The banks driving sustainable finance in 2020

The banks driving sustainable finance in 2020

Australia is experiencing unprecedented bushfires across multiple states, and there are still two months of the Summer season left. Whilst many organisations have been helping victims and volunteers with donations, the economic and environmental impact is far-reaching.

The economic cost of the fires to the Australian economy has already topped $2 billion, and these fires show no sign of slowing down. Sadly, it’s likely this figure will continue to rise. This estimated cost has been calculated using elements already measured by the government, including income from tourism, retail and agriculture.

However, as Michael Pascoe points out, we seem to be forgetting the wider cost of these fires. “The half-billion animals reportedly killed and the many millions of trees – what were they worth?” Pascoe continues, “Clean water, clean air, sustainable ecosystems – all have massive value, obvious value to most people, but do we price them in our budgeting?”

The simple answer from a governmental perspective is no. As it stands, current accounting methods and standards cannot capture environmental impact. However not all is lost, as organisations lead the charge to reduce greenhouse gas emissions and promote sustainable finance.

In fact, there is a banking initiative in the Australian financial industry that is working to align our finance sector, and follow in the footsteps of the EU’s High Level Expert Group on Sustainable Finance and the UK’s Green Finance Taskforce.

Introducing the Australian Sustainable Finance Initiative (ASFI)

Born from industry discussions at a United Nations Environment Programme Finance Initiative (UNEP FI) event in 2018, the Australian Sustainable Finance Initiative (ASFI) is the first of its kind in Australia.

The ASFI released its first progress report on the 11th December 2019, and has confirmed in this report that it will next produce an interim report, which will form the basis for the Sustainable Finance Roadmap, to be delivered in 2020.

This roadmap is to ensure the financial industry supports greater social, environmental and economic outcomes in Australia. It’s to allow the sector to transition to a more sustainable economy, consistent with global goals including the Paris Agreement on climate change, and the UN Sustainable Development Goals.

Since launch, the initiative has received financial support from Bank Australia, Australian Ethical Investment, Cbus, Insurance Australia Group, QBE Insurance Group, National Australia Bank, ANZ, Commonwealth Bank of Australia and Westpac Banking Corporation.

The ASFI has adopted a collaborative process that is overseen by a Steering Committee of both members and observers. This committee consists of senior financial services, academic and civil society representatives.

Members include the likes of Emma Herd, Investor Group on Climate Change CEO; Sarah Barker, Head of Climate Risk at Minter Ellison; and Dr John Hewson AM, the Chairman at the Business Council for Sustainable Development Australia. Observers feature Eric Usher, Head of the UN Environment Program Finance Initiative; Geoff Summerhayes, Executive Board Member of Australian Prudential Regulation Authority (APRA), and Executive Leaders from the Australian Securities and Investments Commission (ASIC).

Find the full list of steering committee members and observers here.

What is sustainable finance?

The term sustainable means “able to continue over a period of time.” Sustainable finance is about ensuring the financial sector survives the impact of climate change.

The ASFI states that “the health, sustainability and stability of our economy is inextricably linked with the health, sustainability and stability of our people, society and the natural systems on which we all depend.”

By actively realigning the systems that underpin the Australian economy to support the natural ecosystem, the ASFI and other organisations can ensure Australia continues to prosper in the 21st century and the centuries that follow.

Banks start to refuse fossil fuels

Sweden's Central Bank (Riksbank) made headlines late last year when it decided to take action against countries with high Greenhouse Gas (GHG) Emissions.

Australia was one of these countries, and Riksbank sold the bonds it owned from Western Australia and Queensland. It also took a stand against Canada, selling the bonds it owned in the oil-rich province of Alberta.

Goldman Sachs followed suit, not by selling bonds, but by developing and sharing a new environmental policy. A policy that accepted climate change as a scientific fact, and outlined that it would no longer finance new drilling for oil in the Arctic.

Responsible banking in Australia

If you’re looking to reduce your financial carbon footprint, there are many lenders going green in support of eco conscious spending.

Green personal loans are also becoming popular as they help Australians update their homes with solar panels, energy efficient hot water systems or other renewable energy products to reduce GHG emissions.

However, one of the best ways to reduce your carbon footprint is by supporting banks that do not invest in the fossil fuel industry.

Bank Australia, for example, refuses to invest in fossil fuels, intensive animal farming, live exports, gambling, arms or tobacco companies. It also has a Responsible Banking Policy, published online, and the bank is focused on using money customers deposit to support people, community organisations and businesses.

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Learn more about bank accounts

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

Do you need a bank account to get a credit card?

To get a credit card, you need to show proof of income, which will almost certainly require you to have a bank account.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

How long does it take to open a bank account?

The length of time it takes to open a bank account varies, depending on whether you want to open it online or in person.

Online

Most banks and credit unions have simple online applications that usually take no more than 10 minutes to fill out. It can be especially fast if you have your identification documents like your driver’s licence and passport handy. Sometimes you will instantly be approved and the bank account opened. However, depending on the financial institution, it may take a day or so to be processed and your account number issued. Your account information and ATM or debit card will then be mailed to you, which usually takes between five to 10 days.

In person

If you decide to go into a branch or office to open a bank account, it may take about half an hour. Make sure you bring your identification documents with you. Also book an appointment if you can, otherwise you might be forced to wait in line. Sometimes your ATM or debit card will be issued on the spot, otherwise you’ll need to wait for one to arrive by mail, which usually takes between five to 10 days.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

How do I open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

Which bank is best for business accounts?

Unfortunately, there’s no definitive answer to the question of which bank is best for business accounts. That’s because ‘best’ will differ from customer to customer, depending on their unique circumstances. These include not only your company’s financial position, but also its size, its age and the sector in which it operates. Another factor to consider is what features you want in a bank account. Your business may require different features than another business; and your business may require different features tomorrow than it does today.

The best thing to do is to thoroughly research the market before opening a business account. And when you do open an account, you should reassess your options every year or two, because the market moves quickly. A particular bank might offer the best account today, but be surpassed by one or several rivals tomorrow.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.