I Switched To A Credit Union To Help Fight Climate Change
I’ve been an RBC customer for so long, I remember when I was making decent interest on the $100 or so of birthday money I had in my Leo’s Young Savers account. (Hint: it was definitely not in this century.) And I know I’m not the only one with this kind of account longevity. Whether because of inertia or brand loyalty or both, it’s pretty common in Canada for people to stick with the same provider for most of their lives.
And really, I can’t say I’ve been unhappy with RBC. The fees are a bit high, the rate they pay on “high-interest” savings accounts can be laughably low, but overall, the service and products have met my needs, and I’ve dealt with some lovely front-line employees over the years. (Shout-out to the staffer in Swift Current, Sask., last fall who swiftly helped me sort out some PIN troubles.) Plus their ATMs are everywhere.
But then a few years ago I started thinking more seriously about climate change and some of the ways I can contribute toward solutions. Around the same time, talk of big pension funds, universities and other organizations getting their money out of fossil fuels was all over the news. I began transitioning my investments into more climate-friendly options, and paying more attention to the world of sustainable finance. And that’s when I found out about the role Canada’s big banks play in getting fossil fuels out of the ground and into our biosphere.
Someone has to pay for oil and gas development
It turns out that Canada’s “big five” banks—that includes RBC as well as TD, Scotiabank, BMO and CIBC, in declining order of how much money they make—are big investors in fossil fuel projects. In 2022, according to the report Banking on Climate Chaos, which is created by a group of organizations including the Sierra Club, RBC alone invested US$42.1 billion (a.k.a. more than 40,000 million dollars) into fossil fuel development, an increase over 2021, and has put in a total of more than US$250 billion between 2016 and 2022. (That’s since the Paris Agreement has been in effect.) In 2022, out of all the world’s banks, RBC was the largest investor in fossil fuels on Earth.
If, like me, you believe we need to transition off fossil fuels ASAP to avoid the worst effects of climate change—which, let’s be honest, are already getting bad—these numbers might not make a lot of sense. Yes, some of that money helps create jobs and goes into local economies. But at what cost?
To get their perspective for this article, I got in touch with RBC’s communications department and asked if I could speak with someone about their policies on fossil fuel investment. Instead, I received a reply to my questions via an email from a senior manager of climate communications. It contained several well-polished paragraphs about their “balanced approach” to the energy transition. The gist: Don’t worry, climate change is a big deal but RBC is on it, and while we’re aiming for net-zero eventually, and we’re investing in clean energy, we need fossil fuels to fill the gap. In a later follow-up, they added that they’ve committed to providing a cumulative $500 billion in sustainable finance by 2025, including $84.8 billion in 2022. This funding goes to both green initiatives and those that they consider socially responsible.
“The transition will not happen overnight—without risking significant harm and disruption to lives and livelihoods,” they continue. “Society still needs a variety of forms of energy, including fossil fuels, to power the economy and people’s lives.”
I mean, sure. I agree that cutting fossil fuel use down to zero tomorrow would cause chaos. But if you ask me, RBC really seems to be trying to have its cake and eat it too. Imagine how much public transportation, clean energy development and other climate-friendly innovation even just a portion of those billions and billions of dollars invested in fossil fuels could pay for.
Besides, thanks to our rampant and still-growing fossil fuel use, climate change is already causing significant harm and disruption to lives and livelihoods—and they’re costly, too. Just ask the people who suffered through the recent cyclone in New Zealand, the severe and deadly floods last year in Pakistan, or the complete destruction of Lytton, B.C.—all extreme weather events whose severity has been linked to climate change. And that’s just the tip of the rapidly melting iceberg. In fact, according to a 2022 study from Queen’s University, dealing with the physical effects alone of global warming will cost significantly more—up to $45.4 billion—than it would cost to reduce greenhouse gas emissions.
Indigenous rights matter, too
Fossil fuel development is inextricably tied to Indigenous land rights. One example is Wet’suwet’en territory in British Columbia, which has become a focal point for Indigenous land defenders who say that development of the Coastal GasLink pipeline is occurring without proper consent from the nations whose territory it crosses and will both restrict their access to their territory and risk the safety of their lands, waters and way of life.
According to a story by independent environmental news organization The Narwhal, while pipeline development company TC Energy has secured agreements with 20 First Nations along the route, none of those nations has reserve land that actually intersects with the pipeline. In the same story, Narwhal reporter Matt Simmons points out that according to a 1997 decision by the Supreme Court of Canada, “...the Wet’suwet’en and Gitxsan nations never gave up Rights and Title to the lands and waters…” meaning the hereditary government has jurisdiction over non-reserve territory. A 190-kilometre stretch of pipeline route cuts right through the middle of Wet’suwet’en land, and land defenders and supporters have been arrested at gunpoint and evicted from their land to keep construction moving.
“When RBC funds projects such as these, they’re funding the violence too,” said Wet’suwet’en hereditary Chief Na’Moks in a February 27 webinar hosted by the organization Indigenous Climate Action (ICA). (RBC is one of a number of banks financing the Coastal GasLink pipeline, and CEO Dave McKay has defended that decision. In response to a request to comment on Chief Na’Moks’s statement, RBC said “we are one of many financiers of the Coastal GasLink project, which is supported by elected and hereditary leaders in the 20 Indigenous communities along its route. The pipeline operators, who are responsible for the day-to-day operations of the project, have engaged in extensive consultations with the Indigenous communities along the route and Indigenous partners have been instrumental [in] the pipeline’s construction. First Nations will have the opportunity to own 10 percent of the total project.”)
