With more interest from the public, green banking may be making its way into the mainstream. 39% of U.S. voters would switch banks to avoid having their deposits used to fund oil and gas, according to a poll by challenger bank Aspiration.
We’re also seeing a change in investors’ mindset when it comes to investing in fossil fuels versus renewable energy. There’s more weight being put on ESG, or Environmental, Social, and Corporate Governance – factors that help measure sustainability and the societal impact of an investment. NextEra Energy, one of the largest investors in renewable energy in the U.S. has seen its shares double in the last two years. Meanwhile, Exxon and Peabody Energy shares are down 52% and 95% respectively.
Banks are picking up on this shift. Many of them are taking steps to shed the image of fossil fuel funders. Citi and CIT are offering sustainable investment solutions. Morgan Stanley, JPMorgan Chase, and Citigroup have all said they won’t fund arctic refuge oil drilling.
“Banks are primarily going green because it is becoming widely accepted that doing so aligns their economic interests,” said Tim Buckley, a financial analyst at IEEFA.org, a nonprofit that aims to accelerate the move to a sustainable energy economy. “[There’s also] a growing acceptance of the increased financial risks of continuing to invest in fossil fuel assets.”