Australia’s green banks 2023
Want to bank sustainably? Look no further than Finder's Green Bank of the Year winner and finalists for 2023.
The cost of living crisis has made it harder to spend more money on greener products, with 47% of Australians saying it has affected their sustainability choices in the Finder Green Report for 2023. Switching to a sustainable bank is one way to put your money towards ethical and environmental causes without needing to make a purchase.
The Finder Green Awards help you compare and choose a greener bank, by considering factors including greenhouse gas emissions, renewable energy use and waste management. Here are details for the banks that were recognised in the Green Bank of the Year category for 2023.
2023 Finder Green Awards
Winner: Green Bank of the Year
Bank Australia is the 2023 Green Bank of the Year, after being a finalist in 2022 and a previous winner in this category. It operates with 100% renewable energy, has B Corp certification and is part of the Global Alliance for Banking on Values. It also scored well for its clear policies and documentation, including Science Based Targets initiatives and Responsible Banking Policy. It also offers sustainable-focused products including its clean energy home loans and low emissions vehicle car loan option.
Highly Commended: Teachers Mutual Bank Limited
Teachers Mutual Bank Limited was recognised as highly commended in this category, with net zero operations and B Corp certification.
It also scored highly for being the only Australian bank with Responsible Investment Association of Australasia (RIAA) certification for every mortgage, wholesale and retail product it offers. It was also the Finder Green Bank the Year for 2022.
Green Bank of the Year Finalist 2023
AMP was named as a finalist in the Green Bank of the Year category for 2023. The bank is committed to being a net zero business by 2050. It will also be powered 100% by renewable energy by 2030. It also released a comprehensive 2022 Sustainability Report and has a list of companies it does not invest in.
What is green banking?
Green banking refers to any banking activities that are done in a sustainable way that aims to reduce their impact on the environment. This could mean a bank using solar panels to power their stores or it could mean the bank refusing to lend money to fossil fuel companies. The end goal is to help to create a world where the impacts of climate change are minimised.
The bank category was an important one for us when we started to build the Finder Green Awards. A lot of the products we compare here at Finder, from home loans to credit cards to savings accounts, are provided by banks. Banks also represent a high proportion of the biggest companies in Australia and almost certainly provide banking services to the rest. As a result, the decisions that banks in Australia make regarding climate change can have a huge impact.
The good news is that many banks in Australia are taking action to reduce their environmental impact. The biggest banks have whole teams working on their sustainability strategies whilst some of the lesser-known brands are building their whole customer offering around doing the right thing by the environment.
However, as with any sector, it can sometimes be difficult to cut through the noise to understand which banks are actually doing their bit to be sustainable and which banks are just talking a good game.
What makes a bank green?
The Finder Green Awards consider a bank's current environmental impact and the impact of its investments to determine how "green" it is. The specific details considered for the awards include:
- The bank's current environmental performance (23% of overall score)
Finder's methodology assigns almost a quarter of the overall scoring for metrics related to the direct environmental impact that the bank has. This includes things like emissions, renewable energy usage and waste related to their branches and offices.
- Environmental targets and reporting (11% of overall score)
We assess the bank's future plans towards sustainability, including targets for emissions, renewable energy usage and waste reduction. We also look at the bank's approach to reporting on its environmental impact, with higher points awarded for greater transparency and external benchmarks or accreditation.
- The bank's approach to sustainable financing (52% of overall score)
More than half of the scoring is based on the bank's investment and lending decisions. This is because banks play an important role in facilitating climate action in the rest of the economy with financing decisions being central to this. We look closely at whether the bank included environmental factors when deciding which companies they give loans to or invest in. This could be in the form of negative screening (for example, the bank doesn't give loans to fossil fuel companies) or positive screening (for example, the bank proactively looks to give money to renewable energy projects).
- The climate-friendly products offered by the bank (11% of overall score)
We also factor in any climate-friendly products on offer to Australian consumers. These could come in a variety of forms but an example would be a home loan product that offered preferential interest rates for homes that have solar panels or are more energy efficient.
Green Bank of the Year 2023 Methodology
|General environmental criteria||Sector-specific environmental criteria|
|Current environmental performance (23% of scoring)|
Environmental targets and reporting (11% of scoring)
Supporting evidence: 2%
|Sustainable financing approach (51% of scoring)|
Climate-friendly products (11% of scoring)
Supporting evidence: 2%
All relevant banks are contacted and encouraged to enter the awards. Winners are selected each year based on broad and sector-specific environmental metrics. These include greenhouse gas emissions, renewable energy usage and waste-avoiding landfill. More details on the metrics we review for each category can be found in the 2023 Finder Green Awards methodology document (PDF).
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