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Is your bank fueling the fossil economy without you knowing it?
Announcing our investment in a new and climate-friendly way to manage your money.
Despite recent increases, current levels of climate financing are insufficient to address the world’s transition to net zero and prepare us for the effects of global warming already baked in. On top of this funding gap, most of the world’s banks are still heavily invested in emissions-emitting industries like oil, coal, and gas. Join us as we explore the intersection of climate and neobanks and its potential to drive funding away from the fossil fuel economy.
The climate financing gap is massive. Current annual global spending towards climate adaptation and mitigation is about $632 billion, which seems like a lot, but by 2030, that needs to be up to $4.3 trillion – an increase of 590%. And if you compare it to other industries, it’s a drop in the financial bucket. Life and health insurance? That industry took in $8.45 trillion in 2019/2020. The amount of money going towards addressing climate change increased by about 60% between 2013 and 2020, so we are heading in the right direction, just far too slowly.
The fact is that current levels of public and private financing are just not growing fast enough to address the rapidly closing window of opportunity that we have to effectively future-proof our society. Making a bad situation worse is the fact that our banking institutions are still heavily investing in fossil fuels, despite pledges to net zero. At last year’s COP26, more than 450 organizations signed a pledge to align investments around limiting global warming to 1.5°C, it was called the Glasgow Financial Alliance for Net Zero (GFANZ). Since signing that pledge, the 56 biggest banks in GFANZ have invested about $270 billion in fossil fuel companies. That’s more than double what all commercial financial institutes invested in climate in 2019/2020.
Investing in fossil fuels without investing in fossil fuels
Have you ever considered what your bank does with your money while you’re not using it? They don’t just hide it away for a rainy day. The banking business model is one built on promise and risk. Banks take money in, on the promise that they will pay a small amount of interest to the owners of that money, and in turn, they use that money to take calculated risks with the goal of bringing in even more money than they pay out. Ideally, a lot more money than they pay out. Just think about your own personal savings account and any loans you might have. Interest rates paid on a simple savings account are generally pretty low, in the US, the average is 0.37%, but interest rates on a home loan are much higher.
But beyond loans, where does your money actually go? Like a VC fund, banks also make investments. These investments can take many different shapes and forms, including government securities and private companies. Besides the immediate risks involved with any type of investing, there are other - not so obvious - risks as well. Take fossil fuels, for example. It’s common knowledge that the world needs to move away from a fossil-based economy, and so investing in them is seen as detrimental to the climate and a risky financial move. Unfortunately, even if your bank isn’t directly investing in fossil fuels, it is very likely they are doing so through indirect investments by financing another investing body that itself is invested in fossil fuels.
That’s your hard-earned money being funneled into an industry that is destroying the planet we call home. When we can’t trust the banks to do what needs to be done, we need a better way to manage our personal finances.
A different kind of bank
Neobanks like Wise and Revolt were born out of a world frustrated by traditional banking options. These mobile-first financial institutions are typically user-friendly, transparent, and community-driven. The specialized offerings and digital presence of neobanks allow them to incentivize customers with innovative perks, higher returns on savings, and an increased sense of ownership over their financial assets.
What if we combine all of the best parts of a neobank, with the opportunity to move money away from fossil fuels? That’s what Green-Got is doing. Green-Got is a new type of banking platform, one built around a community of people passionate about our planet. The Green-Got team believes that the burdens and opportunities of the climate transition should be shared with everyone, and they do this by offering a truly 100% carbon-free bank account. Climate action isn’t a gimmick or an empty promise with Green-Got. It offers its customers the very best services and advantages of a neo-bank with the highest security standards and a guarantee that their money will never be used to finance fossil fuels.
The goal for Green-Got is to do better than simply not investing in fossil fuels. With each transaction, Green-Got donates a percentage of the transaction fees towards verified planet-positive projects. As the customer, you see the emissions associated with your purchases and an overview of how your purchase history positively impacts the environment. Soon, customers will also be able to save and invest in environmental initiatives they care about, all on the Green-Got mobile app.
The future of finance is green
Before meeting Green-Got, we weren’t sure it was possible for one company to have the best of both worlds–a great neobank, and a purpose-driven green bank. In this case, we’re delighted that we were wrong, and to lead Green-Got’s latest funding round. We truly believe that this team has the potential to create a fundamental shift in the way people manage their money that is better for the planet, and we’re not alone. There is a large community that is now literally invested in their success. As part of this round, Green-Got raised a €1.9 million crowdfunding campaign through Crowdcube in just 80 minutes.
With this new funding, Green-Got will focus on growing its product and user base and expanding into new European markets. The team is already off to a great start. With 13,000 customers signing on within the first ten months of operation, Green-Got was the most successful neo-banking launch of 2022. We can’t wait to see this amazing team continue to grow because each account opened with Green-Got is a step towards closing our massive climate financing gap.
Follow Green-Got on social media to become part of this green financial movement.