Do Banks Have a Responsibility to Combat Climate Change?

Traditional banks have received criticism for their role in funding the fossil fuel sector, with a report revealing that global banks paid $5.5tn into the industry over the past seven years. However, digital banks such as Kroo are taking proactive measures towards sustainability, calling on incumbent banks to do more to tackle the climate crisis. Many consumers are showing preference for sustainable practices when choosing banks or financial institutions, with 67% of consumers saying they want their bank to prioritise sustainability. The rise of ethical consumerism and regulatory changes, such as the International Financial Reporting Standards' Sustainability Disclosure Standards, are exerting pressure on banks to play a vital part in fighting global warming. While it will take time for banks to transition to sustainable technologies, sustainable practices need to become fundamentally important and measurable to assess impact and drive change. The financial industry holds the key to driving meaningful change, with control over who receives funding and supporting services, making it essential for the industry to get serious about sustainability.

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