Let’s get this out of the way: Banking isn’t sexy. It’s harder to talk about than solar power. It’s harder to sell than responsibly sourced down. It’s boring. But think of it like a good mob front: The more mundane the exterior, the more it has to hide. Last year, the Conservation Alliance made waves by leaving Bank of America after a two-decade financial relationship. Four years before that, the Sierra Club Foundation jumped ship on Union Bank for Amalgamated Bank, a little-known institution with limited services. Each of these switches was a cutting-edge, revolutionary statement—and a lot harder to pull off than you might think.

What’s the Big Deal?

For one, it’s a huge pain to switch banks. There are papers to sign, meetings to attend, payroll and bills to move over. Companies just don’t do it. So if you’re a big firm, gathering up your things and walking out is a surefire way to send a message that you’re not happy. And the aforementioned nonprofits were not happy.

After all, Bank of America was providing more than $48 billion per year in financing to fossil fuel companies. A chunk of that money belonged to the Conservation Alliance, which had spent two decades working to prevent Arctic drilling. When the nonprofit asked Bank of America to pledge not to invest in Arctic National Wildlife Refuge pipeline projects, it refused the request. Like we said: not happy.

The Secret Life of Money

Here’s how bank investing works: You deposit money in your account. You start making interest, which is a fraction of the interest your bank is making on your money. That’s their business model: Banks keep your savings safe, and in return, they get to invest them in whatever they want—whatever they feel will be most lucrative.

Right now, in this global economy, that’s fossil fuels. It’s fast fashion. It’s deforestation operations and palm oil plantations. It’s Big Tobacco. It’s single-use plastics. It’s all the things that the outdoor industry has rejected—at least, in theory.

“We didn’t want our money to be leveraged to finance the very things we’re fighting against,” says Dan Chu, executive director of the Sierra Club Foundation, which pulled its $30 million in assets from Union Bank in 2016. At the time, Union had just merged with Mitsubishi UFJ Financial Group, which was funding the company behind the Keystone XL Pipeline. The Sierra Club Foundation could keep trying to stop the pipeline, but banking with Union would effectively undo every effort. So, it switched to Amalgamated Bank, which has high sustainability and social-justice investing standards.

Likewise, the Conservation Alliance ultimately moved to Bank of the West, a 1% for the Planet member that has begun divesting from fossil fuels and other environmentally harmful industries.

These switches are great success stories, but in the outdoor industry, they’re rarities.

Where the Outdoor Industry Banks

In reporting this story, The Voice asked 15 brands where they bank. Brands with Bank of the West, Amalgamated, or credit unions were happy to reply. A few others, like Snowsports Industries America and Patagonia, revealed that they were shopping around for a new institution, but declined to mention their current banking partners.

REI did point to its relationship with U.S. Bank, which hosts the REI MasterCard program. And VF Corp. acknowledged working with “many different banks,” including Bank of New York Mellon. Every other brand declined to comment.

A likely truth is that most outdoor companies bank with the biggest in the US: JP Morgan Chase, Bank of America, Citi, Wells Fargo, Goldman Sachs, Morgan Stanley, and U.S. Bank (see sidebar).

“The banking system is hard,” says Howard Fischer. Fischer is the CEO of hedge fund Basso Capital Management and co-founder of Gratitude Railroad, an investment firm dedicated to impact investing. “When you’re a company with hundreds of billions of dollars flowing in and out of the coffers, you need a pretty sophisticated bank. With that much money involved, it’s hard not to deal with mainstream banks.” But the status quo isn’t pretty.

“For a big bank that’s a large financier of the fossil fuel industry, five percent of their portfolio might be in fossil fuels,” says Ben Stuart, head of growth and transformation and chief marketing officer at Bank of the West. “Five percent is a big number.”

The Carbon Footprint Fallacy

There’s another, more abstract problem with dragging your feet about a bank switch: The longer banks remain comfortable, the longer the power structure remains intact, says Auden Schendler, senior VP of sustainability at Aspen Skiing Company. That means big banks keep funding Big Oil, Big Oil keeps funding lobbyists, lobbyists keep controlling policy, and things like carbon pricing—which Fischer sees as essential for real climate impact—never become law.

