In an era of climate crisis, where you choose to bank is no longer a neutral decision. Your current account, savings, and pension pot have the power to either fund fossil fuel expansion or accelerate the transition to a green economy.
The Power of Public Pressure
Globally, banks increased their financing for fossil fuel companies last year, with none of the world's largest institutions committing to stop funding new oil and gas fields. However, public sentiment is shifting dramatically. According to the Responsible Investment Association Australasia, 76% of people now want their banks and pension funds to commit to zero emissions by 2050, while 88% expect their deposits to be invested ethically.
Morgan Pickett, a policy analyst at Market Forces, confirms that major financial institutions are feeling this pressure. "Major banks are responding to growing public appetite by slashing funding for fossil fuels and pressuring coal and gas companies," he says. The message from customers is clear: align with climate goals or lose our business.
Navigating the Banking Landscape
Several UK banking institutions have begun changing their practices in response to consumer demand. While specific Australian examples like Commonwealth Bank and Westpac show the way forward, similar movements are gathering pace in British banking circles.
The challenge for consumers lies in cutting through what Pickett calls "bank and super fund spin." Market Forces has created comparison tools that allow you to evaluate your bank's investments against competitors. More importantly, if you decide to move your money for climate reasons, it's vital to tell your bank why – otherwise they won't know what prompted your decision.
Beyond Banking: The Pension Question
The UK's pension sector represents one of the largest pools of capital globally, making retirement savings another crucial lever for climate action. Recent analysis reveals concerning trends, with some major pension funds having more than doubled their fossil fuel investments over the past two years.
Estelle Parker, co-CEO of RIAA, emphasises that "the financial industry needs to listen closely. There's a clear market for responsible investment products, but consumers need confidence their money truly aligns with their values."
Jonathan Moylan from the Australian Conservation Foundation puts it bluntly: "The influence of the financial sector on the future liveability of the planet can't be overstated." He notes that while Australian banks have provided over $23bn to fossil fuels in the past decade, public pressure is now driving change.
The solution, according to experts, involves both individual action and collective pressure. Switching to an ethical bank sends a message, but we need to move the entire financial system, and that requires sustained people power.
