Here’s the problem: Despite the climate crisis, our biggest banks are huge funders of coal and gas and oil companies. In the years since the Paris climate accords, they have given more than three trillion dollars in loans to these companies, even as scientists have told us we must stop the expansion of this industry.
The money they loan ends up building pipelines (endangering rivers and streams, and the rights of Native Americans). Those loans support fracking wells (even though scientists have proven they leak huge amounts of greenhouse gases). That money helps build giant terminals for exporting more gas and oil, even though everyone knows the world has to switch to renewable energy.
Because engineers have done such good work in recent years, solar and wind power is now the cheapest way to generate power on our planet. So why do big banks keep loaning money to the fossil fuel industry? Because they can still make a quick profit—but only at the expense of everyone who comes after us.
Ending these loans will play a big part in speeding the energy transition—and it’s a job that older Americans are especially qualified to work on. That’s because, after a lifetime of work, our savings and retirement accounts contain many of the assets that back these loans. Chase or Citibank or Bank of America or Wells Fargo needs us more than we need them. They may not pay as much attention as they should to younger people because they don’t have much money yet, but they will definitely pay attention to our generation.
Please don’t cancel your credit cards or switch your bank accounts just yet. That’s because if you just quietly go change your account tomorrow on your own, the banks won’t take notice. So, with your help, we will be spending several months getting more people—lots more—to take the pledge. We want to put the banks on notice when we have a critical mass of pledges. Then, if the banks don’t act by the March 1, 2023, we want to make the switch en masse and get a lot of visibility when we do. Imagine a national day of “The Big Cut” where all across the country we cut-up our credit cards together. That way, the banks will notice and we can have a greater collective impact. So, please wait until we let you know when this national day of action will happen. Meanwhile, we will be assembling lists of better-banking and credit card options for folks to consider before switching or canceling. And with any luck none of us will have to take these steps—because the banks will bend to the obvious common sense of this argument.
Third Act is planning to develop a vetted list of better credit card companies and banks, building on the work of many great partners, so that when the time is right to make the switch, likely towards the end of this year, we have good options. We will also offer a variety of resources, toolkits, webinars, and trainings to help people easily make the switch. And we will plan ways that we can raise the visibility of our collective efforts as we escalate this campaign. So, stay tuned. We will be rolling out these offerings in the months ahead.
If you want to start educating yourself now, you can check out some of these resources below. You could consider applying for a new credit card now, but wait to cancel your existing ones until we are ready towards the end of the year. Here are more tools to help you find better banks and credit cards:
We need to both cut-off investments in dirty fossil fuels and also ramp-up investments in clean energy and other climate solutions. Third Act is legally prohibited from offering investment advice and we are not investment advisors. Third Act is working on this bank consumer campaign piece of the financial puzzle, while other organizations are working on other parts. We will be collaborating with a variety of partners and share more as these partnerships develop.
Here are some resources from other groups that you may find helpful. Green America, and many others, including As You Sow’s Invest Your Values, offer a variety of resources, analysis, and scorecards about investments and options that are more environmentally and socially conscious. As You Sow also puts out a list of companies investing in clean energy: the Clean 200. Divest/Invest also has some resources. In the coming months, Third Act will be partnering with experts and organizations to offer resources, toolkits, and webinars about other banking, credit card, and investment options for people to consider. You can use these resources —and others—to foster conversations with your own investment advisors.
Pension funds are also key players in the financial system and many older Americans, including Third Act supporters, do not want their retirement savings to be used to finance climate destruction. We anticipate collaborating with other organizations working on pension fund divestment and lending support where we can. You can learn more from campaigns like TIAA-Divest,Divest-NY Teachers, and Fossil Free California, among others.
We are starting with the focus on credit cards, and checking and savings bank accounts, because it’s an easy starting point for many people. We plan for a second phase of this Banking on our Future campaign when together we will take on companies and organizations that have credit card deals with these Big Four Banks – the airline companies, hotel chains, large businesses (like Amazon and CostCo), universities, and other companies – and work to persuade them to switch their corporate accounts to credit cards issued by banks that don’t invest in fossil fuels. So, yes! Let’s work on this together. In the meantime, please sign one of our pledges for customers (including a store or reward credit card issued by one of these banks) or non-customers. But remember, don’t cut up your credit card yet. As we do our research on good alternative banking and credit card options, we will factor in rewards, perks, and other benefits people are seeking.
Regarding frequent flyer miles, our understanding is that as you accrue frequent flyer miles via your credit card, those miles go directly into your airline’s frequent flyer account – they don’t reside with the credit card company. We believe they are accrued monthly. So, if you switch your credit card, we do not believe that you will lose the frequent flyer miles already accrued to date, though you would stop accruing them after you switch. You should check with your credit card company and your frequent flyer program. We should also note that since the pandemic and economic challenges faced by the airline industry that several airlines have been changing their frequent flyer rules and how many miles are required to redeem various trips. So, these perks may not be as valuable as they were. Again, please check with your companies on the specifics.
For other points and rewards, you will want to use or apply them before you cancel the account.
Our friends at BankTrack have created this great tool where you can look up a rating for various banks on fossil fuel financing: https://bank.green/ You can also check out the ratings of 60 banks investing in climate destruction in this report from Rainforest Action Network, Banking on Climate Chaos.
The movement to divest from fossil fuels is working – to the tune of $40 trillion – and has, as Bill McKibben notes in this New York Times op-ed “helped rub the shine off what was once the planet’s dominant industry.” It’s also working to ramp-up clean energy, quoting from the same NYT piece: “over the last five years, the market has gone up at an annual rate of 16 percent, but the oil and gas sector has fallen at an annual rate of 3 percent. Now many investors are putting their money into clean energy, where returns have risen by an annual rate of 22 percent over the same period.”
The credit card market is actually quite lucrative and competitive for the big four banks. Chase, Citibank, Bank of America, and Wells Fargo together account for a huge amount of the credit card market (more than 40%), and so they are ripe targets for a consumer campaign. The banks spend on average about $1,000 recruiting new credit card customers, so our threat will hit them hard. And older American consumers are the ones that hold 70% of the wealth in this country and are long-standing customers that the banks depend on for their business. We are starting with the focus on credit cards, and checking and savings accounts, because cutting up a credit card is an easier starting point for many people. There are many other organizations that are working on insurance companies, pension funds, retirement investments, and other financiers. So, the consumer banking and credit card market is another angle and tactic in this broader effort to stop all types of financial institutions’ investments in climate destruction. To hold the banks accountable, we will evaluate their responses to our demands and changes in their investments in partnership with the many other organizations that are watchdogging and analyzing the financial sector’s practices and climate risks.
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