Quite often, we’re confused about where and how we should invest our money. If nothing comes to mind, we tend to leave our money unattended in our savings bank account. The general belief is that there’s no risk of losing the capital amount, nor investing in stocks for fossil fuel and oil companies.

But what is your bank doing with your money? Surely, they’re not letting it sit idle. You wouldn’t imagine that your money is being used to fund mining projects, oil rigs to coal mines but that’s exactly what’s happening. When you check your monthly balance, the money exists, but only digitally. In reality, banks invest or loan out your savings to earn higher interests. And, some of that money trickles its way down to fossil fuel, oil and gas, tanneries – sectors that may not align with your values.

According to this source, JP Morgan Chase, one of the biggest banks in America and consequently, around the world has been one of the largest financiers of fossil fuels providing over 310 billion dollars to extract oil, gas and coal.  In India, the State Bank of India and HDFC are two of the banks that have a global presence for funding fossil fuels. Pro Tip: Banktrack is a perfect website for you to easily discover policies and decisions being taken by your current bank towards or against our society and planet! State Bank of India uses public funds to infuse money in corporations like Adani, which invest in projects that cause irrevocable environmental damage. For instance, back in 2011, an Adani cargo carrying coal sank near the coast of Mumbai devastating marine life. For 5 years, Adani did nothing to clean up the mess and revive the ecosystem. According to this website, ‘The State Bank of India is considering giving Adani almost AU $1 billion for their climate-wrecking Australian coal mine.’ If the funds are sanctioned, the project could destroy ancestral land, water and culture of the Aboriginals. If the mine receives a go-ahead, over a million cubic metres of the seafloor would be dredged for a new coal terminal, threatening the habitat of endangered turtles and dolphins. Just one collision, mistake or spill would lead to an environmental catastrophe in the Great Barrier Reef.  According to Bloomberg Green, the greenhouse gas emissions associated with financial institutions’ investing, lending and underwriting activities are more than 700 times higher, on average, than their direct emissions.  So, indirectly, Indian banks are complicit in furthering corporate agenda and adversely affecting climate change. 

We also often tend to overlook the energy consumption banks require. Right from running multiple bank offices all over India, with 24/7 air-conditioned ATMs and the amount of paper used for the nuanced documentation, banks themselves can be an energy-consuming sector, further adding to overall climate change and environmental degradation. 

But, there is a ray of hope. With the increased awareness of environmental concerns, Indian banks have now started taking steps towards a more climate change conscious approach. One such instance is HDFC committing to being carbon neutral by 2032. It aims to transition into a carbon-neutral corporation by offering cheaper loans for electric vehicles, alternate energy and focusing on ESG (environmental, social and governance) projects. The bank aims to reduce its energy, emission and water consumption. 

As consumers, we need to realise there’s a link between our consumption pattern and its impact on the environment. According to this report, consumers are responsible for 60-70% of all direct and indirect emissions. We can lead the change we want!


What can we do to play our part in banking ‘green’?

If you know your bank account is funding corporations that are bad for the environment, take action. Keep the bare minimum required in that account and transfer the rest to a ‘greener bank.’ Various banks such as Kotak Mahindra have pledged to be greener by reducing their paperwork and opting for mobile banking or e-statements. IndusInd bank has launched the Green Office Project under which they’ve installed solar-powered ATMs in different cities targeting energy saving as well as reducing CO2 emissions. Yes Bank aims to include Alternate Energy and CleanTech in its portfolio.

Fridays for Future and their resources on green banking and what you can do.

Signing petitions and raising your voice can go a long way in making a difference. In the case of SBI, there are existing petitions and websites asking them to stop funding projects that harm the planet. A major success story has been the lack of private funding for Adani’s future projects because of the petitions and activists.

Keeping your money idle in your bank account is the biggest investment mistake we’re making. Not to mention, the detrimental projects we’re unintentionally funding. So, keep your emergency fund in your savings account, while parking the rest in investment instruments like stocks or green bonds etc.

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