Green Banks in Australia - Options Worth Considering
This post was last updated in 2023
Green banking has become an increasingly popular topic in recent years, as more and more people look to align their financial activities with their environmental values.
If you are one of these people and you are looking for a green bank that operates in Australia, then this blog post will provide the information you need.
In this blog post, I answer the following questions:
In this blog post, you’ll find key information on some of the most well-known green banks in Australia – information pulled from financial reports, news reports and websites – summarising the key points that make these banks green.
Because no industry standard exists around “green banking”, you can use this information to judge for yourself how strong the bank’s green credentials truly are.
Are there any green banks in Australia?
You can find green banks in Australia – in fact, you will find almost all banks in Australia are “green” to some degree. All the major banks in Australia invest in climate mitigation strategies and offer customers environmentally friendly products. But it is the smaller institutions that do much more.
In the blog post, Green Banking – Essential Characteristics To Look Out For, I outlined four characteristics that consumers expect green banks to exhibit. These are:
- They conduct themselves in a way that reduces emissions, minimises waste and improves efficiency in the use of natural resources
- They offer products and services that minimise waste, has a low carbon footprint or encourage environmentally friendly practices
- They divest away from activities that contribute towards climate change or negatively impact our natural resources
- They invest in activities that mitigate climate change and encourage efficient use of our natural resources
Banks in Australia exhibit these characteristics to varying degrees.
When it comes to products and services that minimise waste or encourage environmentally friendly practices, all the major banks offer these.
The major banks in Australia – CBA, NAB, ANZ, Westpac and Macquarie Bank – have realised there is a shift in the market, with more and more consumers considering the environmental impact of their product choices, including banking products.
So these banks now offer products like green home loans, which offer a lower rate to purchase homes that are energy efficient, or green car loans, to help fund the purchase of electric vehicles.
The range of products and services on offer by some of these banks was covered in the blog post, Green Banking Products – Align Your Money with Your Values.
These banks also invest the most in renewable energy and other climate mitigation strategies. As mentioned in Which Banks Do – and Don’t – Invest in Fossil Fuels, these big banks have the capital to fund these key projects at scale, while other smaller banks and credit unions do not have the funds to match these levels of investment.
However, I would not classify these larger banks as green because they are still heavily invested in the fossil fuel industry and therefore providing the funds to allow this industry to continue its operations.
As covered in the blog post Which Banks Do – and Don’t – Invest in Fossil Fuels, the five major banks in Australia are the main financiers behind many of the fossil fuel projects in Australia.
And while many of these banks have committed to no longer funding thermal coal (by 2030 in most cases), they are less than ambitious in reducing investment in other fossil fuels, particularly gas.
So these banks do not meet the third point mentioned above – that they divest away from activities that contribute towards climate change or negatively impact our natural resources.
The closest we have to green banks in Australia are smaller financial institutions that have a strong environmental focus. These banks do not fund fossil fuel companies; they operate in a way that reduces their impact on the environment and many offer products and services that are focused on helping you reduce your impact on the environment.
The one thing these banks do not do is invest in renewable or clean energy projects at a large scale.
But these banks generally do not engage in commercial lending. The few that do, are focused on small community projects. So investing in large-scale renewables projects is not a part of their business model.
For more information on this, check out Which Banks Do – and Don’t – Invest in Fossil Fuels.
Which Australian banks are green?
The following banks can be considered “green”: Teachers Mutual, Bank Australia, Bendigo and Adelaide Bank and Great Southern Bank, to name a few. Other sites will note Suncorp in the list, however since it may be taken over by ANZ very soon, this will no longer be the case.
Want to know more about the banks listed above? Below I have summarised some information about these banks and their green credentials.
Before getting onto the summary, here is an explanation of some of the certifications and awards mentioned:
| Name | Description |
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Finder (a product comparison website) awards this to retail banks based on their environmental impact and the impact of their investments. |
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B Corp certification is a third-party certification process that assesses companies' social sustainability and environmental performance standards and accountability standards. |
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GABV is an independent association of 'values-based banks' with a shared mission to use finance to deliver environmental, social, and corporate governance (ESG) positive outcomes. |
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Ethisphere is a for-profit company that defines and measures corporate ethical standards and recognizes companies that excel and promote best practices in corporate ethics |
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RIAA certification is provided to investment products that have been assessed and verified as responsible or ethical. |
So now onto some of the most well-known green banks in Australia and what makes them so green 🌿
- One of the largest mutual banks in Australia with over 230,000 members and more than $10 billion in assets.
