'Banking Shouldn't Cost the Earth': Tandem's 100% Offset

Tandem Bank has announced its commitment to offset 100% of its operational emissions, partnering with Climate Impact Partners to achieve this ambitious goal.

This initiative marks a crucial step in Tandem's journey to reduce its environmental impact and solidify its position as a leader in green banking.

Meet Tandem, the green bank

Tandem Bank has established itself as a frontrunner in the green banking sector, offering a range of products designed to help customers lead more environmentally friendly lives.

Currently, Tandem Bank does not engage in financing high-polluting projects, particularly in comparison to other banks that have been criticised for their investments in fossil fuels. The bank's strategy includes prioritising low-carbon initiatives and supporting projects that contribute positively to the environment, such as renewable energy developments in East Africa, a region where fossil fuels have been at the centre of recent controversies.

From loans for energy-efficient home improvements to green savings accounts, Tandem's offerings predominantly appear to support a sustainable lifestyles.

How banks produce (and reduce) emissions

In 2021, the climate nonprofit CDP reported that "the greenhouse gas emissions associated with financial institutions’ investing, lending and underwriting activities are more than 700 times higher, on average, than their direct emissions."

Like other companies, banks produce emissions through the energy used in their offices, or the air miles travelled when their employees jet around the world on business, but these pale in comparison to the emissions created by their investments. 

That's not so unexpected: banks are not producers of any tangible product, they do not manufacture or ship physical merchandise like a consumer goods company or an agricultural outfit. Rather, the bulk of their emissions are indirect. These are the tricky Scope 3 emissions that organisations around the world are grappling with.

That being said, Tandem managed to reduce its customers' emissions by 74,000 tonnes CO2e by 2023, though there is still a long distance left to run. When is comes to Scope 1 emissions, Tandem is well underway in its reduction journey and it has already reduced its Scope 2 emissions by 100%, fuelling all its operations with renewable energy.

But how exactly do banks reduce Scope 3 emissions, especially when they lend money to all kinds of people and projects? Partners at Grant Thornton have an idea. "Lenders’ attention to reducing Scope 3 emissions is complemented by a focus on ESG related lending – for example, sustainability-linked loans where the terms of the loan track specified sustainability-based key performance indicators," they say in a 2022 article.

Luckily enough, that is exactly what Tandem Bank is set up to do.

Tandem's attentions turn to Scope 3

Tandem's latest initiative focuses on offsetting its operational Scope 3 emissions. The bank plans to purchase 3,013 tonnes of high-quality carbon credits to compensate for these indirect emissions.

This strategy allows Tandem to take immediate action while continuing to work towards its long-term net zero targets. The carbon credits will support Rooftop Solar Energy projects in East Africa, bringing solar lighting systems to households in Kenya and Uganda.

This initiative not only reduces CO2 emissions but also improves health by reducing indoor air pollution and providing affordable, clean energy to communities heavily impacted by climate change.

Is offsetting emissions truly sustainable?

While offsetting is not a permanent solution, it offers a practical approach to immediately tackle unavoidable emissions. Alex Mollart, Tandem's CEO, emphasises that offsetting complements the bank's internal reduction efforts.

"As we work towards our own net zero targets, offsetting lets us act now. Partnering with Climate Impact Partners, with their 20+ years of expertise in carbon offsetting, means we know the projects we support are making a real, verified impact on the climate," he says.

As the banking sector continues to grapple with its environmental responsibilities, Tandem Bank's proactive approach sets a commendable example. By combining internal emission reductions with strategic offsetting, Tandem is demonstrating that banking doesn't have to cost the Earth.

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