Following promises of purpose and sustainability made at recent high street bank annual general meetings, we ask, ‘Do you know how your high street bank is investing your money?’
While annual reports from the UK’s largest banks speak of ‘higher, more sustainable returns,’ ‘purpose-driven strategy’ and ‘creating positive outcomes for our stakeholders,’ it would be easy to assume they’re investing responsibly, for good.
However, figures from the Banking on Climate Chaos report reveal this is not the case.
How much do high street banks invest in fossil fuels?
According to the Banking on Climate Chaos 2024 report, the UK’s largest high street banks—including Barclays, HSBC, NatWest, and Lloyds—have collectively financed over $554 billion in fossil fuel projects since the Paris Agreement was signed in 2016. In 2023 alone, they added more than $55 billion, despite clear warnings from climate scientists that continued investment in oil, gas and coal directly undermines efforts to limit global warming.
What does this mean for the planet?
The banking industry’s finance for the fossil fuel industry is one of the reasons we are all still struggling to adequately tackle climate change.
This is despite the fact that the science is super clear: fossil fuels are the largest contributor to global climate change.
Why do high street banks contribute to the climate crisis?
Much of the fossil fuel financing comes through corporate loans, underwriting, and investments in carbon-heavy industries like aviation and mining. While banks may argue these are necessary to maintain financial returns, the long-term climate cost—and reputational risk—could be much higher.
How could high street banks help combat climate change?
Conversely, banks can choose to divest from planet-harming industries and instead finance more sustainable sectors, helping to fund the transition to a lower-carbon economy. And increasing numbers of providers have started to offer climate-friendly financial services solutions such as green mortgages or eco-loans for electric vehicles.
Banks that signed up to the Net Zero Banking Alliance committed to lending and investment strategies designed to keep global heating to within 1.5 degrees, as per the Paris Agreement signed at COP21 in 2015. However, in recent months, some banks have begun to roll back on their climate commitments.
Do people actually care what their high street bank does with their money?
Research we previously commissioned from Opinium showed that almost two-thirds (61 percent) of people believe banks have a responsibility to make a positive contribution towards climate change, yet only 42 percent feel their bank is committed to doing something about it.
The research also showed 59 percent of people want their bank to use their money in a way that is good for the environment, and 51 percent feel individuals can make a positive contribution towards climate change with how they manage their finances.
Note: All data referenced above is from the 2022 Opinium research conducted on behalf of Zero
Can we shift the flow of money away from fossil fuels?
Some of the UK’s biggest institutional investors managing £1.3 trillion in assets, like the Church of England Pensions Board, Trinity College Cambridge, and the Greater Manchester Pension Fund, have this week called on Barclays to provide a clear strategy on how it will specifically finance the sectors and technologies most needed for the clean energy transition and limiting the harshest effects of global heating.
Money currently being funneled to environmentally destructive sectors could instead be directed to climate-positive solutions like renewable energy, sustainable travel, or decarbonising homes, to tech start-ups, healthcare, UK manufacturing or other ethical businesses.
What can we do to make a difference?
Get to know your high street bank and what they are doing to fight the climate crisis, but you can look closer to home too. How could you spend more sustainably - not sure, just have a read of our article and get some top tips. With such a big challenge it’s easy to think we can’t make a difference, but every little helps and it absolutely does.
Can I switch my current account?
Since its launch in January, more than 8,000 people have decided to use their money for good and have registered with Zero.
Zero offers a sustainable alternative to banking – with a fee-free personal current account, sustainable Debit Mastercard, and app designed to help you spend more sustainably.
While we’re not (yet) a bank and therefore cannot invest in, lend to, or finance any business sectors – sustainable or not – we have made the promise never to use customers’ money on anything that’s harming the planet.
Our app is designed to help you effortlessly reduce your personal environmental impact by helping you understand your footprint, spend more sustainably, and contribute to carbon projects that are helping to make the world a more livable place – all directly from your phone.
In building Zero, we want to make money a force for the good of the planet.
Opening an account is easy. Join the movement today.