Keeling Curve

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Project Summary / Description:

In 2021, we asked two questions that are transforming how responsible corporations, organizations, and individuals view and manage their banking and investing.

Why are climate-leading companies not aligning their banking and investing impacts with their climate objectives?

What is the climate impact of these companies’ cash and investments?

By answering these questions, we discovered what Bill McKibben has called, “the largest remaining source of huge and hidden carbon emissions in our economy.” However, more importantly, we discovered an opportunity to convert this previously hidden emissions source into a force capable of accelerating the financial sector's decarbonization.

To actualize this impact, we have developed a data-driven approach to demonstrate to businesses, institutions, and individuals that their banking and investing is one of, if not their largest, climate impacts. Additionally, we are building a suite of campaigns and tools to enable all consumers to transform their finances into an engine for progress.

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How Project Affects Greenhouse Gas (GHG) Emissions:

While the fossil fuel industry is widely regarded as the primary driver of climate change, the invisible hand that powers this industry and other carbon-intensive sectors is the financial system. In fact, according to Moody’s, financial institutions across G20 countries collectively have $22 trillion of exposure to the carbon-intensive industries driving climate change.

Despite this destructive history, the financial sector represents our best hope for mitigating climate change because it has the potential to become the world’s most powerful force for decarbonizing the global economy. However, this transformation is not happening at the requisite speed and scale, even though the growing demand for ESG products and the responsible finance movement have accelerated the financial sector’s decarbonization.

The primary reason for this insufficient transformation is because despite these effective efforts, we have not been able to deliver sufficient financial pressure on the world’s largest financial institutions to decarbonize more aggressively. However, that is the explicit purpose of the Carbon Bankroll Initiative - leverage the financial power of the world’s wealthiest companies, institutions, and individuals to hasten the decarbonization of the global financial sector and accelerate the transitioning of trillions of dollars away from financing carbon intensive sectors and toward industries that will reduce, avoid, and remove GHG emissions.

To comprehend the Carbon Bankroll’s influence, it is critical to first understand that until recently, most companies and organizations have treated their cash and investments - their financial supply chain - as climate neutral. Even sustainability and treasury teams at climate leading companies, like Amazon, Apple, Meta, Microsoft and Salesforce, directly told us they have never considered measuring and managing the emissions enabled by their cash and investments, which in 2021 collectively totaled $460 billion and enabled the generation of 40,384 kt CO2 (annual emissions). Frankly, these companies were baffled when we told them their financial supply chain emissions were one of, if not their largest, emissions sources.

As evidenced by these conversations, when this project commenced, large institutional climate leaders were far from leveraging their finances to transform the financial system. Therefore, to accomplish this ambitious objective, we are executing a four-pronged strategy:

Methodology: Create a novel methodology for calculating the climate impact of any entity’s cash and investments

Awareness: Develop groundbreaking data and publish reports demonstrating the substantial impact of this previously overlooked emissions source

Tools and Strategies: Build tools and strategies that help all consumers measure and reduce their financed emissions

Forcing functions: Institutionalize financed emissions reduction as a core sustainability strategy by integrating this practice into the Greenhouse Gas Protocol and other reporting frameworks

We are still years away from realizing this project’s potential impact. However, the growing adoption of our work, including the GHG Protocol team confirming that corporate financed emissions are covered by Scope 3, inspire confidence that financed emissions management will become a core sustainability strategy for all responsible institutions, which will push financial firms to transition billions of dollars into investments that will reduce, avoid, and remove greenhouse gas emissions at scale.

Impact on Underrepresented Groups:

Few systems have been more detrimental to people of color and global majority individuals than the financial sector – a sector that for centuries has perpetuated systemic inequities; limited equitable participation; and underwritten much of the planet’s environmental destruction, which disproportionately impacts marginalized communities.

This global, unjust system has thrived because it has historically operated invisibly and prevented consumers from understanding its social and environmental injustices. However, we are working to transform this invisible hand of injustice into a visible hand for creating a more just, regenerative world through three efforts:

Increasing awareness - By shining a floodlight on the financial system’s intersectional environmental impact, we aim to a) illuminate for all individuals and institutions how their reliance on a misaligned financial system is generating significant harm; and b) to inspire all consumers to use their finance as a force for progress.

Building impactful tools - By building tools that help consumers transform their finances into a force for progress, we can help all consumers be agents of social and environmental change.

Elevating community banks - 99% of all US banks are community banks that play a vital role investing in local communities and creating a more just, equitable society. However, many consumers are unaware of these benefits and have not prioritized moving their money to local banks as an avenue for impact. By encouraging consumers to move at least a portion of their finances to community banks, we aim to drive substantial capital investment into underserved communities at scale.

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