Money is the elephant in the room. We need it to purchase almost everything else on our action list. But what you may not have considered is that where you invest and borrow your finances from can have major implications for the climate. This is an action point with huge impacts.
Yes, we know that for many people, dealing with money matters is akin to visiting the dentist. Uncomfortable. Frustrating. A chore. But it’s time to confront this head-on. We can’t afford not to.
Some of the largest banks are heavy funders of organisations with poor environmental records, making them some of our biggest drivers of climate change. According to an international BankTrack March 2022 report, US$ 4.6 trillion (4,600,000,000,000) globally was funnelled into fossil fuel companies and projects by the world’s largest 60 private sector banks between 2016 and 2021.
A shift is coming (very slowly), but overwhelmingly banks still exist for the purpose of maintaining and growing finance at the expense of our planet and people.
What can you do?
Take a good look at your bank. In Aotearoa NZ, this site can help you compare banks’ fossil fuel lending. Then either move your banking to a climate-friendlier bank or, if you’re locked in for now with a ‘dirty’ bank, question them about their climate intentions. (Watch out for ‘greenwashed’ answers.)
Cryptocurrency has a serious carbon problem. Transactions are validated through vast numbers of supercomputer ‘miners’ in a highly energy-intensive process, usually in countries powered by fossil fuels.
In 2018, a Guardian newspaper article calculated the annual emissions of Bitcoin alone as one megaton of carbon – equal to one million people taking transatlantic flights. By 2021, Bitcoin’s emissions jumped to 37 megatons.
This means investment in NFTs (Non-Fungible Tokens) bears a similar climate load; each transaction produces as much carbon as a one-hour flight.
‘Greener’ cryptocurrencies are on their way but are in their infancy.
Pensions, Kiwisaver and Superannuation
If you’re in a position to move your superannuation, this is one of the easiest and most impactful personal fixes you can make. In fact, a 2015 Swedish study found that moving your money to sustainable investments can have 27 times more impact on your carbon footprint than all your other lifestyle choices combined.
It’s getting easier to assess and then move funds. In Aotearoa New Zealand, the not-for-profit Mindful Money provides tools to help you assess your current investments and evaluate alternatives. Or you may be locked into a fund with your employer – in that case, engage with your fund (and your employer’s pension decision-maker), to impress upon them the need for change.
Last But Not Least
It’s time to change the way we use the word ‘investing’.
We’re used to investing our money to safeguard our own future. We even buy insurance ‘just in case’ our house burns down, an investment in our peace of mind. We don’t think of environmental donations the same way – but we should.
Here at Terra Nova, we’d like to see a shift in perspective – one that sees us talk about investing in environmental charities and not-for-profits. Apart from the really big organisations (you know who they are), they lack the budget to do mass appeals, and there is no public funding for the work they (we) do. Yet the payback is huge – restoring health to Earth.
It’s vitally important that we continue to give to our grassroots community charities, but if we also invested the cost of a weekly coffee into environmental causes, we could really create change for the better.
Every time you make a contribution to an environmental charity, you’re investing in the future of our planet.