Meanwhile, outdoorspeople remain hyperfocused on small, personal steps like biking to work and recycling—which, says Schendler, is exactly what extractive industries want.

“The fossil fuel industry wants a ski resort to aggressively reduce its carbon footprint,” Schendler says. “It doesn’t impact them at all, and the power structure stays in place. Plus, it means the ski resort is taking responsibility for its own carbon footprint when it’s really the fossil fuel company that’s to blame.” Unless coupled with some kind of real power play, campaigns that encourage recycling and biking to work, Schendler claims, are just distractions.

Conversely, when a big firm changes its bank, that sends a strong financial message—the only kind of message that can really push at power, Fischer says. The switch also sends a message to customers.

An End to Greenwashing

As hard as it is, dumping your bank might be the easiest way to show your brand cares about the environment, says Chu. For one thing, it’s cut and dried. Ask brands about their DEI efforts or commitment to sustainability, and it’s easy to retreat into marketing jargon and greenwashing. But ask them where they bank? They’re either funding fossil fuel extraction, or they’re not. Responsible banking is the outdoor industry’s chance to get real—with itself and with its customers—about its commitment to the environment.

In recent years, the industry has focused largely on greening up its supply chains. Robinson says brands can look at financiers and insurance companies as part of those supply chains—and subject them to just as much scrutiny as shipping or manufacturing partners.

Plus, with increased awareness around responsible banking, making the switch can give your brand a competitive edge.

Ryan Hartegan, founder of Golden State Guiding in California, moved his company to Bank of the West in the summer of 2020.

“I just wanted to do it on a moral level,” he says. “I didn’t want my money, whether it was a drop in the bucket or not, supporting the fossil fuel industry anymore.” What he didn’t expect: the wave of support and attention his brand got after announcing the switch.

“From a marketing standpoint, it was really good for the business. It gave us something else to talk about to show that we’re more than just a guide service,” Hartegan says.

Harsh Realities

For the Sierra Club Foundation, the whole process of switching banks took around 18 months. For the Conservation Alliance, the process is ongoing. But onerous paperwork isn’t the only hurdle.

The responsible-banking industry is painfully young. Patagonia says it’s “actively researching” new banks, but few are big enough to handle a complex global business, CEO Ryan Gellert told OBJ.

“There are divestment activities happening at banks, but I would say there are no green banks of scale,” he says. “What we need is global banks to really embrace a different way of doing things…The harsh reality is I think none of them are all that progressive.”

One issue is that awareness surrounding clean finance is fairly new. Another barrier is that fossil fuels, Big Agriculture, and other “dirty” industries are so lucrative that many banks aren’t willing to kick them curbside, even under an avalanche of public pressure.

Take Bank of America, for example. Even after a dozen global

banks bowed to public outrage and pledged not to fund Arctic Refuge drilling, Bank of America stayed its course for nearly a year, remaining the only major US bank to do so. It wasn’t until November 2020—about a month after Conservation Alliance left—that it formally pledged not to provide project financing for Arctic Refuge oil.

“From a bank’s perspective, it comes down to how much revenue you generate from these activities that harm the planet,” says Bank of the West’s Stuart. “You have to get to the point where the revenue that’s leaving starts to outweigh the revenue the bank is gaining.”

The Tipping Point

To save the planet, banks need to change. For banks to change, it’s going to take a lot: public pressure, bad press, big defections, and a landslide of lost customers, says Fischer. Fortunately, you don’t have to switch your entire operation to start rocking the boat.

If a responsible bank doesn’t offer international wiring or other services you need, it’s probably because they’re not big enough yet, explains Chu. You can move the bulk of your assets to a responsible investing account without completely giving up your old bank. That still sends a message, and it kicks off positive impacts. Relocating your cash not only shrinks the pool of money that dirty industries can pull from; it also helps responsible institutions grow big enough to offer more services and attract other high-profile clients, he says.

If you can start the process, start. And be vocal about it.

“If your bank is doing something you don’t like, tell them,” Robinson says. “Banks need to know that consumers are paying attention.”

