Green banks – financial institutions or facilities dedicated to accelerating the shift to a sustainable economy – drove a record amount of clean energy investment last year. According to the Coalition for Green Capital and 2020’s Green Bank Industry Report, the total investment in clean energy was $7 billion. Initiatives like the Net-Zero Banking Alliance aim to help banks across 27 countries reach net-zero carbon emissions across their lending portfolios by 2050.
But until recently, consumers haven’t had many direct options to make sure their personal assets were supporting sustainable causes. “Within Ando’s app, we have an Impact Center, where we encourage customers to see how much Ando has funded green initiatives—$12.2 million so far,” says JP McNeill, Ando’s CEO. He explains that Ando’s loans for commercial and residential clean energy have already generated 8.7 million pounds of CO2 savings annually.
Green lending currently represents less than 2% of all loans globally. To hit the U.N.’s emission reduction target of capping global warming at 2 degrees Celsius, annual global emissions will need to be reduced by 50% within the next decade. “That’s going to be challenging, but [that] is exactly why Ando was founded,” McNeill says. According to the International Energy Agency, global investments in renewable energy projects need to reach $5 trillion a year by 2030 to meet these emission targets.
Other financial services providers with a focus on sustainability, such as Aspiration, say they won’t put customer funds with banks that invest in the fossil fuel industry, a practice that is common among even private and commercial investment banks pledging to achieve “net-zero” financing. “Aspiration avoids investments in fossil fuels,” McNeill says. “Ando not only does that, but directs funds to where they are needed most: Exclusively green investments.”
Read the full article about green banking at Grist.
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