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New report: How personal banking impacts the climate

Project Drawdown reveals how where a person keeps their money can undermine or accelerate individual climate action

by Drawdown Labs
Various bills of US currency

Press Contacts

If you are a journalist and would like to republish Project Drawdown content, please contact press@drawdown.org.

Key Report Takeaways: 

  • For the average person in the U.S., personal banking may constitute a large source of indirect greenhouse gas emissions 
  • Every US$1,000 a person has in savings is roughly equivalent to the direct emissions generated by flying from New York to Seattle every year 
  • Eleven of the largest U.S.-based banks lend around 19.4% on average – and as high as 30% – of their portfolios to carbon-intensive industries 
  • Moving from a carbon-intensive bank to a climate-responsible bank could reduce the personal banking emissions of an average U.S.-based person by 76%
  • Switching banks can be a powerful, relatively easy, and affordable climate action

In a report published this week, Project Drawdown, in collaboration with Topo Finance, reveals how personal banking decisions in the United States can undermine or accelerate individual climate action. By comparing the estimated financed emissions of a sample of carbon-intensive banks and climate-responsible banks, the report finds that where a person stores their money is one of the most important consumer decisions they can make related to their greenhouse gas emissions. 

“Around 95% of U.S.-based adults have money in a checking or savings account which banks then use to finance or invest across the economy,” says Jamie Alexander, who co-authored the report and is the director of Drawdown Labs, Project Drawdown’s private sector testing ground for scaling climate solutions. “It may come as a surprise to many of those people that, depending on where they bank, as much as 30% of their hard-earned money could be funding the carbon-intensive industries most responsible for climate change.” 

Using newly available data, the report estimates that across the 11 largest U.S.-based banks, around 19.4% on average and as high as 30% of their portfolios – which includes money from personal banking – were lent to carbon-intensive sectors in 2022, including energy production, utilities, mining, and large-scale manufacturing.

According to the report, this means that every US$1,000 a person has in savings is roughly equivalent to the direct emissions generated by flying from New York to Seattle every year. By switching to a climate-responsible bank, however, the annual banking emissions for the average U.S.-based adult could be reduced by 76%.

It may come as a surprise to many that as much as 30% of their hard-earned money could be funding carbon-intensive industries.

Jamie Alexander

Based on this reduction and the median amount that a person living in the United States has in a transactional account (US$8,000), the report shows that moving from a carbon-intensive bank to a climate-responsible bank can have a bigger annual climate impact than adopting an all-vegan diet. 

“Around the world, we are becoming increasingly adept at applying a climate lens to how we spend our money,” says Paul Moinester, executive director of Topo Finance. "What our research shows is that applying this same climate lens to where we deposit our money can be as impactful as how we spend it. This impact is rooted in the power of responsible banking as a systemic climate solution – a solution that can not only reduce emissions at scale but also help shift trillions of dollars away from the industries fueling the climate crisis and toward those creating a more just, sustainable world." 

In addition to analyzing the relationship between climate change and personal banking, the report provides practical steps for consumers looking to maximize their positive climate impact, including how to assess their banking footprint, engage with their bank, move their money, and spread awareness.

“Many of us already appreciate how we can incorporate climate solutions into our daily choices by changing how we eat, travel, power our lives, and more,” Alexander says. “But it’s critical that we also recognize our ability to intervene in the much bigger systems in which we are embedded, with the potential to have a larger and more catalytic impact.”

To learn more about the report, view it here, or to get in touch with the authors for media requests please reach out at press@drawdown.org.

About Project Drawdown
Project Drawdown is the world’s leading resource for climate solutions. By advancing science-based climate solutions, fostering bold climate leadership, and promoting new narratives and voices, the 501(c)(3) nonprofit, nonpartisan organization is helping the world stop climate change as quickly, safely, and equitably as possible.

About Topo Finance
Topo Finance is dedicated to transforming the financial sector into a force for creating a more just, equitable, and regenerative world. We are actualizing this future by building foundational data, tools, strategies, and solutions that enable all consumers – companies, organizations, and individuals – to leverage their banking and investing as a vehicle for climate and social progress.

Press Contacts

If you are a journalist and would like to republish Project Drawdown content, please contact press@drawdown.org.

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