Having recently recorded some of the highest average global temperatures in the last hundred years, the average rise in temperature is causing scientists to worry about the future of our planet.
Experts forecast that over the next 30 years, rising global temperatures will cause significantly more wildfires, floods, and droughts throughout the world. This is why many consumers are looking towards more eco-friendly banking and credit options.
Credit card companies and responsibility
One of the large motivators behind change is the issue of responsibility.
For years corporations have gotten away with being able to pollute as much they want without any significant consequences. Left unchecked, many of these corporations will likely continue to emit large levels of carbon dioxide without any sense of responsibility. For years these businesses have been financially backed by some of the biggest banks that not only invest in fossil fuel projects but produce the credit cards that Americans use for everyday purchases.
While it is true that governments play a crucial role in enforcing corporate accountability, it shouldn’t be the only organization that keeps polluting industries accountable. Much of the account needs to fall on the shareholders of large companies. With that in mind, we’ve begun to see a rise in the number of investors who choose to invest in companies with sustainable environmental practices.
Impact investing has become much more popular throughout the last decade.
This form of investment focuses on the social and environmental practices that companies engage in, and the rise of this type of investing is seen as one of the most underutilized ways of combating climate change and holding corporations accountable.
When investors vote with their dollars, it can create an incentive for old polluting industries to engage in more environmentally sustainable practices. Without the support of the investment community, companies can be put in a position where they have to adapt to our changing social climate. This can then lead them to put a greater emphasis on finding more sustainable forms of energy while also minimizing their overall emissions.
Along with this new trend of impact investing, is a call for the creation of international sustainability metrics.
These proposed metric standards will measure polluting corporation’s energy consumption while also taking into account the amount of carbon they emit in addition to the impact their pollution has on our natural ecosystem. This proposal would likely be enforced similarly to financial regulations and would be overseen by national regulators.
Beware of greenwashing
Greenwashing is when a company advertises itself as being “green” and eco-friendly but doesn’t change its business or processes to actually do so.
Many companies recognized that when “being green” and sustainable became popular with consumers, they needed to change their image. However, if all they changed was their image, then this is likely a case of greenwashing.
Unfortunately, many big banks have been caught not backing up their acclaimed values with their investments.
JP Morgan Chase is one of the top financiers of major fossil fuel projects, from arctic oil and gas to deep-water drilling. In fact, in 2019, they spent nearly $65 billion. Citi, Bank of America, and Wells Fargo are other big banks that invest in fossil fuel projects.
If you want to be certain that the bank you’re working with is ethical and eco-friendly, there are a few things to look for.
One is if they are a registered B-Corp, as these banks are required by law to consider the impact of their actions on the environment, community, suppliers, customers, and employees. Banks can also be CDFI certified financial institutions. These banks are committed to serving and empowering economically disadvantaged communities.
Finally, there’s the GABV (The Global Alliance for Banking on Values), whose banks are part of an independent network of ethical banks “using finance to deliver sustainable economic, social and environmental development.”
Credit cards – the catalyst of change
In this day and age of contactless and mobile payments, the credit card industry has grown significantly. Many companies are working towards a better tomorrow by making changes to their materials, their smartphone app options, and more.
Materials used to make credit cards
One of the biggest issues with credit cards is that they have always been made of plastic.
Traditionally, they were made with “first use” plastic but many companies have moved to recycled plastic. While recycled plastic is still plastic, at least it is reused. Some companies are taking this one step further by using recycled ocean plastic or fully biodegradable materials in place of plastic.
Metal cards have also become popular. These are much more durable, last longer than plastic cards, and are also recyclable.
Offering digital payment methods and giving the consumer the option to opt out of automatic card replacements can be another great way for a bank to limit its environmental impact.
How spending needs to change
One of the best ways to make an impact on the environment is to change your personal spending habits, as little changes in your daily life can go a long way in helping out the planet.
Consumers are often simply not aware of the impact they are having on the planet through their purchases. Much of today’s technology is not easy to recycle due to the chips and components they are made from. Banks that offer a way to track your spending and the effect it has on the environment can help to increase consumer awareness and visibility into the environmental impact of purchases.
5 credit companies paving the way
Here are five credit card companies that are paving the way in ethical and environmentally-friendly banking.
Amalgamated Bank Maximum Rewards Mastercard
Amalgamated is a B-Corp and GABV member that offers a variety of accounts and services in addition to credit cards.
They are net-zero and 100% powered by renewable energy, and their investments are fossil fuel-free. They also don’t invest in any businesses involved in tobacco, weapons, or private prisons.
Their credit card offers no annual fee and 1.5% cashback on every purchase. Travel rewards are available as well.
Green America Rewards Platinum Visa
Green America is a nonprofit organization with a card issued by TCM bank.
Green America supports fair trade, clean energy, and eliminating GMOs from the food supply.
Their card has no annual fee and 9% introductory APR on purchases and balance transfers for 12 months. Customers earn one point per dollar on purchases with no cap on points you can earn, and points can be redeemed for travel rewards.
Amazon Watch Rewards Platinum Visa
Amazon Watch is a nonprofit dedicated to protecting the rainforest and indigenous people of the Amazon basin.
The card is issued by TCM bank, and users can earn one point per dollar which can be redeemed for travel rewards.
M&F Bank Personal World Mastercard
M&F Bank is an independent community bank that is CDFI certified and Black-owned.
Their card has a $35 annual fee and a 12.24% APR on purchases. Customers earn one point per dollar on purchases and rewards are redeemable for travel.
International Living Future Institute’s Affinity Card
International Living Future’s Visa platinum card is all about redefining the green building movement. The mission is to offer green building and infrastructure solutions that will help create a better world.
There is no annual fee, and cardholders earn one point per dollar on net purchases that can be redeemed for merchandise or travel rewards. The card is issued by TCM Bank.
The Aspiration Zero card can help you shop responsibly
The Aspiration Zero is a carbon credit card issued by Aspiration, a sustainable neobank that tracks the carbon emissions of your purchases. With each purchase, Aspiration will plant a tree to offset your carbon footprint.
After 60 or more trees have been planted through your monthly spending, Aspiration considers you to have reached your monthly carbon neutral goal. As a reward, you will receive 1% cashback on all purchases made that month.
Try the Aspiration Zero today to start fighting climate change with your money.