We all use banks—for savings, credit cards, small business loans, mortgages. But a lot of the institutions available to us do some pretty dirty business when it comes to the climate crisis.
According to a recent report called Banking on Climate Chaos, the world’s 65 largest banks have committed $7.9 trillion dollars to the fossil fuel industry since 2016. The analysis—coauthored by eight nonprofits, including the Sierra Club and finance watchdog BankTrack—found JPMorgan Chase, Citigroup, and Bank of America to be the three largest financiers of fossil fuel companies. Though the flow of cash to oil and gas was slowing down as recently as 2021, banks have regressed and increased their investments by $162.5 billion from 2023 to 2024.
Just so we’re clear: This is your money they’re spending. When you get your paycheck or stash some cash in savings, it isn’t sitting there doing nothing. The banks use those funds as liquidity to issue loans and make money off interest.
The problem? You don’t really get a say in where that money goes. “Those loans shape our entire economy,” says Zak Gottlieb, director of volunteer-run sustainable banking database bank.green. “Sadly, fossil fuel companies, for larger banks, are a big recipient. It’s your deposits, essentially, that facilitate that.” He estimates that for major U.S. banks, some 20% to 30% of loans go to carbon-intensive industries like agriculture and mining, and between 5% and 10% is straight-up fossil fuel financing.
Now, this isn’t to say you’re a bad guy just for having some money in one of those banks. But it is a huge opportunity for change. “The main role of civil society is to put pressure on our financial institutions,” says Valerio Micale, Associate Director of the Climate Policy Initiative. Enter green banks, which the Organisation for Economic Co-operation and Development defines as those that invest in low-carbon and resilient infrastructure and other green sectors like water and waste management.
These eco-conscious financial institutions are becoming increasingly available to customers and investors. They’re also a key for reaching the $5 trillion annual investment the U.N. says it will take to accelerate progress in areas like renewable energy and sustainable agriculture—especially as some nations fall short of their climate goals. “This is the great overlooked climate action that you as an individual can take that will, in many cases, even if you don’t have a ton of money, still have a tangible impact,” says Gottlieb.
So how do you make the switch? Let’s get into it.
Step 1: See how your current bank is doing
No matter where your savings and investments are right now, start by investigating your own bank. While some might try to appear greener than they are by emphasizing operational changes (cough cough, going paperless), these initiatives are a “drop in the bucket” compared to the majority of their emissions, which trace back to what they invest in and underwrite, says Gottlieb.
It’s a good sign if a bank has started to measure and report on its own emissions—including direct ones, like from the energy that powers their buildings, and indirect ones, like the carbon footprint of the companies and industries they finance. They get extra credit if they have short- or long-term emissions reduction goals. You can usually find this info under “impact,” “responsibility,” or “sustainability” on the bank’s website.
Yes, diggin’ through corporate disclosures probably sounds awfully tedious, but there are resources available to make it easier. Banking on Climate Chaos has a simple tool that shows how much major banks have invested in projects that harm the environment. If your bank isn’t there, try the bank.green database, which slices firms into five categories based on how well-aligned their goals are with maintaining a livable climate (you can read about their methodology here).
Step 2: Find a new bank
Did your bank flop in Step 1? Then it’s time to start shopping around. Checking out bank.green’s search tool is probably the fastest way to zero in on a new firm. It lets you filter based on their top picks (currently Beneficial State Bank and Walden Mutual), and/or narrow your search based on what kind of account you’re looking for and what features are important to you. Some things to keep in mind: Green banks tend to be smaller, which means you may bump into those with outside ATM fees or a lack of physical branches. Some, like Spring Bank, are only available in certain states or regions.
Because financial moves aren’t as cut-and-dry as eating less meat or swearing off Amazon, it’s also a good idea to do a little extra poking around about any institutions that pique your interest. Membership in the Global Alliance for Banking on Values—which requires its members to uphold principles around social and environmental impact, resiliency, and transparency—is a major green flag. Other helpful certifications include B-Corp, 1% for the Planet, and Green America’s Green Business Network. Wanna go the extra mile? You can call ‘em up and do a mini background check of your own; we curated a list of questions to ask a few years back.
Step 3: Move your money
Actually moving your money between banks might be the most intimidating part of this process, but it doesn’t have to be. First up: Remember that you don’t have to do everything in one day. “A lot of people get overwhelmed and think this is going to be a huge headache,” Gottlieb says. “Most of the time it's not. It's a lot more straightforward than they think.”
Here’s a simple process to follow:
- Open an account. Start by making your new account and putting some money in there. How much is up to you (though many banks have a set minimum), but it’s probably a good idea to start with enough to cover 1 or 2 months of expenses.
- Change auto deposits and withdrawals. Take stock of the bills and expenses that come out of your current account on a regular basis. As slowly or as quickly as you’d like, move your direct deposits (like your paycheck) and bill payments to your new account.
- Leave some cash in the old account. This is to cover any overdraft fees that might pop up and provide a buffer just in case there’s a rogue recurring payment that slipped your mind. Keep both accounts open for about two months, just in case it takes a minute for your payments to get sorted.
Step 4: Close your bank account and explain why you’re leaving
Now it’s time to officially say “goodbye,” which may require sending in an official letter of closure or even physically going to a branch and breaking up in person. Just make sure to get a statement or confirmation of the bank account closure and keep it in your records—just in case.
This next part is clutch: There’s a dual impact to switching your bank. Not only will your hard-earned cash be going towards a better purpose than burning dead dinosaurs, but it gives you a chance to tell the big guys why, exactly, you ditched them. So write an email (or a physical letter, as recommended by green finance expert Vanessa Fajans-Turner). A few years back, we worked with her to set up a template for you to pen your own “Dear John” note.
Extra credit: Tell your friends and family
While we may talk a lot about an amazing veggie burger or how much we love our new bike, switching banks probably isn’t the type of climate action that comes up at game night or happy hour. But it should be! Moving our money around is a surefire way to tell major financial institutions that we’re serious about change. Even if you’re not rolling in dough, you probably know somebody who is, adds Gottlieb, so activating our networks of friends and family can make an even bigger wave.
