Hiking. Skiing. Cycling. We get it: When you’re out enjoying the natural world, banking is the last thing on your mind. But think again: What your bank does with your money makes a big difference in the natural world.
Just like people, banks choose what to do with money they hold. The money you deposit doesn’t just sit in a vault. Your bank sends it back out into the world to finance things. What your bank chooses to finance with your money matters for Earth’s climate future. Here’s how.
- What Happens When You Put Money in the Bank
Say you deposit $100. Only about $10 might actually stay in your bank. The other $90 gets sent back out into the world as your bank makes loans to businesses.
So where do banks put that other $90? Or in other words: What is your bank doing with your money? It could be making a small business loan, or doing something…different. It depends who you bank with.
- Status Quo Banking
You might not support fracking, arctic drilling, tar sands extraction, or deforestation. But your bank might—with your money. In 2019 alone, banks worldwide poured more than $735.6 billion in financing into fossil fuel companies. International financial institutions also provided $25.6 billion in financing to palm oil and other sectors that pose a high risk of deforestation in Southeast Asia.
Arctic Oil & Gas: $7.4 billion
Tar Sands: $24 billion
Fracking: $86.3 billion
Coal Mining: $13.1 billion
Coal Power: $32.5 billion
Deforestation: $25.6 billion
III. Positive Banking
At Bank of the West, we think banking can be a force for good. We’ve taken action to help drive positive change.
What we don’t finance is just as important as what we do finance. We’ve prohibited financing of:
*Oil and gas from shale and tar sands
And, we’ve restricted financing of:
*Coal-fired power generation
*Palm oil production
- Financing a Sustainable Future
Bank of the West wants to help create a future that’s sustainable for all. That’s why in 2018 we began to channel $1 billion in financing toward clean, efficient, and renewable energy over a five-year period. We also provide loans that help people transition to electric vehicles. By 2040, renewable energy is projected to comprise the majority of new power generating capacity in the United States. This includes:
21% of new power capacity by 2040
37% of new power capacity by 2040
57% of all passenger vehicle sales to be electric by 2040
3% of new power capacity by 2040
V. So What Can You Do?
Your money talks, whether you’re buying groceries or making a bank deposit. So ask the question: What on Earth does my bank finance with my money?
For more about Bank of the West’s financing policies, visit bankofthewest.com/change.
Fossil Fuel Financing: Rainforest Action Network Banking on Climate Change 2020 Report
Deforestation Financing: Forests & Finance
Renewable Energy: International Energy Agency 2019 World Energy Outlook
Electric Vehicles: Bloomberg 2019 Electric Vehicles Outlook