Means&Matters
Stories of Money and sustainability

What Banks Do With Your Money and Why It Matters – Text

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Aug 24th 2020

By Sam Laird Senior Content Writer Bank of the West

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.

 

  1. 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.

  2. 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

    Sources: Fossil Fuel Financing: Rainforest Action Network Banking on Climate

    Change 2020 Report; Deforestation Financing: forestsandfinance.org

  3. Positive Banking

    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, clean energy is projected to play a bigger role in our world – from electric cars to solar power. Renewable energy is projected to comprise the majority of new power generating capacity in the United States. This includes:

    3% HYDROELECTRIC

    21% WIND POWER

    57% ELECTRIC VEHICLES

    37% SOLAR

    Sources: Electric Vehicles: Bloomberg 2019 Electric Vehicle Outlook; Renewable

    Energy Capacity: International Energy Agency 2019 World Energy Outlook

  4. FINANCING A SUSTAINABLE FUTURE

    At Bank of the West, we know 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:

    ARCTIC DRILLING

    BIG TOBACCO

    SHALE AND TAR SANDS

    COAL POWER

    WOOD PULP

    PALM OIL PRODUCTION

  5. 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.

Author image

Sam Laird Senior Content Writer Bank of the West

Sam joined Bank of the West in 2019 after more than 10 years in journalism. He’s also worked as a teacher, a grant writer, and a janitor, and prefers to spend his free time in nature.

Footnotes

  1. Fossil Fuel Financing: Rainforest Action Network Banking on Climate Change 2020 Report – ran.org/bankingonclimatechange2020
  2. Deforestation Financing: Forests & Finance – www.forestsandfinance.org
  3. Electric Vehicle Outlook: Bloomberg 2019 Electric Vehicles Outlook – about.bnef.com/electric-vehicle-outlook
  4. Renewable Energy Capacity by 2040: International Energy Agency 2019 World Energy Outlook – iea.org/data-and-statistics/charts/reneables-share-in-c pacity-additions-by-region-in-the-stated-policies-and-sustainable-development-scenarios-2019-204

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