By now, many of us are aware of how everyday purchases can affect the planet, but what about our choice of bank account? Should we make an effort to choose more sustainable banking options?
Sustainable banking is not a new idea. In fact, many traditional banks around the world are taking sustainability into account. Some may even launch “green-friendly” products. However, what sustainability means can look different for everyone.
Tomorrow is a sustainable bank created by Managing Director and Founder, Inas Nureldin. We spoke with Inas about the growing need for sustainable banking options, what true sustainability looks like, and why banks should get out of their comfort zone.
Filip Sobiecki: Tell us about Tomorrow. What made you decide to launch a sustainable banking mobile app?
Inas Nureldin: Before starting Tomorrow, I built up a company that helped big food companies make their supply chains more transparent.
However, I was increasingly questioning, “what kind of positive footprint am I leaving behind with my business?” That’s when I began learning more about sustainability. I wondered, is there a way to use the power of business to create a positive impact? Eventually, I made the tough decision to leave my own company after ten years and start something completely different.
At first, I had no idea where to start. After selling my shares in the company, I looked into investing that money into my own retirement plan. It was difficult to find investment products that don’t support industries that threaten our planet's future. That’s what made me look into sustainable banking.
There were already some sustainable banks around Germany that were investing in things such as renewable energy or organic agriculture. The problem was that they were quite old-school in terms of digitization. Their user experience and usability were not the best.
That’s when the idea came up. Why can’t we combine a great user experience with sustainable banking?
How does Tomorrow define sustainability?
We approach sustainability in a few ways. We started by investing in sustainable projects and industries. We also take the interchange fee from using your Visa card and donate it to climate protection projects.
Tomorrow provides investment products that allow customers to select hand-picked sustainable businesses to invest in.
We are also working on a tool that lets you see the CO2 footprint of each purchase you make. For example, if you buy a coffee from a chain, the app will calculate that purchase's footprint in real-time. We then give you tips on how you can reduce it or offset it.
What industries will you not invest in?
There is a huge list of total no-go industries to invest in. These include weapons, fossil fuels, deforestation, nuclear energy, and GMOs. Companies involved in known corruption or unfair labor standards are also things we say no to.
We say yes to things like renewable energy, education, health, and sustainable mobility. These are things that we believe will create a positive footprint.
For example, a typical oil and gas company would not meet our criteria. A manufacturer that creates insulation for homes made from recycled or sustainable materials would tick all the boxes.
Who are the types of people interested in sustainable banking?
That’s a very good question. The sustainability movement was originally very niche, something just for the eco-nerds. Increasingly, there has been a big shift towards sustainability becoming a new reality.
In Germany, 30% of the population says they really care about sustainability. They’re changing the ways they shop, switching to organic food, green energy, or reducing car usage. This is particularly popular with younger generations who are becoming more conscious about sustainability.
What is the response of other companies? Are they copying what Tomorrow does, and do they do it successfully?
We have seen smaller companies and fintech start-ups try to copy us or get inspired by what Tomorrow stands for.
Established players are also picking up these ideas, but we think this is great. The market is huge, and the problems we face are big, so it’s not up to us alone to solve them. We need many more companies to embrace sustainability.
We can already see traditional banks doing this, but there are problems. Many will cite sustainability as a value on their website or even label financial products as “green.” The problem is that many are “green-washing” their products.
They say they pick the most sustainable companies in oil and gas or the greenest airlines. However, it’s not easy to find clear information on where the money goes if you dig deeper. If you do manage to find out, you often find companies whose values you don’t align with.
Overall, it looks like traditional banks aren’t taking it very seriously. Being sustainable is about more than relabelling your website. It’s about living and breathing it. It’s about building trust with customers.
As a B Corporation like us, what do you think unites B Corps?
I think what unites us is that we’re not in business just for business purposes. Doing business just to make money is the wrong way to go. Money is essential to expand your business, but it shouldn’t be at the cost of other stakeholders – for example, your customers, employees, suppliers, or the environment.
What is the risk to companies like Tomorrow?
I think the biggest risk is what happens if we don’t embrace sustainability? We see companies who don’t think about sustainability and ethics going out of business. For example, companies such as Wirecard went out of business due to corruption. Energy companies who don’t invest in renewable energy have seen their stock valuation drop.
For us, I don’t see any risk. If you had asked three years ago, the main challenge was finding the right investors. They needed a lot of convincing, but not so much anymore. Public opinion is shifting.
Increasingly, customers and investors actively want to get involved in sustainability. We also see employees increasingly prefer companies that do their bit for the planet. Therefore, by not focusing on sustainability, companies could miss out on opportunities.
However, those companies who embrace sustainability should aim to take it seriously rather than just appear “green.”
This discussion is part of our Disruption Talks recordings, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products. To get unlimited access to this interview and many more, sign up here.