The Ripple Effect: How your mortgage can transform Australia

We want to be more sustainable, but most of the actions we take seem so inconsequential relative to the size of the problem. One action that we can take that has real impact is placing our mortgage at a sustainable bank.

In this blog post, I will explore the concept of sustainable banking, its key features and why it matters for the planet and society as a whole.

A sustainable bank, also known as a green bank or ethical bank, goes beyond just maximizing profits. They aim to drive sustainable development, promote environmentally responsible practices, and foster positive social impact while maintaining financial stability and profitability.

Key features of a sustainable banks are:

More than just profit: Sustainable banks consider environmental, social, and governance factors when making investment decisions and assessing the risks and opportunities associated with various projects and businesses.

Green financing: Sustainable banks are committed to green financing. These banks prioritize funding projects and initiatives that contribute to environmental sustainability, such as renewable energy projects, clean technology development, sustainable agriculture, and eco-friendly infrastructure.

Commitment to community: Sustainable banks show a commitment to the communities in which they operate. They focus on funding projects that have positive social impacts, such as affordable housing, education, healthcare, and initiatives aimed at reducing inequality and promoting community development.

Transparent & accountable: Sustainable banks understand the importance of transparency in their actions. They may publish reports on their ESG performance and disclose the projects they support. Their commitment to transparent reporting holds them accountable for their sustainable efforts, enabling stakeholders to make informed choices as to where they place their money.

Advocate for a better world: Sustainable banks may engage with stakeholders, governments, and industry players to advocate for sustainable practices, policies, and regulations that align with their values and goals.

Only lend to responsible companies: Sustainable banks assess the environmental and social risks of potential borrowers and strive to ensure that the projects they finance meet sustainability criteria.

Green Products and Services: They may offer green financial products and services, such as green home loans, sustainable investment funds, and environmentally friendly banking options.

Why it Matters

The banking sector constitutes about a quarter of the Australian share market and holds indirect influence over the broader economy by determining which companies get loans.  Through integrating sustainability principles into their operations, sustainable banks play a pivotal role in channeling capital toward environmentally friendly and socially responsible ventures. This contributes to the global shift toward a more sustainable and equitable economy. Placing your mortgage with a sustainable bank doesn't just align with your mortgage size; it multiplies your impact.

I personally, am not the model sustainable citizen. While I am continually trying to improve, I often get the recycling wrong, use paper plates when my family comes over and don’t always buy from sustainable brands. But, when it comes to the big things, like my super and my mortgage, I am committed to getting it right because I know it has real impact. In Australia, this is actually easy as so many of the large banks have excellent sustainable policies, so your choice is not limited, nor do you have to pay a higher interest rate on your loan.

One of the core objectives of Sustainable Home Loans is to educate and support others to switch to more sustainable banks (at least then I won't feel bad about the paper plates).

Australia's current "Great Refinance" offers an extraordinary opportunity. If each person refinancing their mortgage opts for a sustainable bank, the ripple effect could transform Australia into one of the world's most sustainable nations. The potential is vast, and your choice can truly make a difference.

Get in touch for further info.