- Subsidiaries include Health Professionals Bank, Firefighters Mutual Bank, UniBank and Hiver
- Finders Green Bank of the Year 2022
- Certified B Corporation
- Member of Global Alliance Banking Values
- One of five banks in the world to be named Ethisphere Worlds Most Ethical Companies 2014 – 2022
- 98% of products are Certified as Responsible Investments by RIAA (credit cards, cannot be certified by RIAA which is why it’s not 100%).
- The Bank does not take money from, or lend to, the fossil fuel industry.
- Since 2012, the Bank and its subsidiary are net zero and carbon neutral for Scope 1 (vehicle fuel and natural gas) and Scope 2 (electricity) greenhouse gas (GHG) emissions.
- 100% of the Banks’ electricity consumption is from renewable energy – 99% from green power, with 1% from offsets. This includes 19% of electricity sourced from solar PV on their office roofs.
- 100% customer-owned bank with over 184,000 customers and more than $9.7 billion in assets.
- Certified B Corporation
- Member of Global Alliance Banking Values
- They do not provide funding to the fossil fuel industry
- In 2022 they invested $791.6 million in green homes, the development of new green properties, electric vehicles, onsite renewables and green bonds.
- Since 2004, they have been measuring and offsetting the emissions associated with every car loan, for the life of the loan.
- In 2022 they provided $550k of after-tax profits to conservations projects and climate mitigation projects (further grants are noted below)
- They are certified carbon neutral
- They have a target to reach net zero by 2023 across not just their operations but their lending and investment portfolios as well
- Since 2020 all electricity is sourced from renewable sources.
- Around 2.2 million customers and over $71 billion in assets
- They do not provide any direct funding to the fossil fuel industry
- They are focused on supporting customers and communities to build climate change and disaster resilience. Some initiatives in this space include: tree planting initiative, bushfire preparedness program, solar installation, investing in reforestation or other biodiversity projects and climate-related opportunity identification
- Over half a million dollars has been donated during its eight-year partnership with Greening Australia. This money has gone towards helping the country’s natural habitat survive and thrive.
- They are certified carbon neutral
- 51 branches and office locations have rooftop solar installed bringing the portion of renewables to 40%
- Around 382,000 customers and over $18 billion in assets.
- Subsidiaries include CUA Health Limited, Credicorp Insurance Pty Ltd, CUA Management Pty Ltd and Credicorp Finance Pty Ltd
- They lend to retail customers only so do not lend to fossil fuel companies.
- They are one of the first banks in Australia to report using the Partnership for Carbon Accounting Financials (PCAF) framework. PCAF is an industry-led global partnership of financial institutions working together to implement a consistent approach to GHG emissions disclosures associated with investments and lending activities.
- The first customer-owned bank to publish a Taskforce on Climate-Related Financial Disclosures (TCFD) report
- They are certified carbon neutral
- They have pledged to reach net zero by 2040
And these are not the only banks worth considering.
There are quite a few banks in Australia that do not invest in fossil fuels. Not all are actively reducing carbon emissions from their business operations nor are they in a position to offer specialised green products or funding to climate mitigation projects, but they are still worth considering.
Based on information from the Market Forces website, I have compiled a list of banks, credit unions and building societies that could be considered “green banks”.
You can get a copy of this list by entering your details below:
You can get a copy of this list by entering your details below:
In this list, you will also find the home loan rates and savings interest rates offered by each of these banks (as of August 2022).
Which Australian bank is the greenest?
According to Finder, Teachers Mutual is the greenest bank in Australia. In 2022 the bank was the winner of Finder’s Green Bank of the Year award because of its sustainable financing approach and how the bank strives to operate with minimal impact on the environment.
The full criteria used by Finder is summarised in the table below:
This mirrors the definition of green banking noted at the beginning of this blog post. However, there is an additional element – environmental targets and reporting.
