Over the past few years, a steady stream of studies has revealed the inexorable link between banking and climate change. Banks use customer deposits to make loans, often to climate-damaging businesses, most notably the fossil fuel industry. A recent Rainforest Action Network study, for example, found that the world’s 60 largest banks have financed the fossil fuel industry to the tune of $4.6 trillion in the six years since the adoption of the Paris Agreement (with $742 billion in financing fossil fuels in 2021 alone).
And the problem does not stop at the banks. According a global S&P reportUS insurance companies used customer premiums to invest $582 billion in fossil fuels in 2019 alone.
In 2019, JP McNeill founded a sustainable banking service Andō to help resolve these issues. Fintech is the only banking service that invests every cent of customers’ money in projects and companies committed to the fight against climate change. Currently, that means partnering with community banks to finance solar installations across the country, with plans to expand into other types of sustainable lending in the near future. McNeill created Ando after a personal quest to reduce his family’s carbon emissions and the subsequent realization of the harmfulness of his personal banking habits.
So far, Ando has 70,000 users who together have funded millions of dollars in loans for solar installations. But they’re just getting started: Earlier this year, Certified B Corporation partnered with insurance companies like Nationwide and Allstate to introduce the first sustainable insurance offering. I sat down with McNeill to find out more.
Christopher Marquis: When and why did you build Ando?
JP McNeil: We launched Ando in June 2019. Shortly before, I explained to my 13-year-old son how banking works. I told him that we consumers hold the power, that our money helps climate-damaging industries to operate and grow. And that by adding transparency and choice to the banking sector, we could create transformative change and potentially reverse climate change. It only takes a few minutes to open a sustainable bank account with Ando. It also takes a few minutes to purchase a durable insurance policy. These are small actions that everyone can take that, collectively, will lead to real change.
We have two main objectives. First: to provide free banking services that enable millions of people to earn and save money while living sustainably. Second: Create a pathway for consumers to help improve the functioning of the banking and insurance sectors.
Marquis: How is Ando different from traditional banks?
McNeil: On the surface, much of what we offer is the same. Ando offers checking and savings accounts, Visa debit cards, access to a free nationwide network of ATMs, bill payment, deposits. But some offers are the best in the business, like unlimited 1.5% cash back with every debit card purchase, overdraft protection up to $200, and first paydays.
And then there are two completely unique practices that no other bank offers. The first is transparency. People should know what their bank does with their money. It’s not just sitting in a vault; it is our money that allows the banks to make loans. If we have $5,000 in our Chase bank account, Chase can make loans worth $5,000. Without transparency, your money can fund all kinds of industries and businesses. Fossil fuels, guns, pesticides, whatever.
Money is power. Banks use it for their own interests, but those interests may not be aligned with the interests of the person holding the current account. Transparency is crucial in any relationship and currently there is no transparency in banking. Ando is the first bank to show customers where their money is going.
The second differentiator is that Ando only uses customer deposits to fund loans that help the environment and advance a sustainable economy.
Marquis: What were some of the challenges in building a sustainable bank from the ground up?
McNeil: People don’t realize how much their money contributes to climate change. Consumer education is our most important (and often most difficult) challenge. The top 3% of banks in the United States hold $12 trillion of our money and the remaining 97% have $6 trillion. And before Ando, zero percent of them told customers what they were doing with customer deposits. If we want to create a sustainable and prosperous economy, we must first recognize that we all allow this to happen. Money is power, but most consumers have no idea how much power they wield.
Marquis: How do you find banking partners?
McNeil: We continually have conversations with banks and credit unions across the country. They share with us the types of sustainable loan programs they already have and how partnering with Ando will help them grow these initiatives. Today, 100% of our clients’ deposits contribute to the financing of renewable energy loans. We’re looking to expand into a wider variety of carbon-positive loans, so we also plan to partner with banks that offer different types of sustainable loans (like regenerative agriculture, electric vehicles, and green buildings).
Marquis: How do you plan to develop the company? How many users do you have today?
McNeil: We currently have 70,000 customers. Word of mouth and articles like this are the best ways for people to learn about Ando and sustainable banking. We offer incentives for current users to refer friends, and we also partner with influencers who care about climate change and want to do something about it. One of the big advantages of Ando is that anyone can be part of the solution, both in terms of participation and helping to spread information.
Marquis: Do you think the banking industry as a whole will start implementing real change?
McNeil: The banking industry as a whole won’t implement real change until the government tells it to (which is probably decades away) or it starts to see a decline in its deposit base. And I think we really only need a 5-10% decrease in deposits for them to change. Customers can truly have an incredible impact on a global industry.
Marquis: What about insurance? Why did you decide to get into this industry?
McNeil: Banking and insurance are the main sources of capital in our economy, and insurance is very similar to banking. We hand over our money in the form of a car or home insurance payment, and the insurance industry is free to use that money as it sees fit. There are 200 million auto insurance policies and 100 million home insurance policies in the United States. We pump about half a billion dollars into the insurance industry each year, with no transparency as to where that money is invested. About three-quarters of what we give to the insurance industry is invested. Insurers finance the fossil fuel industry, the gun industry, the pesticides…basically anything the banking sector finances. The same kind of transparency that we brought to banking should also apply to insurance.