Over the last several years, a steady stream of studies has exposed the inexorable link between banking and climate change. Banks use customers’ deposits to make loans—often to climate-harming companies, and most notably the fossil fuel industry. A recent study by Rainforest Action Network, for example, found that the world’s 60 largest banks have funded 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 at banking. According to a report by S&P global, US insurance companies have used customers’ premiums to invest $582 billion in fossil fuels in 2019 alone.
In 2019, JP McNeill founded sustainable banking service Ando with the aim of helping solve these very problems. The fintech is the only banking service that invests every cent of customers’ money into 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 subsequent realization of how harmful his personal banking habits were.
So far, Ando has 70,000 users who, together, have funded millions of dollars worth of solar-installation loans. But they’re just getting started: earlier this year, the certified B Corporation forged partnerships with insurance companies such as Nationwide and Allstate in a mission to introduce the first sustainable insurance offering. I sat down with McNeill to learn more.
Christopher Marquis: When and why did you build Ando?
J.P. McNeill: We launched Ando in June 2019. Not long before, I’d explained to my 13 year-old son how the banking industry works. I told him that we consumers hold the power, that our money helps climate-harming industries operate and grow. And that, by adding transparency and choice to the banking sector, we could create transformative change and eventually reverse climate change. It takes a few minutes to open a sustainable bank account with Ando. It also takes a few minutes to sign up for a sustainable insurance policy. These are small actions that everyone can take that, collectively, will lead to real change.
We have two main objectives. First: offer fee-free banking that empowers millions of people to earn and save money while living sustainably. Second: Create a path for consumers to help improve how the banking and insurance industries work.
Marquis: How is Ando different from traditional banks?
McNeill: On the surface, 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 offerings are best-in-industry-like 1.5% unlimited cash back with every debit card purchase, overdraft protection up to $200 and early paydays.
And then there are two completely unique practices that no other bank offers. The first is transparency. People should know what their bank is doing with their money. It isn’t just sitting in a vault; our money is what enables banks to make loans. If we have $5,000 in our Chase bank account, Chase can make $5,000 worth of loans. Without transparency, your money can be funding all sorts of industries and businesses. Fossil fuels, guns, pesticides, whatever.
Money is power. Banks are using it for their own interest, but those checking interests might not be aligned with the interests of the person with the 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 advance a sustainable economy.
Marquis: What have been some of the challenges in building a sustainable bank from the ground up?
McNeill: People don’t realize how much their money is contributing 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 remaining 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 all enabling this to happen. Money is power, but most consumers have no idea how much power they hold.
Marquis: How do you find banking partners?
McNeill: We continually have conversations 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 are helping fund loans for renewable energy. We’re looking 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 (things like regenerative farming, electric vehicles and green buildings).
Marquis: How do you plan to grow the company? How many users do you have today?
McNeill: We have 70,000 customers right now. Word of mouth and articles like this are the best ways for people to learn about Ando and Sustainable Banking. We offer to current users for referring incentives, and we also partner with influencers who are worried about climate change and want to do something about it. One of the great things about Ando is that anyone can be a part of the solution–both in terms of participating and in helping spread the word.
Marquis: Do you think the larger banking industry will start implementing real changes?
McNeill: The larger banking industry won’t implement real changes until they’re told to do so by the government (which is probably decades away from happening) or they start to see a drop in their deposit base. And I think we really only need a 5-10% decrease in deposits for them to change. Customers really can 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 a car or homeowner insurance payment, and the insurance industry is free to use that money however they want. There are 200 million automobile insurance policies and 100 million homeowner insurance policies in the United States. We’re pouring about half a billion dollars into the insurance industry each year, with no transparency into where that money is being invested. About three quarters of what we give the insurance industry is invested. Insurance carriers fund the fossil fuel industry, the gun industry, pesticides… essentially everything the banking industry is funding. The same type of transparency we’ve brought to banking should also be applied to insurance.