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Friday, February 23, 2024

Green banking: 5 simple ways you can help protect the environment

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It is possible for everyone to contribute to the conservation of the environment. Surprisingly, your banking behavior can also play a part. Banks acknowledge the significance of climate change and its effect on their clients. To aid the environment, you can adopt these five eco-friendly banking suggestions.

1. Go paperless

Switching to paperless statements can make your life simpler by reducing clutter and benefiting the environment. Additionally, you can receive your bank statement as soon as it becomes available. Being paperless includes e-statements or text/email receipts at the ATM, which can also serve as proof of your transaction.

Going paperless can help you save money by avoiding the monthly fees charged for receiving paper statements. Typically, these fees can cost between $1 and $5. Additionally, you can decrease your use of paper checks by utilizing electronic transfer services, such as Zelle, for making payments to individuals and billers.

2. Research your bank’s lending and investment portfolios

To practice green banking, it’s crucial to investigate where your bank channels its funds. By conducting research on a bank’s investments, you can make wise choices to refrain from endorsing financial institutions that could be perpetuating environmental damage, like providing funds for fossil fuels.

You can find information on how banks invest on their websites or in sustainability reports. Another option is to use BankTrack, a website that offers detailed information on most banks’ financing initiatives, including their involvement in coal mines, oil drilling, or pipeline construction.

3. Do business with a bank that cares about the environment

If you open an account with a bank that prioritizes the environment, it can demonstrate your support for their commitment to being eco-friendly and preserving the planet.

A good starting point is to check out banks that belong to either the Global Alliance for Banking on Values (GABV) or are B Corp certified. These networks mandate that their members adhere to specific sustainability and social responsibility criteria.

Limelight Bank is an online bank that supports solar projects and has partnerships with national solar product providers. It offers short-term CDs, including a six-month CD, one-year CD, 18-month CD, and 36-month CD, all with a minimum opening amount of $1,000. Bank of America, the second largest bank in the U.S., announced that it achieved carbon neutrality in 2021.

4. Automate your commitment to the environment

Automating your savings through split-deposit, where a portion of your paycheck automatically goes into a high-yield savings account, can help you reach your savings goals more easily. Similarly, you can automate your environmental commitments by opting into Aspiration’s Plant Your Change service, which plants a tree for every completed debit card transaction.

According to Andrei Cherny, CEO and co-founder of Aspiration, the company’s round-up feature is focused on saving the planet rather than just saving money. Aspiration is not an FDIC bank, but they use program banks to ensure that their customers are FDIC insured. It is important to verify that you are following FDIC limits and guidelines with your bank or an institution like Aspiration. Cash management accounts operate similarly to Aspiration.

5. Impact investing may be an option for your portfolio

Bank of America defines impact investing as investing in social or environmental causes. A recent survey by Morgan Stanley shows that 52 percent of investors in the US already engage in at least one sustainable investment activity, indicating that many Americans prioritize impact when making investment choices.

On Fidelity’s website, you can look for exchange-traded funds (ETFs) that focus on environmental, social, and governance (ESG) by using their search function.

Bottom line

Consumers are becoming more conscious of their spending habits, including in the realm of banking. They are seeking out banks that prioritize sustainability, such as those that use electronic options to reduce paper waste. By making small changes to their banking practices, consumers can contribute to environmental conservation efforts.

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