Sustainable finance

Divesting from fossil fuels basically means pulling our money out of oil and gas. You can read the full article to learn more.

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Takeaways from the article "Money is the Oxygen on Which the Fire of Global Warming Burns":

1. We literally don't have enough money.
   A study found that warming the planet by 3 degrees celsius before 2100 (which we're on track for) would do 551 TRILLION $ in damage, which is more money than currently exists on the planet."
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2. Divestment pressure works.
   "Funds worth more than eleven trillion dollars have divested some or all of their fossil-fuel holdings. And it has been effective: when Peabody Energy, the largest American coal company, filed for bankruptcy, in 2016, it cited divestment as one of the pressures weighing on its business." Say yes to peer pressure 😉
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3. Divesting from fossil fuels will not break the world.
   Big Oil likes to tell us that if we divest, our whole economy will come crashing down, but that may not be the case. Let's look at Chase — "Fossil-fuel financing accounts for only about seven per cent of Chase’s lending and underwriting". If we divested, Chase would lend to solar/wind/other renewable companies and be just fine. But oil and gas wouldn't. Hee hee. 😈
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4. Fossil fuel investing is destructive and unprofitable.
   In 2019, BlackRock, an asset management firm, was the world's largest investor in coal companies and companies driving deforestation. ANDD BlackRock investors lost 90 BILLION $ over the last decade "by staying heavily investing in fossil fuels." Suckers lol

We can't wake up tomorrow and stop using fossil fuels entirely, but we CAN wake up and divest!

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The New Yorker article covers banking, asset management, and insurance in depth, and shows how handling our money responsibly could be the fastest path to a cleaner and safer world.

It wasn't until last year that I gave a second thought to what happened to my money after I put it in the bank. So that's what we're visiting in this LISTEN module — we're going to walk through a one-minute overview on what banks do with your money followed by a two-minute clip on the biggest banking bad boys. (Spoiler: I have a credit card with one of these 😿)

In our READ module last week, we talked about the importance of divesting etc etc etc, but I want us all to visually understand that it's OUR money — our hard-earned cash — financing climate change.

Today, we'll get a refresher on how this works through two very short videos (~1 min each).

Takeaways:

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• Your bank is paying you. When you deposit your money in a bank, it goes through a magical wormhole and comes back to you with interest.
  
• Your bank is spending your $. The magical wormhole is actually the bank lending YOUR money to other people/businesses. They charge those other people/business a high interest rate, give you your money back at a lower interest rate, and pocket the difference.

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Takeaways:

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• Since signing the Paris agreement in 2015 (yes, the one that resolves to REDUCE climate change), big banks have paid almost 3 trillion to expand fossil fuel projects.
  
• This $2.7 trillion, to be exact, could have been spent on installing salar panels on 215+ million homes or 580,000 wind turbines, enough to power every home in the US! $2.7 trillion would take us over halfway to a completely renewable energy grid.
  
• JP Morgan, Wells Fargo, Citibank, and Bank of America are some of the biggest villains, financing fossil fuels while making public climate action commitments. Chase (where I have my credit card o god) has pumped 36% more into fossil fuels than its nearest competitor.

There's a lot we can do — closing our accounts with these banks and opening climate-friendly ones, rolling over our retirement funds into clean energy funds, and more — next module, we'll take action.

You can learn more about your own bank in RAN's Banking on Climate Chaos report — it shows what nefarious lending banks from all over the world are up to.

Sustainable finance is one of the more optimistic topics under the umbrella of climate change, in my opinion, because there's a clear path to action.

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So, without further ado, here's four things you can do:

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1. Find out: how does your bank score? Chase, where I have a credit card, is THE WORST. Major major yikes. They've done $317B in fossil fuel financing since the Paris agreement (you know, the agreement that says 'we agree to stop F-ing up the Earth').
   
   
2. Sign Bank Green's pledge to not fund fossil fuels. Public statements are powerful, so show your support in 15 seconds.
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3. Find a values-aligned bank. I used Mighty Deposits last year to open a new savings account with NCB Co-op, which supports housing (instead of fossil fuels!). Here's their list of environmentally-friendly banks.
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4. Make your retirement fund fight climate change. Make an account with Carbon Collective — it doesn't make sense for your own retirement money to fuel climate destruction, does it? Imagine what your grandkids would say.

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The first two actions are short and sweet, and the last two will only be an hour-ish project, and these will go a LONG way. Let's invest in the future we want to live in.

Before we go any further, it's time for you to pledge your commitment. It takes less than 30 seconds to pledge and we can bother you about it in a friendly way, so we can hold each other accountable. Pledge here!

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🎯 Action step 4 of 4: REFLECT — what can you commit to? What fresh perspectives can we look at?

This REFLECT is about banking disparities in Chicago, USA. It's just one of maaany examples of financial institutions actively working to exclude people. Another example worth noting is how women worldwide are excluded from financial systems.

Sustainable finance isn't just about emitting less CO2. It's about building an equitable world.

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It's important to highlight that banks do a lotttt of shady stuff with our hard-earned cash. In most countries including the USA, you need the bank to do anything, like buy a house.

According to this Home Mortgage Lending Inequalities article on banking disparities:

• Loans for housing purchases are much harder to get in minority neighborhoods. "68.1% of dollars loaned for housing purchases went to majority-white neighborhoods, while just 8.1% went to majority-black neighborhoods and 8.7% went to majority-Latino neighborhoods."
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• The culprits are the same. JP Morgan Chase, as we learned earlier this month, is one of the biggest villains investing in the climate crisis. In Chicago, "for every dollar the bank loaned in white neighborhoods, it invested just 2.4 cents in the city’s black communities". At least they're consistent lol??
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• Race, not economic status. Even middle-class Black Americans can't get the same loans — simply because a home is in a historically Black neighborhood, it can be appraised (valued by lenders) for a much lower amount.
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Discrimination in lending is structural, whether we're talking about gender, race, or anything else. But we can fix our financial systems! All injustices are interrelated, and we all have a role to play.

‍🏁 Checkpoint: This is the end of action step 4 of 4: REFLECT.

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Check out our membership community for more resources like free weekly events with social justice experts, sustainable product discounts, pre-written email templates, a social impact job board, and in-person hangouts with new friends. Thanks for taking action with Soapbox Project!