Salary in, debit orders out. Retail banking in a nutshell.
In the background though, your bank account is doing far more than you think. The money in your account is not sitting idly under a mattress. Banks do not store money. They allocate it. Every rand deposited helps fund loans and investments that shape the real economy.
That includes decisions that will determine the pace and direction of the energy transition.
As one of the most powerful allocation systems in the economy, banking is anything but passive. Banks’ lending and investment decisions fund economic activity – all of it. Including activity that carries real and lasting consequences for people, the environment and the stability of the financial system itself.
In 2024, as part of our “How Cool Is Your Bank?” research, we found that every one of South Africa’s big four banks, in some cases even despite stated commitments to reach net zero emissions, continued to finance – and in some cases increase financing of – fossil fuels.
This is not, in itself, the problem. Transition requires finance. Existing assets do not disappear overnight. But financing high-carbon activities without clear, time-bound plans to shift those activities onto a lower-carbon path is not supporting a transition. It is supporting the status quo.
Gas offers a good example. Many banks position it as a “transition fuel”. In theory, that implies a limited, time-bound role as a bridge to cleaner energy. In practice, banks rarely attach clear expiry dates or phase-down conditions to this financing. Without those guardrails, “transition fuel” risks becoming a label that justifies continued expansion rather than managed decline.
You may be asking, “who cares?”.
If you are like most South Africans, you do. Recent Afrobarometer research shows that nearly 80% of South Africans believe climate change is making life worse. People are not indifferent. They are living the effects – through extreme weather, rising costs and growing economic strain.
That makes the disconnect harder to ignore. On the one hand, rising concern about climate risk. On the other, financial flows that continue to entrench it.
Part of the problem lies in how banks define “sustainable finance”. There is no single, agreed standard. Each bank sets its own criteria, its own taxonomy and its own thresholds. The result is predictable. Almost everything can be labelled as sustainable under one framework or another.
When everything qualifies, the term starts to lose meaning.
Our next iteration of ‘How Cool Is Your Bank?’ will be released shortly. It does not rely on marketing claims or self-defined labels. It looks at what banks actually finance. We do not expect a dramatic shift in practice. But we do expect it to give customers a clearer view of what is happening with their money.
This is important given how banks present themselves to customers and how customers understand the role their money plays. Internationally, regulators have started to push back. In the UK, HSBC faced regulatory action for advertising its support for renewable energy while omitting the scale of its fossil fuel financing. The message was clear: selective disclosure can mislead.
South Africa is moving in the same direction. The Financial Sector Conduct Authority has signalled a stronger focus on protecting retail customers from greenwashing. This is crucial, because retail clients are often the least equipped to interrogate complex sustainability claims – and the most exposed to them.
There is another gap that receives far too little attention: incentives.
Banks make detailed, deliberate decisions about what they finance. Those decisions sit with executives who are highly paid to manage risk and allocate capital. Yet in many cases, there is little direct link between executive remuneration and the real-world outcomes of those decisions. Targets may exist on paper, but they are often weak, indirect or easy to meet without shifting the underlying loan book.
If banks are serious about supporting a transition, this needs to change. Incentives drive behaviour. Without clear, measurable targets tied to reducing high-carbon exposure and scaling low-carbon finance, commitments risk remaining aspirational.
So where does this leave the ordinary banking customer?
Not powerless.
Customers cannot control individual lending decisions. But they can choose where they bank. They can question the claims banks make. And they can look beyond marketing to the underlying reality of what is being financed.
That starts with a simple shift in mindset. Treat sustainability claims with a degree of scepticism. Ask what sits behind them. Look for evidence of change in lending, not just commitments in reports.
Because your bank account is not neutral. It is part of a system that directs capital, shapes outcomes and carries consequences.
Nicole Martens is Executive Director of Just Share.
IMAGE: © armmypicca, 123RF Free Images
