2024-01-03 15:04:43
Your HUF 350,000 in the bank causes as many emissions as if you were flying from New York to Seattle.
When you put money in the bank, it seems like it’s just sitting there in your account, ready to be taken out when you need it. In reality, however, the bank makes money on your money by lending it to companies that, in spite of climate change, emit brutal amounts of pollutants. Examples of such polluting companies are large processing plants.
So by leaving money in your bank account, you are unwittingly contributing to the worsening of the climate crisis. According to a new analysis, for every HUF 350,000 you leave in a bank, you indirectly cause the same amount of emissions every year as if you were flying from New York to Seattle. “We don’t really look at how the banks use the money in our bank account and where it actually circulates” – Jonathan Foley saidexecutive director of Project Drawdown, which published the analysis. “But when we look behind things, we see a lot of fossil fuels lying around.”
According to the study, switching to a climate-conscious bank can reduce these emissions by around 75 percent. Many people regularly say that we shouldn’t eat meat, don’t use our cars, don’t use gas boilers, because our carbon footprint is huge thanks to these, in fact keeping your money in the bank also has a carbon footprint.
However, many people underestimate the output of banking activity. “It’s not just skipping a hamburger, it’s also very important where my money is” Foley claimed.
Just as we can borrow money from banks, so can fossil fuel companies and companies that support the industry. The credit needs of fossil fuel companies vary from year to year, given the fluctuating prices of the fuels. This is where the consumer comes into the picture. “The money that an individual puts into their bank account allows the bank to then lend it to fossil fuel companies” says Richard Brooks, CFO of Stand.earth, an environmental and climate justice advocacy group.
The new report finds that the 11 largest U.S. banks on average lend 19.4 percent of their portfolios to carbon-intensive industries. To be perfectly clear, oil, gas and coal companies would not be able to continue operating without these loans.
According to Brooks, however, the big banks underfinance the green economy and invest in “bad” energy.
Smaller banks are less likely to lend to the industries already mentioned above. A credit union operates at a much more local level, so it’s much less likely to lend money to, say, a new oil pipeline. “Big companies turn to big banks for financing. They’re looking for hundreds of millions of dollars, sometimes billions of dollars in loans, and a credit union mightn’t provide that.”
Although the new report did not analyze in detail the tens of thousands of banks operating in the world, the authors of the document agree that there are financial institutions that consciously do not invest in industries that dramatically pollute the environment.
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