Climate-friendly banks are financial institutions that employ public and private capital to support sustainable technologies and climate-forward initiatives, and commit to not investing in the fossil fuel industry. This week, we spoke with Charley Cummings, the CEO of a climate-forward bank called Walden Mutual, about how greener banks are pushing for a more sustainable future. For a transcript, please visit climatebreak.org. For a transcript please visit climatebreak.org/climate-friendly-banking-with-charley-cummings/
Green banks “provide financing and technical assistance for clean energy and climate solutions” while driving “economic, health, and environmental benefits for communities across the country” (US Green Bank 50). They attempt to spend, save, and invest people’s money conscientiously so they “can grow [their] money while making the world a better place” (GreenFi).
The fossil fuel industry is the primary driver of our climate crisis, creating an imperative to implement reductions of greenhouse gas as soon as possible to minimize the potential for catastrophic impacts. Unfortunately, traditional banks have exacerbated this problem; specifically, they have “financed fossil fuels by $7.9 trillion dollars since the Paris Agreement,” enabling the building of new oil and gas pipelines, large-scale equipment purchases, and more oil and gas explorations to expand their businesses (Rainforest Action Network).
Green banks pledge to never fund projects involving fossil fuels. Many also donate a percentage of the monthly amount that customers pay to “non-profits that support climate action” while providing transparency about the carbon footprints of their funded businesses (GreenFi). Some “optimistic studies even estimate that [this] divestment [of resources]… can lead to an effective reduction in carbon footprint of up to 7%” (Mieux Donner).
However, critics argue that the impact of divestment is not equal to the carbon impact of the investment: “under the current system, divested funds can be quickly replaced by other investors, which limits the direct effect on the behaviour of companies and their CO2 emissions” (Mieux Donner). Companies can also adjust their financial strategies to offset the impact of divestment, which limits its effect on their emissions. Specifically, while green banking is well-intentioned, staying with a conventional bank may allow customers to save more money, which they could then donate to high-impact environmental nonprofits.
Charley Cummings, the CEO of a climate-friendly bank known as Walden Mutual, emphasizes how the largest funders of fossil fuel companies are banks in the United States. He encourages listeners to switch to greener banks that divest their funds towards sustainability while remaining as reliable as traditional banks.
Charley Cummings is the CEO of Walden Mutual Bank, which solely invests their holdings in local sustainable companies.
For a transcript, please visit climatebreak.org. For a transcript please visit climatebreak.org/climate-friendly-banking-with-charley-cummings/
ETHAN ELKIND: I’m Ethan Elkind, and you’re listening to Climate Break — climate solutions in a hurry. Today’s proposal: putting your savings in banks that finance climate-smart businesses instead of fossil fuels. We spoke to Charley Cummings, CEO of Walden Mutual, a climate-friendly bank.
CHARLEY CUMMINGS: The single largest funders of fossil fuel development around the world are also the three largest deposit taking banks in this country. So that's your money, and you have a choice of what it does.
ETHAN ELKIND: Like other climate-friendly banks, Walden Mutual instead invests in businesses that reduce carbon emissions.
CHARLEY CUMMINGS: We now lend to food, farm, waste, energy, and sustainable businesses more broadly, and that is funded by depositors like you and I, as well as businesses that wanna put their money in a place that has a particular set of impacts associated with it.
CHARLEY CUMMINGS: A bank allows anybody to participate in trying to create more sustainable, vibrant, and resilient communities.
ETHAN ELKIND: Cummings says that even though these greener banks aren’t investing in fossil fuels, they still have the same reliability and competitive rates as traditional banks that lack sustainability screens.
CHARLEY CUMMINGS: You shouldn't have to feel like you're making any sacrifices. So we're an FDIC insured chartered Bank, so all your deposits are insured for each individual, uh, up to $250,000, just like any other bank. We're very competitive with the highest yielding digital deposit outcome opportunities out there, and your dollars are having this really impactful influence on the world .
ETHAN ELKIND: To learn more about climate-friendly banks like Walden Mutual, visit climatebreak.org.