Atom bank has bought 25 acres of newly planted broadleaf woodland in Northumberland to sequester carbon.
This forms part of its strategy to become a ‘climate positive’ bank by 2035, covering both operational and all financed emissions associated with its lending.
As the woodland matures, almost 7,000 tonnes of CO2 will be sequestered by the trees, which include willow, sycamore, birch, alder and rowan. With current emissions from its operations (excluding financed emissions) measured at between 500 and 700 tonnes per year, the woodland is an important first step for the bank to meet its environmental commitment.
Once an open cast coal mine, within a few years the site will be a thriving native woodland. A range of woodland species are already taking advantage of the cover and protection the site offers as the trees establish themselves and emerge from the tree guards that protect them.
STRATEGY FOR CLIMATE POSITIVITY
Atom bank has a commitment to reduce the carbon intensity of its lending book and as part of that pledge will invest in natural capital projects, purchasing or lending on an additional 100 hectares of land this financial year.
In this instance, Atom is choosing to own the land directly, and with that also the carbon credits that are created as the woodland matures. Deciding to hold both the asset on its balance sheet and to have direct responsibility for the woodland’s growth is a new and innovative model for how banks can contribute directly to a more sustainable world.
The assets use the bank’s risk capital to generate a flow of carbon credits that is not only more controllable than purchasing from other sources but is also ultimately much more efficient for the bank. Atom is now seeking to help fund other projects with similar aims.
IMPACT
Covering the last financial year, Atom’s total carbon impact was 658.44 tCO2e, a reduction of 2.2% from the year before during a period when the bank increased operating profit by 600% on the previous year.
For the past three years, the digital lender has reported on its operational carbon emissions. However, the bank has started to measure the financed emissions associated with its lending and will disclose these for the first time in its upcoming carbon report for the 2023/2024 financial year.
“we need to make smarter choices about the companies we deal with, and that includes banks”
Mark Mullen, chief executive of Atom bank, said: “We’ve made this significant investment in an area local to Atom because we recognise the responsibility we have to our planet. We could have invested this money in employing more people or launching new products – as to be fair we usually do – but this time we chose trees. In time these trees should store more CO2 than our company has been responsible for emitting in all the years since we were founded.
“We know our customers usually choose Atom because we offer excellent value for money and first-class customer service. But we also want our customers to know their bank is trying to do the right thing. The planet doesn’t care about us, it will keep spinning with or without us populating it, but we all rely on its health for our future existence. So we need to make smarter choices about the companies we deal with, and that includes banks.
“This is an important step as we target becoming climate positive by 2035, which means we will take more carbon out of the atmosphere through our lending and investment choices than we are responsible for emitting. We could have gotten away with promising less, but companies really must do more.”
Ed Twiddy, director of ESG at Atom bank, added: “Atom is a business designed for the future, changing banking for the better. We want to and can do more to actively reduce and then reverse our impact on the environment, especially as we grow as a business. This is a challenge but we believe that the efficiency of our operating model combined with a drive to innovate in everything that we do means that we can demonstrate real leadership for the sector.
“Atom is a business designed for the future, changing banking for the better”
“As a lender, we’re responsible not only for the carbon coming from our day to day operations and travel but also for a proportion of the emissions from the homes and businesses that we finance. This creates a really significant challenge for us and all other banks – but the same leverage and lending on our balance sheets that funds our profitability and drives these emissions is also part of the answer to how we reverse the emissions whilst retaining the commercial success of the bank.
“Directly owning this woodland and putting our balance sheet to work in a different way is one example of how the power of the banking model, combined with a value set that prioritises doing the right thing, can be turned in favour of both the planet and a profitable future for Atom.”
