining
More energy in a year than all the refrigerators in US homes
More energy than the entire country of Ukraine
And according to the Digiconomist, one bitcoin transaction consumes the same amount of energy as the average US household uses in 77 days.
How is this possible—during a climate crisis?
Miners solve cryptographic puzzles on a decentralized network called a blockchain. Whoever solves a new block of puzzles first receives a newly minted Bitcoin. The ability to solve these puzzles quickly gives the Bitcoin minor an advantage but that advantage requires lots of computing power. So individual miners turn to more powerful “mining rigs” and then more consolidated mining groups. Because this mining arms race uses so much energy, minors flock toward cheap energy—coal in China (until China clamped down on Bitcoin), then coal in Kazakhstan (recent social unrest will likely end that), and even retired coal plants brought back online here in the US—just for Bitcoin. One financial company, Greenridge Generation, has started to buy its own power plants in order to bring its Bitcoin dreams to fruition. The company claims to be 100 percent carbon-neutral, in part due to carbon offsets (the greenwashing in the financial services is strong).
(Read more about Bitcoin’s environmental footprint in Elizabeth Kolbert’s excellent article in The New Yorker “Why Bitcoin Is Bad for the Environment.”)
Similarly, the Ethereum blockchain powers the NFT craze and each transaction also requires vast amounts of energy, not for digital currency but for digital art that has been embedded with a non-fungible token (NFT) to verify ownership of the image—a digital image that anyone, any time can look at on a screen. Going back to Digiconomist, we see that one Ethereum transaction consumes as much energy as the average American household for 8.2 days.
All of this is to say be careful where you park your money. Pulling money out of one fossil fuel-enabling bank to put it into fossil fuel-guzzling crypto sounds like a game of enviro whack-a-mole.
Have you divested? What was the hardest part? The easiest?