a checking account is (probably) your largest source of CO2 emissions
“We are our choices.”
A choice made for you is not a choice made with you.
A woman stood at the corner of a busy street—waiting to cross. While cars continued through the intersection, the “walk” sign appeared. The choice to walk even with cars incoming—is it decided by her or the sign?
origins and history of green banks
Green banks go way back. In 1974 Germany, the first social-ecological bank—in the world (or just Germany… they like to claim first of the world)—opened its doors funding schools, farms, and communal projects. They would later venture into renewable energy after the Chernobyl disaster.
Throughout the years following, different species of “green banks” populated more and more countries. The Netherlands, UK, Chicago, Italy, Canada, etc. The idea of depositing money into banks who do good for the Earth and Society became popular. As the first community development bank, and largest Community Development Financial Institution at its peak, Shorebank gave life to this concept in the States. The housing crisis of ‘08 eventually led to its fall in ‘10, but its roots live on through today’s Beneficial State Bank, who took over its Pacific Northwest subsidiary.
But the mechanics of a bank, and specifically how they use our money, still eludes people today.
the jist
If the largest U.S. banks & asset managers were a country, they'd be the 3rd-largest carbon emitter—behind only China and the U.S. Let that sink in. We’re not talking about oil companies or other Big Energy players; these are banks financing pollution with our money. When money gets deposited into traditional banks, it gets loaned out (to mortgages, commercial loans, corporate underwriting, etc.) or invested (into local solar projects, new oil pipelines, weapons manufacturers, etc.).
As of March 2020, the reserve requirement (the fraction of deposits a bank must keep on-hand) is set, by the Federal Reserve, at zero. Big Banks like JPMorgan, Bank of America, and Wells Fargo use this loose requirement to deploy every dollar into their loan and underwriting book—which is what gives your money a carbon footprint.
You don’t need to bank this way. A 2023 study by Project Drawdown found moving $10,000—out of Bank of America, Citigroup, JPMorgan Chase, or Wells Fargo—was equivalent to preserving 2.18 acres of U.S. forests, on average. You can bank that way.
how banks use our money
Your money doesn't sit in a drawer with your name on it. The second it lands in a checking account, the bank puts it to work—lending it, underwriting with it, betting on it. Most of us have the perception that banks keep our money on hand, but that would be too logical. Instead, they are using our deposits and decide what to do with it.
A megabank's lending book is so heavy on oil, gas, and pipelines that one analysis found if those banks were a country, they'd outrank almost every actual country on Earth for emissions. Your $5,000 sitting in "savings" is a tiny investor in whatever that bank funds—whether you'd have chosen it or not.
Green banks just make a different choice with the same dollar. Renewable energy. Affordable housing. Local farms. The mechanics are identical; the destination isn't. How do “green banks” do this? To be honest, there isn’t a huge difference in set up. They are still regular financial institutions, they just pledge to use our deposit for things more beneficial to the environment and society.
types of banking institutions
You'll see "bank," "credit union," "CDFI," and "mutual bank" used interchangeably but they have very different wiring.
A bank answers to shareholders. Credit unions and mutual banks are owned by its members—you become a part-owner when you join and the profits come back to you as better rates and lower fees. That structure is half the reason values-based banking tends to live in credit unions and mutuals: no outside shareholders demanding where to lend our deposits with the main goal of increasing shareholder value. You’ll also see Community Development Financial Institutions (CDFI). This is a federal designation layered on top, meaning the institution's mission is serving underserved communities.
One quick note about “neobanks.” A neobank is an app—not a bank. The app may house a bank, but there’s a good amount of due diligence to be done if banking like this.
On a similar “due diligence” note, insurance is an important distinction. Ever since the Great Depression, people have known about the FDIC—the Federal Deposit Insurance Corporation. This type of insurance federally backs and guarantees your money is safe when held in banks ($250,000 per depositor, per institution, per ownership category). What if you bank with a credit union? You’re still insured! The only difference: you’re insured under the National Credit Union Administration (NCUA). It’s the same protection just under different agencies.
green institutions and their labels
Some banks are built around a single mission. Clean Energy Credit Union lends only to clean energy—solar, heat pumps, EVs. Walden Mutual points your deposits at sustainable farms and food. Climate First Bank exists, on paper, to fight climate change. Others—Beneficial State, Self-Help, Amalgamated—lean toward community: affordable housing, small business, economic justice.
So "green" isn't one thing. Care about land and food? There's a bank for that. Care about energy? Different bank. Care about your dollars staying in your community? Different again.
Walden Mutual Bank—Regenerative farming and food
Channels deposits into local sustainable farms and food businesses — agrovoltaic solar grazing, organic producers, food hubs, regional food-system change.
Climate First Bank—Clean energy and climate
Built explicitly to fight climate change — solar loans (no dealer fees), EV charging, efficiency financing via OneEthos. The only U.S. bank chartered specifically for the climate mission.
Clean Energy Credit Union—Renewables-only lending
Lends 100% to clean-energy projects — rooftop solar, geothermal, heat pumps, EVs, e-bikes. Rate discounts for low-income and minority borrowers.
Amalgamated Bank—Labor, social causes and climate
Rooted in the labor movement; finances affordable housing, residential solar, and progressive nonprofits/campaigns. First U.S. bank to commit to Paris-aligned lending; net-zero 2045.
Beneficial State Bank—Economic justice and community
Focused on economic justice and community wealth—affordable housing, small business, residential solar. Hard exclusions on fossil fuels, fracking, private prisons, and weapons.
Self-Help Credit Union—Community Development Financial Institution
One of the largest U.S. CDFIs, focused on homeownership and small business lending, with fossil-free on top.
The labels help, but only if you know what they mean. Fossil Free Certified is the cleanest signal—it means the bank won't finance fossil fuels. B Corp tells you the company is run well across workers, community, and environment—but, it doesn't ban fossil financing. And there are… a lot of these labels. Below are just a few of the more recognizable ones.
Fossil Free Certified
The institution pledges not to finance fossil fuel companies or projects, now or in future.
Global Alliance for Banking on Values (GABV)
A membership network of values-based banks. Joining requires being a regulated bank with CEO-level commitment and transparent reporting.
B Corp
Scores governance, workers, community, customers, and environment.
Community Development Financial Institution (CDFI)
Certifies the institution's loans serve low-income and underserved communities.
how to switch banks
If at this point you’re convince to make the switch from a megabank to a green bank, below is a short list of steps. Believe it or not, switching banks actually isn’t too cumbersome.
Research and select the new institution (FDIC/NCUA insured).
Open the new account first. Park ~2 months of expenses there to fund the transition. Ask about a Switch Kit / ClickSWITCH.
Inventory automatic deposits/withdrawals from 3–12 months of statements—payroll, bills, subscriptions, annual payments, linked Venmo/PayPal/Zelle.
Redirectdirect deposits (employer, Social Security, pension); allow 1–2 cycles.
Redirect automatic payments at each merchant; cancel the old bank's scheduled bill-pay.
Keep both accounts open with a cushion for ~2 months to catch infrequent/annual charges and avoid overdrafts.
Transfer remaining funds electronically.
Close the old account formally — get written confirmation. Watch for early-closure fees (~$25 within 90–180 days). Shred old checks/cards.
Tell the bank why—and report your switch to Third Act, BankFWD, or Bank.Green so it counts toward a campaign.
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