Climate-Aligned Treasury Management: Decarbonizing a Town’s Banking and Cash
Project Overview
When a town, company, or household deposits money in a bank, that money does not sit still. Moinester noted that about 90% of deposits are lent back out into the economy, and at large Wall Street banks roughly 20 to 30% of lending goes to the most carbon-intensive sectors such as energy production, utilities, mining, and heavy manufacturing. The emissions tied to that lending are what TOPO Finance calls financed emissions, and according to its analysis they are about 700 times larger than everything else a bank does operationally.
TOPO Finance began asking in 2021 why banking never appeared in corporate climate plans. Its Carbon Bankroll research found that for many of the largest climate-leading companies, the emissions from their cash and investments rival or exceed their entire reported footprint. For Apple, the figure was about 120% of its scope 1, 2, and 3 emissions. Across a broader set of companies, financed emissions would add about 76% on average to reported emissions, ranging from about 20% to 800%. TOPO also estimated that the roughly $7 trillion in US corporate cash represents about 20% of US emissions.
These emissions are already in scope under existing carbon accounting rules. The Greenhouse Gas Protocol treats corporate and organizational cash and investments as part of Scope 3, Category 15, but historically there was no data or methodology to require reporting. TOPO Finance is working with the GHG Protocol on an update and expects climate-aligned treasury management to become a standard best practice for responsible organizations by about 2028.
Municipal balance sheets are part of the picture. In a study done ahead of the previous year’s Mountain Towns 2030 summit, TOPO Finance found that Aspen’s banking and investing added about 27% on top of its other reported emissions. That is smaller than for a cash-rich tech company but still a sizable share that most town climate plans do not count.
TOPO Finance and Mountain Towns 2030 are launching a free pilot working group for mountain towns. Participating towns will get help aligning their sustainability and treasury teams, measuring financed emissions, and building a roadmap based on each town’s service and liquidity needs. That roadmap may include shifting some banking services to greener banks, engaging existing banks to improve their practices, using climate criteria when choosing a bank for a bond issue, and exploring new green financial products. The goal is a shared playbook and a panel of participating towns at a future summit.
Split and shift: unbundling banking services
Moinester stressed that this is not a divestment campaign. Large organizations often have nowhere else to go (no US green bank could take more than about 1% of Apple’s cash), so the focus is on how a bank operates rather than simply who you bank with. TOPO’s “split and shift” approach separates services that must stay with a large bank from more fungible ones, such as money market funds, that can be moved to greener or regional banks. When an organization moves business, it should tell both the old and new bank why.
Towns have more flexibility than large corporations. TOPO is developing a green banking RFP for an organization seeking a new banking partner. A city issuing a municipal bond can vet underwriting banks on environmental performance, which rewards better banks even if it does not change the town’s own footprint directly.
Cash sweep products and a collaborative green muni bond
TOPO is working with MaxMyInterest, a cash sweep service that spreads deposits across multiple FDIC-insured regional banks to maximize interest. Moinester’s working hypothesis, still to be confirmed by analysis, is that this approach roughly halves financed emissions while earning higher interest, keeping same-day liquidity, and preserving the existing primary bank relationship. The aim is to add green banks such as Amalgamated and offer it as a cash management option for towns.
Looking ahead, Moinester proposed that mountain towns could pool revenue-generating projects such as EV chargers into one collateralized green municipal bond, combining perhaps $10 million from one town and $20 million from another into a larger issue that could be rated and sold to institutional buyers. He noted that no such product exists yet to his knowledge.
Lessons Learned
Your cash is part of your climate footprint
Money in the bank is lent out, and a meaningful share goes to carbon-intensive industries. For Aspen, TOPO Finance estimated banking and investing added about 27% to reported emissions. Towns that leave treasury out of their climate plans are missing a sizable, largely uncounted source.
Frame it as partnership, not divestment
Treasurers are paid to manage risk, so demanding that they pull all money out of fossil fuels will meet resistance. Moinester recommends framing the work as adding a climate lens to financial management, the same way towns already manage other supply chain partners, and building alignment between the sustainability and treasury teams first.
Unbundle services and use your leverage
Most organizations can keep their core bank while shifting more fungible services to greener or regional banks. When choosing banking partners for bond issues or new accounts, include environmental performance in the evaluation, and tell banks explicitly why you are moving business or rewarding them.
Climate alignment does not have to cost money
Moinester cited Patagonia’s treasurer, Charlie Bishoff, who says the company now earns more from its financial management because the effort pushed it to look for better options. The session host added that when his organization moved its money to greener banks, it saw strong interest rates. Done carelessly it can cost money, but it does not have to.
Banks respond to demand signals
Few customers have ever asked their banks about climate practices, which helps explain weak transparency. A regional bank told TOPO’s partners to show them the demand and they would get greener. Towns acting together, through a working group or a pooled green bond, can send a much stronger signal than any one town alone.
Bank relationships are sticky, so watch trajectory
The average American keeps a bank account about 17 years, longer than a car or a home. Rather than chasing year-to-year rankings, evaluate where a bank has been, where it is now, and where its policies are heading.
Program Contacts
Paul Moinester, Founder and Executive Director, TOPO Finance