How I Divested My Personal Finances From Fossil Fuels
Read more about Kiku's personal journey in divesting her finances from banks that invest in the fossil fuel industry.
Recently, a study by the non-governmental organisation Reclaim Finance revealed that banks aligned with The Glasgow Financial Alliance for Net Zero (GFANZ) initiative have continued to funnel hundreds of billions of dollars into oil, gas, and coal.
According to The Guardian, “… at least 56 of the biggest banks in the net-zero banking alliance grouping (NZBA) have provided $270bn to 102 fossil fuel companies for their expansion,” with $53 billion coming from Citi Group and Bank of America.
Last month, my colleague Louise penned an article about how to divest from fossil fuels and reinvest in purpose-driven alternatives.
As someone who has divested their finances from institutions that fund the fossil fuel industry, I wanted to share my experience to encourage others to take that leap into a fossil-free future.
Last year, I had the privilege of working with a client to help them reach their goal of exiting from fossil fuel banking. We quickly learned that a great deal of work would be required to achieve that goal in the current market. Despite banks’ Net Zero pledges, Big Banking still invests in oil and gas exploration, pipelines, processing, and tar sands. Only 7% of the collective energy investments go to renewables.
“Since the 2015 Paris Climate Agreement, the world's 60 largest banks have poured US$ 4.6 trillion into the fossil fuel industry.” Banking on Climate Chaos
Over the course of my 23-year career in sustainable business, I had never examined my banking choices. When I did, I found that the bank where I kept most of my funds - JP Morgan Chase - topped the list with $382.40 billion invested in fossil fuels since 2015, according to the annual report Banking on Climate Chaos published by Reclaim Finance. Not only that, but their investment increased 19% over the past year, as fossil fuel profits in 2022 reached record highs while the world dealt with natural gas shortages, Russia’s attack on Ukraine, and supply chain issues cascading from a deadly global pandemic.
At 13, I proudly opened my first savings account at Manufacturers Hanover to stash my saving from babysitting jobs, which became JP Morgan Chase through a series of mergers. I had a surprising emotional attachment to my account. Plus, the website was excellent, and there were branches everywhere, even though I couldn’t remember the last time I had entered one. My chequebook had been idle for over a decade, and the same crisp 20s remained in my wallet for months. When I looked around, I realised how much banking had changed and that several alternatives were emerging.
For help, I turned to one of the many online listings for fossil fuel-free banks (see below), which list banks that have pledged to be fossil-free and are aligned with other values such as animal welfare, community investment, and other socially responsible practices. Topping my personal choices was Amalgamated, a venerated 100-year-old bank whose mission is empowering organisations and individuals to advance positive social change. When it comes to the things I care about, they ticked all the boxes. Plus, Amalgamated is run by Pricilla Sims Brown, an inspiring woman of colour in finance who is leading with purpose. My other choice was Atmos, a much newer internet bank, which can boast that it is climate positive by investing its capital in renewable energy projects. I decided to split my funds between them.
Transitioning to Atmos was surprisingly easy and fully digital. My debit card works everywhere, including in Europe, which I just visited. As I signed up, they launched a new residential solar finance service just in time for my home solar project. Soon they will launch financing for home energy efficiency. Transferring my old IRAs to Amalgamated was a bit more involved due to strict government controls. Still, it was made easier by my asset manager, Jermaine, a delightful human who seems to work around the clock and is also a refugee from Chase.
Moving my banking feels a little like being a kid in a candy store; it’s a feeling of abundance. But I’m not naïve; I know that my meagre savings alone will not move the market, and I know that extracting our global economy from fossil fuels will affect all industries[ML1] . Removing my money from the easy short-term profits to be made from fossil fuels and putting it towards socially responsible investments was a personal choice. I am grateful that some institutions and entrepreneurs believe, as I do, that the future of a stable planet and thriving society are compatible with a thriving economy.
Looking at the broadening landscape of the fossil fuel-free banking movement, I am convinced that a tipping point is inevitable. The pressures of stakeholders like me, and the realities of climate change, mean that fossil fuel expansion will eventually become too high a risk. In December 2022, HSBC announced they would stop funding new oil and gas fields. I believe it will not be the last bank to do so.
Additional resources to find a fossil fuel-free bank: