Ben Stuart is head of growth and transformation and the chief marketing officer at Bank of the West, where he oversees corporate social responsibility, customer experience, and digital channels.

Earlier this month at COP26, former Bank of England Governor Mark Carney introduced the U.N.’s Glasgow Financial Alliance for Net Zero, or Gfanz. Some 450 banks from 45 countries have pledged to report the annual carbon emissions of the projects they fund and have committed to net zero carbon emissions of those projects by 2050.

This is progress, but that goal is too far in an uncertain future. The transition away from fossil fuels to green energy must happen — and it must happen quickly. When it comes to the future of our planet, banks cannot continue to play both sides of the climate emergency.

Banks have been trying to look like they’re taking climate action for some time, for instance installing solar panels on branch locations. But financial institutions cannot tout sustainability efforts while quietly financing dirty energy. This may make them a few bucks in the near term (no, a lot of bucks), but it pushes all of us closer to the brink of catastrophe. As environmentalist David Brower noted, there is no business to be done on a dead planet.

Fix thanks its sponsors. Become one.

In the face of the climate crisis, the key is committing to change at a deep level, not making token gestures. For banks, that means no longer financing the most harmful forms of energy extraction, which are meant to wring the last drops of fossil fuels from an injured Earth. It means pouring more financing into clean energy by supporting newer companies and existing players committed to changing their old models. 

Given the practical, logistical, and commercial impossibility of flipping a switch to end fossil fuel production overnight, a key part of the solution is tracking the ratio of renewable versus fossil fuels financing by banks, something called a green ratio. Bloomberg data shows that since 2016 — after the signing of the Paris Agreement — the largest banks have ramped up green financing, but they still have terribly lopsided ratios. ​​Of the 20 biggest banks Bloomberg analyzed, only three have at least 50 percent of their investments in green projects. In other words, top financiers may be upping green investments, but they’re not concurrently winding down brown financing. 

We need only look to the dot-com and mortgage meltdowns to see what happens when financial institutions say one thing but do another. As the head of advertising and marketing for a major brokerage at the time, I had a front-row seat for both. Preceding the 2008 crisis, major firms sold clients on complex securities while betting against them, a scheme made famous by Michael Lewis’s book The Big Short. It ended in disaster. The lesson is that financial companies can’t loudly sell one thing out the front door, and quietly (and handsomely) profit doing the exact opposite out the back, without causing widespread harm. Right now, some banks are effectively short-selling our future.

Reducing our reliance on fossil fuels doesn’t have to mean taking a financial hit. If a bank does more green business and less brown business, the balance sheet will stay the same. But banks also need to dig deeper than profits: Is the focus on the value of the transaction itself or the value of what that transaction can accomplish? If a bank doesn’t have an ethos and culture that centers the public good, transition is going to be contentious.  

Fix thanks its sponsors. Become one.

Reducing our reliance on fossil fuels doesn’t have to mean taking a financial hit. If a bank does more green business and less brown business, the balance sheet will stay the same.

At Bank of the West, we made a decision in 2017 to wind down financing of fossil fuels while simultaneously ramping up financing of sustainable energy. We were following the lead of our Paris-based parent company, BNP Paribas, which committed to the transition after the Paris Agreement. That undoubtedly made it easier for us to walk away from dozens of fracking companies in Colorado and coal interests in Wyoming — there was a stretch when we were losing numerous customers and significant assets every day. Meanwhile, we faced backlash from elected officials who called for a review of our public depository status. This shift cost us in the short term, but in the long term it led to unprecedented customer growth. 

We’re not perfect — we still do business with subsidiaries of big oil and gas. But our portfolio has less than 1 percent direct fossil fuel exposure (with zero offshore oil or gas), and more than 82 percent of all power-generation projects financed in 2020 by our parent company were renewable energy projects. To our knowledge, we’re the only major U.S. bank that has chosen to prohibit the financing of fracking, Arctic drilling, and big tobacco, and restrict the financing of coal-fired power plants.

No financial institution with any historically measurable balance sheet is going to be perfect — and the less of a green track record a bank has, the more difficult it will be to convince green businesses they are worthy partners. It’s much easier to stay the course than to drop lucrative deals that renew effortlessly year after year. Winning new business requires time, hard work, and a commitment to more than the dollar value. 

Untangling bank loans from the fossil fuel industry is a process that cannot happen overnight; at the same time, it needs to happen faster. That means making tough decisions about what forms of energy banks will and will not finance, even if it entails pulling the plug on existing deals.

We need to see more banks with better green ratios, and we need to see all banks consistently improving their ratio year over year. We’ll know we’ve made it when the top 20 largest banks hit positive ratios and when the dirtiest, most extractive projects can no longer find funders. 

Like the dot-com and mortgage crises, our climate crisis is man-made. The finance industry played a primary role in those past disasters, and it’s playing a primary role in today’s. The difference now is that there will be no planetary bailout or recovery package that can possibly undo the damage wrought if major corporate players stick with their tired playbook of loudly hyping one thing while quietly doing another. This time, we’re on our own.

The views expressed here reflect those of the authors. 

Fix is committed to publishing a diversity of voices, and we want to hear from you. Got a bold idea, fresh perspective, or insightful news analysis? Send a draft, along with a note about who you are, to