The past 10 years were our planet’s hottest decade ever recorded. Our winters now see shorter snow seasons, bleached coral reefs are too familiar, and enormous wildfires force us to literally watch the world burn—all driven or exacerbated by man-made climate change. The Verge called it the “decade climate change slapped us in the face.”
We entered 2020 facing a climate emergency. And the COVID-19 pandemic hasn’t changed that. Before the massive wildfires in the West, much was made of bluer skies and reduced use of fossil fuels. Yes, those have been positives, but as we adapt to life with COVID-19, it would be catastrophic to return to our pre-2020 way of life.
As we restart the global economy, we have an opportunity: This can be the decade we tackle the climate crisis.
Whether it will be is up to us. We have the power together to solve the collective problem of climate change — just as we galvanized globally to combat the coronavirus. What we’ve learned in these past few months is the importance of action. Society’s transition from fossil fuels to sustainable energy will require action by individuals, public officials and the private sector, which means all industries, including banking.
From Bank Vaults to Snow Banks
The effects of climate change were top of mind early this year when I traveled to Denver to spend time with many of the leading companies confronting the climate emergency. Companies like Jones Snowboards, Smartwool, and Patagonia—who, along with their customers, see firsthand the impact of climate change on our increasingly endangered winters. Their advocacy and action are critical.
But we at Bank of the West know banking also has a central role to play in solving global warming. The relationship between banking and climate change was perhaps most eloquently summarized by the environmentalist Bill McKibben when he wrote for The New Yorker last year that “money is the fuel on which the fire of global warming burns.”
In short, money you deposit doesn’t simply sit in a vault. Banks actually send most of your money out into the world to finance new business. That new business – financed via your deposits—could be an innovative solar startup. Or it could be an Arctic drilling company. The answer depends on who you bank with.
$14 trillion: that’s the scale of banks’ power to impact climate change—for better or worse.
Where You Put Your Money Matters
Now, consider the fact that U.S. banks currently have more than $14 trillion on deposit. That’s the scale of banks’ power to impact climate change—for better or worse.
And that’s the reason we at Bank of the West have specific policies that restrict or prohibit financing of certain industries harmful to the planet. And we make our policies publicly available on our website. As part of BNP Paribas, we implemented these policies back in 2017 because we believe what banks don’t finance is just as important as what they do finance.
Which is why we’ve restricted our financing of fossil fuels, big tobacco, palm oil production, and other activities harmful to the environment.
The Decade of Change and Action
As 2020 progresses, we’re glad other financial institutions are also talking about the role of money and finance in both fueling climate change and fueling solutions in the decade ahead. We know from the past decade, that the time for talk and loose commitments is behind us. We’ve entered an era that requires action. It’s the right thing to do from both a moral and a business perspective.
At Bank of the West, the effort doesn’t end with restrictions on financing in certain sectors. We’re also working with businesses and individuals to find solutions. We are channeling $1 billion toward sustainable energy. And, in December, Bank of the West became the first U.S. bank to team up with the Swedish fintech company Doconomy to empower our customers to better measure their carbon footprint. The card-connected digital tool lets users review the carbon emission of every transaction, helping them to make informed decisions about their shopping and sustainability.
Coupled with the forward-thinking actions of our parent company, ours is the strongest environmental stance of any major U.S. bank, earning recognition from organizations including Protect Our Winters and 1% for the Planet and Fast Company magazine. We don’t pretend to have all the answers, but instead believe coalitions are essential if we as a society are going to reverse climate change. While they might not seem connected at first blush, the outdoor industry and Bank of the West are very much aligned when it comes to working towards solving our climate crisis.