What’s the Damage?

Collectively, the 11 outdoor behemoths we investigated (see below) had $5,885,159,000 in cash, cash equivalents, and short-term investments according to Q3 2020 SEC reports. If 5 percent of each portfolio goes to extractive industries, that’s $294,257,950 funding extraction annually.

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Earlier this month, The Conservation Alliance announced that it would end its association with Bank of America over concerns about the institution’s commitment to environmental protection, abruptly severing a partnership that has lasted for years.

“Today, we are announcing our decision to divest all assets from our longtime bank and financial partner, Bank of America, in order to align our investments with our values,” the organization wrote in a public statement on October 10.

The Conservation Alliance announced that it would transfer its business to Bank of the West immediately.

“No bank is perfect, but we are impressed with [Bank of the West’s] move away from fossil fuels and support of groups like The Conservation Alliance, 1 percent for the Planet, and Protect Our Winters. We will regularly assess the financial institutions we work with to ensure our investments support our vision of a planet where wild places, wildlife, and people thrive together,” the organization wrote.

This week, OBJ spoke with The Conservation Alliance’s executive director, Brady Robinson, about the reasoning behind the decision.

Why has The Conservation Alliance decided to sever ties with Bank of America?

Our initial concerns had to do with protecting the Arctic National Wildlife Refuge. We’ve been funding the Alaskan Wilderness League on this work for nearly 20 years, and we’ve been with Bank of America for nearly as long. A number of other banks over the years have taken public stands not to fund oil and gas exploration in the Arctic National Wildlife Refuge, but there was one that didn’t, and it was the one we happened to bank with.

It just didn’t look or feel good. We respectfully but forcefully engaged with Bank of America, and they listened to us. I think the fact that we represent a coalition of over 200 businesses got their attention. We had discussions with them, and some of our member companies had discussions with them as well, but ultimately they elected not to change their public stance. That’s when we decided it was time for us to leave.

Can any company truly call itself sustainable without taking a close look at its banking?

Maybe not. It’s time we all examined the issue more closely. A lot of companies have been taking a hard look at their supply chains from a sustainability and human rights perspective, and I think financial institutions have, for the most part, been conveniently excluded from that scrutiny. We’re interested in drawing attention to the financial sector in this way. Who you bank with should be included in your supply chain analysis, because banking with a certain institution is a tacit endorsement of their business activities and who they’re investing with.

It’s also a good way to call attention to issues you care about. For us specifically, the decision helped us draw attention to the Arctic National Wildlife Refuge, apply some pressure on Bank of America, educate our membership a little bit, and generally elevate the issue.

How hard is it to change banks?

We’re relatively small, so for us it’s easier than for larger groups. But to be clear, even for us it was still a pain in the ass. Banks are sticky. You get used to your checking account and you have all your automatic withdrawals set up. You have all your credit cards tied to various expenses. Banks use that to their advantage.

Obviously, it’s a lot harder for bigger companies. If you’re a big international corporation, the number of banks that can meet your business needs is probably small. We literally could have gone to a credit union in Bend, Oregon, after leaving Bank of America. The big players in the outdoor industry can’t do that. I think it’s important to note that we’re not trying to pass judgment on our bigger member companies. We’re just encouraging them to ask themselves this question. We are not telling them what the answer is because they have to balance their business needs with their sustainability goals. We’re just calling attention to the issue. And we’re hopeful that our member companies and the industry at large will give this consideration.

Why did you choose Bank of the West as your new financial partner?

We shopped around a little, but ultimately we decided on Bank of the West because we already had a relationship with them—they’re a Pinnacle Member of The Conservation Alliance. They’re really sincere in their support of us and groups like 1 percent for the Planet and Protect Our Winters.

A group like Bank of the West proves that good conservation practices can also be good business practices. They’re making a big stand in this area. They’ve walked away from some lucrative business as a function of their principles. If we can support that by moving our business to them, that’s great for us.

To be clear, we’re not saying everybody should use Bank of the West. But for us, because we already had a relationship and their commitments align with ours, it was a pretty easy choice.

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