Sustainable Home Loans - December 2022
December 7, 2022 / Written by Rich Harvey
By Guest Blogger, Marisa Hoffenberg, Director,
Sustainable Home Loans
Are we the biggest green washers?
Words, like clothes or food, have fashions. Right now, the ‘in’ word is green washing. In the simplest terms: green washing is when an organisation spends more time and money on marketing itself on being environmentally friendly than on actually minimizing its environmental impact. Greenwashing is considered unethical as it misleads consumers that are genuinely seeking environmentally friendly products or services. Brands from Apple, to Starbucks to Zara have all been accused of green washing.
So, when I stood in the coffee que at 9am with all the other ponytails and their keep cups, the thought crossed my mind ‘Are we the biggest green washers of all?’
Let’s put this in perspective a paper cup contributes about 10.2 grams of CO2 to the world which is quite minimal. Banks in Australia, on the other hand, loaned: $8.9 billion* to the dirty coal, oil and gas industries – which is huge. While a keep cup is clearly visible, you don’t wear the name of your bank on your TShirt. Are we just concerned about the image of being green? If we are really concerned about climate change, surely we should focus on the banks.
Not only does the banking and finance sector represent about a quarter of the ASX but they indirectly control the rest of the economy by deciding which companies they invest in or lend to. While some banks are indiscriminate in which businesses they fund, others are more concerned about the communities in which they operate or at least see climate as a major risk which must be factored into their investment decisions. Prior to investing in or lending to a company they consider their greenhouse gas emissions, water and waste management and how much they contribute to climate risk to determine their future sustainability.
Why are we so obsessed with keep cups but when it comes to the major financial decisions in our lives, such as our mortgage, we don’t make any effort to seek a sustainable solution?
The first concern is cost.
Or more accurately – perception of cost. I am not sure how we jumped from: organic food is more expensive to therefore a sustainable loan must be more expensive. In practice sustainability is determined by the banks internal policies and practices and has no impact on interest rates they offer to borrowers. Sustainable banks are more likely to be forward thinking, dynamic organisations.
If we take it even further, the purpose of green loans is to encourage the building of more energy efficient homes – these loans come with significant interest rate discounts.
Our 2nd concern is complexity
With a mountain of jargon, and a million different options, choosing the right mortgage provider is difficult enough, now we need to add in a whole other dimension – sustainability, which is just as complex. I have been involved in sustainable finance for fifteen years and it is a bit of a ‘mine field’, so just like you would engage an architect or engineer in your project, it makes sense to see a specialist sustainable mortgage broker.
I love Sydney, I love being able to enjoy my coffee in the sunshine under the beautiful blue sky. Fires, floods and disease have been sufficient warning signs to make us realise that, while every little bit counts, keep cups are just not enough. To make real change we have to take sustainability into account in larger decisions such as our mortgage.
Imagine if everyone who read this article placed their mortgage at a sustainable bank, then they forwarded it to their friends and colleagues who in turn placed their mortgages at a sustainable banks. We could have a real impact. I can imagine these people’s grandkids’ running in and out of the waves on Bondi, their smiles as a thank you for making the effort to enable them to enjoy this beautiful city.
*(Market Forces 2020)
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