Vanessa Gray, a divestment campaign coordinator at ICA, also presented at the webinar, and I spoke with her one-on-one on Zoom the following day. “There are baby steps to be made for a more just future,” she says. “And one of those steps is ensuring that projects involve free, prior and informed consent for Indigenous communities.”
Free, prior and informed consent sounds like a small ask, but time is money, after all, and we’re talking about a business culture that loves the phrase “it’s better to get forgiveness than permission.” The trouble is, forgiveness is one thing, but a damaged and polluted ecosystem is another. If you break someone’s car, or computer, or couch, you can replace it. You can’t say the same for a river or a forest.
What Gray and her colleagues at ICA are pushing for is Indigenous divestment, which she defines as very similar to fossil fuel divestment—the opposite of investment, the term means removing your capital from investment vehicles (in this case, ones that do not respect Indigenous sovereignty). “Environmental protections are only a small part of the issue,” she says. “It's one thing to build a park instead of a mine. It's another thing to not criminalize Indigenous people for being on our own territories, and to not displace Indigenous peoples for protecting our waters and lands against a pipeline without opportunity.”
Why where you bank matters
Evelyn Austin is executive director of the non-profit Banking on a Better Future, a youth-led organization campaigning for “an end to all financial support for the fossil fuel industry by the big five Canadian banks.” The group has been encouraging Canadians to shift to credit unions, and is currently focused on trying to get RBC off university campuses—where they often have a strong presence—and to get student unions and other groups to move their money out of the big banks.
There are two main reasons to make the switch, Austin says. The first is to put pressure on banks, who naturally don’t want to lose customers. “Customers are a small portion of their overall profit [for],” she says. “But they do rely on customer deposits for their loans to be profitable. So if enough people were to switch, it could signal to them that it could have a broader impact on all the other work that they do.”
The second reason is more far-reaching—it doesn’t tackle just the climate crisis, but any other problems tied to a bank’s raison d’être of prioritizing profit. Credit unions are inherently more democratic, Austin says. At banks, resolutions and changes come from shareholders. “At a credit union, it's one member, one vote,” she says. “It doesn't matter how much you have in your account—you get an equal vote to everyone else.”
How to make the switch
What’s the difference between a bank and a credit union? According to an article on Mydoh.ca—which, funnily enough, is a brand owned by RBC to help parents teach kids about money—the biggest one is that banks are for profit and credit unions are not. Credit unions are actually owned by their members (that is, the people who bank with them) and are sometimes also referred to as financial co-ops.
Just like with banks, credit union deposits are insured, and credit unions offer investment products, mortgages and financial planning services. Also, their rates on high-interest savings accounts tend to be quite a bit higher, which is a bonus. I make 2.5 percent right now on the credit union account that I use for my everyday banking; a lot better than the 0 percent RBC pays on my chequing account. The only downside? Credit unions have fewer branches, and tend to be concentrated in one geographic area.
There are credit unions small and large (but not that large) across the country. Banking on a Better Future maintains a list of some options with information, where available, about their fossil fuel policies.
Just being a credit union doesn’t mean they don’t invest in fossil fuels, notes Tim Nash of Good Investing, a company that helps Canadians make intentional investing choices. (Nash blogged about how to fire your bank way back in 2016.) This is because they tend to lend money to small businesses, which, especially in some regions, might be linked to the fossil fuel industry. “However,” he says, “I'm very confident that they will have a tiny fraction of fossil fuel loans compared to anyone else.”
A note about credit cards
Nash points out that your choice of credit card is less impactful climate-wise than your chequing or savings account, since you’re borrowing the money rather than facilitating loans with your deposits. “I care more about where you keep your deposits,” he says. “And less about where you hold your debt.” For the sake of your credit score, it’s a good idea to keep your oldest credit card alive, even if you’re not using it.
When you’re ready to begin transitioning your banking, Austin suggests finding a credit union in your region that fits your values and needs, and opening an account. You can start by moving some money over and setting up bill payments, direct deposits (like your paycheque and tax returns) and, if you roll that way, Interac auto-deposit. Don’t close the old account right away, especially if you’ve had it for a long time and might have missed some potential future transactions. (I once got a surprise payment from an old client something like a decade after I’d last worked for them.) And it’s not a big deal if you decide not to close it at all. “I know a lot of people who will keep one account at a bank, but move most of their funds to another institution,” Austin says. “Whatever works for you.”
Most importantly, tell your bank what you’re doing and why. “Make sure to communicate with your bank while you're doing this, and set up a few meetings to discuss your concerns before switching,” Austin suggests, or if you can’t go in in-person, get in touch via phone or email. Gray notes that spreading awareness is a key part of divestment, and that more Canadians need to know what’s going on. Chief Na’Moks echoes this call to action. “We do what we do for everybody,” he said in the ICA webinar. “What we ask is for you to stand up, use your voice, be united. Don’t be afraid of them.”
More ways to fight the climate crisis
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