With this, Finder looks at targets the banks set for things like emissions and renewable energy usage. They also looked at the bank’s approach to reporting on its environmental impacts – governance issues that are important to assess when determining which banks have the strongest environmental credentials.
It should be noted that the finalists are based on submissions made – it does not involve an independent review of the whole market (which would be a HUGE task of course) but relies on banks placing a submission with Finder, presumably answering questions relating to the assessment criteria noted above. Those that score above a certain level are selected as finalists.
So there wasn’t a lot of competition to be awarded the best green bank in Australia! And there is no information available on how many submissions were received in this category so it’s entirely possible there were only two submissions. We just don’t know.
It’s just something to keep in mind.
However, all things considered, I don’t think Finder made the wrong choice – Teachers Mutual does seem like the greenest bank out there, as verified by various third-party assessments mentioned in the previous section. And it is apparent in how the bank operates and conducts its business – down to the tiniest detail.
Here are some further details about this bank and how its operations are in line with what you would expect from the greenest bank in Australia:
- From 2016 to 2022 annual Scope 1 and 2 GHG emissions reduced by 56% while total assets increased by 88% and members increased by 30%.
- They have invested $938,000 in emissions reduction measures at its buildings.
- 5-star WELS taps are installed in all upgrades.
- Gardens at Homebush and Western Sydney Regional offices have been replaced with native plants that do not need watering.
- Paper use per employee reduced from 571 to 22.8 (kg/FTE).
- 100% of paper is sourced from FSC or PEFC. Paper consumption was reduced by 66% from 32.3 tonnes to 12.4 tonnes.
- 54% of waste is diverted from landfill.
- They have set ambitious goals for their car fleet to be 50% electric vehicles (EVs) by 2025 and 100% by 2027.
And importantly, ESG issues are integrated into their business practices. They are written in their lending risk and treasury credit risk policies and sustainability is embedded in key KPIs.
The one downside to Teachers Mutual is that the bank is only for those in the education sector.
Very limiting.
However, the bank does have several subsidiaries and maybe one applies to you:
- Health Professionals Bank – for current or retired employees of the Australian health sector and their families
- Firefighters Mutual Bank – for current or retired employees of, or current volunteers with, a fire and/or emergency service and their families
- UniBank – for citizens or permanent residents of Australia who are current or retired employees, graduates and students of an Australian university or are family members of members
- Hiver – a digital bank for essential works, open to employees of the education sector, healthcare sector, emergency services, graduates of an Australian University or currently studying in an Australian university or family members of members
As they are wholly owned subsidiaries, all the information mentioned previously about Teachers Mutual applies to these banks as well.
When I was looking to switch banks, Teachers Mutual ended up being the one that I went with. It offered one of the lowest home loan rates out there. I have been with them for 3 years now and have no complaints.
If you want to know more about the process I went through to decide which bank to go with, you can read about that here: How to Go Green in Banking and Choose the Best Bank For You
Why give your money to an institution that supports activities that harm the environment if you don’t have to?
xxx Tahsin
After more information? You may be interested in....
7 of the Best Australian Banks – For You and the Environment – there are 7 banks worth looking into if you care about the environment and key information on these is outlined here
How to Go Green in Banking and Choose the Best Bank For You – for a step-by-step process to help you choose the best green bank for you
What is Green Banking and What to Look Out For – for a definition of green, sustainable, ethical and eco-friendly banking, giving you clues into what to look out for
Green Banking – Essential Characteristics To Look Out For – outlining the characteristics of and features of green banking to look out for plus what it means to be a net zero bank
Why Green Banking Matters: Creating a Sustainable Future – if you are wondering if it is worth looking into green banking, you will find some honest answers here
Green Banking Products – Align Your Money with Your Values – for a summary of all the different green branking products out there, with links to banks that offer these
Which Banks Do – and Don’t – Invest in Fossil Fuels – for a summary of which Australian banks do and don’t invest in fossil fuels and those that do invest in renewable energy
Greenwashing? The Big Four Banks and Climate Change – for information on CBA, NAB, Westpac and ANZ outlining their current position and past actions relating to climate change
Going Green – Environmentally Friendly Banks in Australia – for further information on Bank Australia as well as CBA and Westpac, looking at their environmental policies
