Topo Finance and Compose[d] Unveil Tool to Measure Climate Impact of Personal Banking

Topo Finance and Compose[d] have introduced The Individual Cash Calculator, a new tool that allows individuals to measure the carbon footprint of their personal banking choices. This innovative tool is based on Topo Finance's extensive research into the climate impact of corporate cash, and it aims to shed light on the significant role that banking practices play in individual carbon emissions.

The underlying principle of the tool is the recognition that banks do not simply hold deposited money; they lend and invest it across various sectors, which can have a substantial carbon footprint depending on the bank's lending practices. According to the research, Wall Street banks generate 400% more emissions per dollar lent compared to greener banks in the U.S.

Paul Moinester, Founder and Executive Director of Topo Finance, emphasized the importance of considering where individuals deposit their money. "Around the world, individuals are becoming increasingly adept at applying a climate lens to how we spend our money," Moinester stated. "However, what The Individual Cash Calculator illuminates is that applying this same climate lens to where we deposit our money can be as impactful as how we spend it, which is why everyone needs to harness their banking as a powerful climate lever."

Jason Parkin, Founder, President, and Chief Creative Officer at Compose[d], echoed this sentiment. "Exercising agency over how our banks lend and invest our money is perhaps the single most effective consumer action individuals can take to effect systemic impact," Parkin said. "That's why we were excited to partner with Topo Finance and build a tool that enables individuals to understand the climate impact of their banking and embrace this accessible, low-cost, and powerful climate action."

The significance of personal banking as a climate lever was further underscored by the research conducted by Topo Finance. The findings suggest that moving money from carbon-intensive banks to greener banks could reduce the associated greenhouse gas emissions by an average of 80%. Furthermore, individuals banking with U.S. carbon-intensive banks may be indirectly lending 20–30% of their money to industries most responsible for the climate crisis, such as energy production, utilities, mining, and large-scale manufacturing.

For instance, moving $5,000 from a carbon-intensive bank to a greener bank could result in a greater annual reduction in emissions than adopting a vegan diet. This highlights the powerful impact that banking choices can have on the environment.

In collaboration with BankFWD, Topo Finance and Compose[d] developed The Individual Cash Calculator. To further explore the role of personal banking in climate action, readers can refer to the report co-produced by Topo Finance and Project Drawdown, titled "Saving (for) the Planet." For those looking to switch to greener banking options, Bank for Good provides a list of suitable alternatives.