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 tool designed to help individuals evaluate the climate impact of their personal banking. This tool draws from Topo's research on the climate impact of corporate cash, enabling users to understand the emissions their banking practices support and the potential climate benefits of switching to greener banking options. This development underscores the importance of banking choices as a critical consumer climate decision.

Banking's climate significance lies in how banks use deposited funds. Rather than merely holding money, banks lend it to various sectors, including energy projects and mortgages. Consequently, each dollar in the bank has an associated carbon footprint, varying significantly based on the bank's lending practices. Notably, 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 tool's revelatory impact. "Around the world, individuals are becoming increasingly adept at applying a climate lens to how we spend our money," he 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," he 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."

Research by Topo Finance reveals the significant potential impact of this tool. Moving money from a carbon-intensive bank to a greener one can reduce associated greenhouse gas emissions by an average of 80%. Additionally, customers of U.S. carbon-intensive banks may be indirectly lending up to 20-30% of their money to industries heavily contributing to the climate crisis, such as energy production, utilities, mining, and large-scale manufacturing.

The practical implications are substantial. For instance, transferring $5,000 from a carbon-intensive bank to a greener one could result in an annual emissions reduction greater than that achieved by adopting a vegan diet. This demonstrates the tool's potential to drive significant environmental benefits through informed personal banking choices.

Topo Finance and Compose[d], in partnership with BankFWD, developed The Individual Cash Calculator. For those interested in learning more about personal banking as a climate solution, the report "Saving (for) the Planet", co-produced by Topo Finance and Project Drawdown, offers additional insights. To explore green banking options, visit Bank for Good.