This article is generously sponsored by Ando Money. As always, EcoCult only works with well-vetted brands doing good work. Support our editorial by supporting them!
The banking industry trades on the trust of its customers. Trust that their money will be held securely, but also trust that it will be invested wisely.
And yet, most banks do not tell their personal banking clients where their deposits have been directed. An open dialogue of accountability between banks and their customers has yet to begin.
Fossil fuel companies are all too often the beneficiaries of customer funds. In the five years between 2015 and 2020, some of the world’s biggest banks invested more than $2.7 trillion of their customers’ money into the fossil fuel sector.
It’s not uncommon to find environmental, social and governance (ESG) internal reports that tell a different story: that banks can and do choose to partner with “green” and socially responsible companies. Some of the world’s largest and oldest banking establishments have signed up to the UN-convened, industry-led Net Zero Banking Alliance, representing 38% of global banking assets. This alliance requires its members to publish annual emissions and to commit to targets for transitioning investment portfolios away from high-carbon business models towards low- or no-carbon strategies.
But these are soft, long-term targets and 24 banks have funded new gas and oil field production since joining the alliance. HSBC, one of the largest banks in the world, recently suspended its head of responsible investing at its asset management unit over comments he made questioning the urgency of the climate change crisis.
The lack of consistent scrutiny in the banking sector has also been exploited by criminals and other bad actors for political and corporate ill gain. In 2021, the Department of Justice in the US issued a $130m fine to Deutsche Bank for charges of global bribery violations. This problem has recently been highlighted again by the war between Ukraine and Russia, renewing pressure on the UK government to crack down on the chains of ‘dirty money’ flowing between shell companies, banks and property assets, particularly in London.
It is time for change. We now live in an age where consumers demand to know more, for example, about supply chains and sourcing in the fashion and food industries, so we can make better decisions with our money through purchasing decisions. The banking industry will soon need to adapt for the 21st-century consumer, and be more open about its investments.
American rock climber and environmental advocate Alex Honnold is an Ando Money customer
A Conscious Banking Option
Its customer deposits are exclusively put towards green initiatives—from solar panels on churches and veterinary clinics to green fuel systems for new housing projects. Customers can also see at a glance, through its dedicated app’s Impact Center, how their investments are distributed across sectors such as solar energy, wind energy and hydro power. This creates an unparalleled ability for a customer to ‘follow the money’ and gain meaningful insight into how their capital is being used. Some 70,000 customers have already signed up to Ando Money and access this feature; more are joining every month.
Ando Money can support a range of projects, small to large, by partnering with local community banks and credit unions, with every investment hand-picked by the Ando Money team against its stringent green criteria.
JP McNeill, Ando Money’s founder and CEO, says: ‘Thus far, we’ve felt that Ando Money can have the most significant impact by focusing our investments (through funded loans) in renewable energy, specifically solar panel installation. By helping companies that can help many, many families minimize their reliance on fossil fuels, we’ve enabled our customers’ money (over $28 million to date) to work as hard as possible.’
His expansion plans for Ando Money into other areas of business will widen the impact of its customers’ finances. ‘We plan to expand our investments in other sectors, like green building and regenerative agriculture, later this year.’
It’s all too often the case that banking groups make boasts and claims that they desire change for good. By enabling customers to support alternatives to fossil fuels, Ando Money helps consumers go beyond shopping, by investing in the fight against climate change.
Here is something rarer: a banking service that is already taking action. Consider taking action too, by choosing a bank that cares about our collective future.