Do You Know Where Your Money Is?

Get to know where your money might be supporting fossil fuels and the financial institutions that fund their operations.

"Banking On Climate Change", the Fossil Fuel Finance Report Card for 2017 includes a list of the top 37 banks financing fracking, drilling, pipeline infrastructure expansion, export terminals etc.

As individuals and businesses, we can steer our money away from these institutions and into community banks and credit unions that support local and sustainable development.

You work hard to be socially conscious. But what about your money?

For all the cruelty-free, anti-sweatshop, organic attention you give your individual purchases day to day, your money may be paying for causes you don't want to support.

"Do you know where your money spends the night?" asks Morgan Simon, an impact investor and author of the forthcoming book, "Real Impact: The New Economics of Social Change."

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"We're stakeholders of banks and institutions and they are investing money on our behalf. We should know where it's going."

She says asking questions like: Who owns this bank? How are my deposits being invested? are key to knowing what your money gets up to when you bank, save and invest it.

"Every day Americans spend $36 billion as consumers," says Andrei Cherny, the co-founder and CEO of Aspiration, a financial firm emphasizing social impact. "That is an enormously powerful lever to change the way companies act toward the environment and people."

Here are three ways to do an impact check on your money and ensure your financial institutions and investments are aligned with your personal values.

Should you break up with your bank?

"When you put your money in the bank, it isn't just sitting in the back of the vault," says Cherny. "It's is being loaned out, and for many big banks that means they are lending the money in a way that is dangerous for the planet."

Sure, you've heard of the big banks. But all across the country there are other banks and credit unions that you may find are more aligned with your values.

For example, there's San Francisco-based New Resource Bank, which serves values-driven businesses and nonprofits. There's Aspiration's Summit bank account. Or Beneficial State Bank, a community development bank. These institutions are FDIC insured, just like the big banks, but provide greater transparency in how your deposits are used.

In some cases, they offer a better interest rate than your typical bank. The Aspiration Summit bank account, for example, carries no monthly service fees, free ATMs around the world and a 1% annual percentage yield.

"Every dollar is a vote," says Simon. "You get to make that vote every time you do something with your money."

What is your savings and spending funding?

In a low-interest-rate environment, you're not earning much on your savings. Simon suggests you can get better returns -- and put your money to better use -- by placing savings in social impact portfolios, which could earn you 1% to 4%, depending on the term.

An institution like Calvert Foundation, for example, offers an investment product called the Community Investment Note. Calvert Foundation has raised over $1.5 billion from more than 18,000 investors, many of them individuals putting in as little as $20. The money is then invested in hundreds of organizations, projects, and funds that, the organization reports, are making a measurable impact around the world.

While the portfolio is not FDIC insured, the institution has levels of protections on its investments, and in its 22 year history has paid back 100% of its investors on principal and interest.

And what about your spending?

"Every day we're making spending decisions based on cost, quality and convenience," says Cherny. "Now consciousness is a part of it, too, because we have the data and tools to follow it."

Those who have an Aspiration bank account have access to the Aspiration Impact Measurement, which is a "people" and "planet" score given to each place you use your debit card. That way, when going for your routine purchases at the drugstore, you can see if Walgreens or CVS is more aligned with your values.

A similar service is offered by Swich, without the bank account. The site scores businesses on dimensions of health, the environment, how it treats workers, local and global impact.

Are you investing ethically?

As a conscientious consumer, you make socially responsible choices for people and the planet with your purchases, but when you find out your mutual fund is invested in fossil fuels, all your efforts may feel for naught.

At the very least check with your mutual fund company to see if there's a social impact option, like Vanguard's Social Index Fund or Fidelity's Select Environment and Alternative Energy Portfolio.

If you want to take the next step you can invest with an investment firm with a socially responsible emphasis like Swell or Betterment. Aspiration's Redwood Fund, for example, is fossil-fuel free and fire-arm free and has a $100 minimum to invest. The IRA offered by the firm, similarly, invests in sustainable companies.

This is an area pumped and primed for young people, say impact investors.

"Millennials need to be front and center in this conversation," says Simon. "Don't just be a passive consumer, be an active participant in what impact will mean."


Align Your Money With Your Values

Whether we are talking about personal accounts, grants, endowments, pension funds, 401Ks or other investments, it is becoming increasingly important to align our money with our values. In today's shifting economy and emerging clean energy technology the deeply entrenched energy interests of the past work diligently to tilt public policy in their favor in numerous ways.

US Taxpayers subsidize the fossil fuel industry approximately $20 Billion/annually according to Price Of . This does not include the cost of rebuilding places like Houston, New Orleans, Puerto Rico and others., which again will likely be paid by taxpayers rather than the companies responsible. Ending subsidies for fossil fuels in a very real and growing possibility. The World Bank recently announced it would halt any further subsidizing of fossil fuels in the developing world.

Stranded assets in the form of half-finished pipelines or abandoned fossil-fuel infrastructure projects put investors on the hook for short-sighted CEOs with golden parachutes. Forward-leaning companies and asset managers see the potential liability with fossil fuel investments as the price of renewable continues to fall and the price of oil stagnates.

Net-metering, a program by which residential and commercial solar and wind power generators can sell excess power back to the utility, is under attack at the state level nationwide. In a bid to hobble clean energy competition, lobbyists for fossil fuel interests are hard at work thwarting the free-market and undermining recent progress towards renewables. In Tennessee, the TVA has taken a decidedly fossil-friendly position on clean energy development, with recent rollbacks on net-metering incentives.

More than ever, our careful investments as individuals, workforces, companies and boards of directors are needed to drive the transition from a fossil-fuel-based economy to a clean and sustainable energy economy.


Drive Investment In The Clean Energy Transition

By moving your money away from banks and financial institutions that finance pipeline infrastructure, drilling, fracking, the construction of Liquid Natural Gas Terminals, Compressor Stations and Oil Refineries etc, you will be joining a global movement that strives to break the grip on energy policy that the fossil fuel industry has enjoyed for over 100 years. The technology for transitioning to renewables is available and getting cheaper and more efficient every day.

Suppressing the free-market and protecting the fossil fuel monopoly through subsidies and state-level attacks on net-metering(the ability to sell excess energy from solar or wind back to the utilities) and the undermining of regulatory oversight and enforcement etc is part and parcel of the fossil fuel paradigm. It must end, and the change must be driven by finance.

Forbes Magazine makes some very rosy predictions for clean energy investments going into 2018.

CNBC also forecasts positive earnings on renewable energy investments across the board.

Speculation on Fossil Fuel investments are not quite as positive, according to this piece by PRI.

Newsweek reports major problems with fossil fuel-based pension funds.


Make A Clean Break, Trillium Investments and Green Century Funds have put together an amazing resource for anyone thinking about divestment. It's called "Make A Clean Break" 


Next Steps...

On the off-chance that you haven't signed the petition yet, please hit the button and sign our petition to urge Mayor Barry and City Council commit to the divestment from fossil fuel by the City of Nashville.