In recent years, a steady stream of research has uncovered the inexorable link between banking and climate change. Banks use customer deposits to lend, often to climate-damaging companies, especially the fossil fuel industry. A recent Rainforest Action Network study, for example, found it 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 fossil fuel financing in 2021 alone).
And the problem doesn’t stop with banking. According to a report from S&P globalUS insurance companies have used customers’ premiums to invest $582 billion in fossil fuels in 2019 alone.
In 2019, JP McNeill founded sustainable banking Ando with the aim of helping to solve these problems. Fintech is the only banking service that invests every cent of customers’ money in projects and companies committed to fighting climate change. Right now, that means partnering with community banks to fund solar installations across the country, with plans to expand into other types of sustainable loans in the near future. McNeill created Ando after a personal quest to reduce his family’s carbon emissions and the subsequent realization of how harmful his personal banking habits were.
So far, Ando has 70,000 users who have collectively funded millions of dollars in solar facility loans. But they’re just getting started: Earlier this year, the certified B Corporation partnered with insurance companies like Nationwide and Allstate in a mission 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?
J.P. McNeill: We launched Ando in June 2019. Not long before that, I had explained to my 13-year-old son how the banking industry works. I told him that we consumers have the power, that our money helps climate-damaging industries function and grow. And that by adding transparency and choice to the banking sector, we can create transformative change and ultimately reverse climate change. Opening a sustainable bank account with Ando takes a few minutes. It also takes a few minutes to take out sustainable insurance. These are small actions that anyone can take and that together will lead to real change.
We have two main goals. First, to offer free banking that allows millions of people to earn and save money while living sustainably. Second, create a pathway for consumers to help improve banking and insurance operations.
Marquis: How does Ando differ from traditional sofas?
McNeill: At first glance, much of what we offer is the same. Ando offers checking and savings accounts, Visa debit cards, access to a free nationwide ATM network, bill pay, deposits. But some offers are the best in the business, like 1.5% unlimited cash back on any debit card purchase, overdraft protection up to $200, and early payday.
And then there are two completely unique practices that no other bank offers. The first is transparency. People need to know what their bank is doing with their money. It’s not just in a vault; our money allows banks to lend. If we have $5,000 in our Chase checking account, Chase can make $5,000 in loans. Without transparency, your money can fund all kinds of industries and businesses. Fossil fuels, weapons, pesticides, whatever.
Money is power. Banks use it for their own benefit, but those interests may not align with the interests of the person with the checking account. Transparency is crucial in any relationship and right now 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 promote a sustainable economy.
Marquis: What were some of the challenges in building a sustainable bank from the ground up?
McNeill: People don’t realize how much their money contributes to climate change. Educating consumers is our most important (and often most difficult) challenge. The top three percent of banks in the United States have $12 trillion of our money and the other 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 thriving sustainable economy, we must first recognize that we are making all of this possible. Money is power, but most consumers have no idea how much power they have.
Marquis: How do you find banking partners?
McNeill: We are in constant dialogue with banks and credit unions across the country. They share with us what types of sustainable lending programs they already have and how partnering with Ando will help them grow those initiatives. Today, 100% of our customers’ deposits help fund renewable energy loans. We want to expand to a wider variety of carbon positive loans, so the plan is to also partner with banks that provide different types of sustainable loans (such as regenerative agriculture, electric vehicles and green buildings).
Marquis: How do you plan to grow the business? How many users do you have today?
McNeill: 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 provide incentives for current users to refer friends, and we also partner with influencers who are concerned about climate change and want to do something about it. One of the great things about Ando is that everyone can be a part of the solution, both by participating and by helping to spread the word.
Marquis: Do you think the larger banking sector is going to make real changes?
McNeill: The larger banking sector will not make any real changes until the government tells them to (which will probably happen for decades to come) or if they start to see a decline in their deposit base. And I think we really only need a 5-10% decrease in deposits to change them. Customers can really have an incredible impact on a global industry.
Marquis: What about insurance – why did you decide to break into this industry?
McNeill: Banking and insurance are our economy’s largest sources of capital, and insurance is very similar to banking. We hand over our money in the form of auto or homeowner insurance, and the insurance industry is free to use that money however they want. There are 200 million auto insurance policies and 100 million homeowners insurance policies in the United States. We pump about half a billion dollars into the insurance industry every year, with no transparency about where that money is invested. About three quarters of what we give the insurance industry is invested. Insurance companies finance the fossil fuel industry, the arms industry, pesticides… basically everything the banking sector finances. The same kind of transparency that we’ve brought to banking should be applied to insurance as well.