We buy organic veggies and green energy. In the meanwhile, the money in our savings account might be financing a new coal power plant. Sad, but true.
Just our efforts to buy green energy, recycle our waste and be climate neutral don’t make us a sustainable bank. We’re sustainable because we are working on a future in which money always has a positive effect. Because, ultimately, money is just the means to an end. In sustainable banking that end always needs to be good.
If we redirect enough money into sustainable projects, there is less money left over for conventional banks to channel into destructive industries. That’s why we invest your money in projects that secure our future in the long run.
We use our customer deposits exclusively to finance sustainable projects. You’re probably wondering what customer deposits are, right? That’s the total amount of money our Tomorrow customers have in their accounts. We like to call it the “Tomorrow capital”.
Our promise to you: not a single penny goes into destructive sectors like weapons, coal power or factory farming – as is often the case with conventional banks. Such a “divestment” already does a lot, but it’s only the beginning. Part of the Tomorrow capital is used to support future-proof projects.
Sustainable businesses need financing. Think about the organic farmer who needs new seeds. The start-up that needs funds to launch their social business idea. Or a wind farm trying to expand its capacity. We don’t base our decision on which projects are sustainable enough on our gut feelings. It comes together after a clear process.
Step 1 – Before anything else we check whether the project or investment is included on our “No Go” list. We decided to exclude some industries and business areas from the start because they are by definition damaging to us humans and our planet. For example, weapons, factory farming or fossil fuel. We also exclude investments in areas that inhibit fairness, such as tax evasion, corruption and human rights offences.
Step 2 – Next we evaluate whether the project makes a contribution to the “Sustainable Development Goals” of the United Nations. We summarized these 17 goals into five main categories: protecting natural resources, ensuring basic needs, protecting the climate, empowering disadvantaged groups, and promoting fairness. Only projects that contribute to at least one of these five challenges are potential candidates for funding.
Step 3 – The final evaluation is done by our external Impact Council consisting of Madeleine Alizadeh, Markus Beckmann, Susanna Krüger, Kristina Lunz and Andreas Neukirch. Only if they agree with our evaluation that the investment meets our standard is it added to our investment portfolio.
Step 4 – As the final step, we check the financial prospects of the project. The risk management department of our partner Solarisbank supports us in this step.
We don’t base sustainability on gut feeling. Instead, we have a strict list of criteria for managing where your money goes – and where absolutely not.
115 million euro of 55.000+ users redirected from Bad Banks
19,450,000 euro invested in sustainable projects
0 euro invested in destructive industries
Learn more about our impact projects.
What do we really need to survive? Air, water and warmth. By funding renewable energies and protecting our waters we protect the base of life. One of the core tasks of sustainable banking is, in our opinion, the financing of future-proof projects. That’s why we invest in Green Bonds. €9,800,000 went into a Green Bond issued by Förderbank NRW and €3,600,000 have been invested in the Environmental Bond by Nordic Investment Bank.
Banks need capital to be able to give loans. They borrow that money from private investors (like you) or institutional investors (like Tomorrow or our partner Solarisbank) by selling bonds at the stock exchange. That’s called refinancing a loan. After an agreed period they need to pay back the capital plus interest to the creditor (in this case Tomorrow/Solarisbank). At Tomorrow we use your money exclusively to buy bonds which strictly finance sustainable projects. Green bonds focus on refinancing environmentally friendly initiatives. We invest part of our Tomorrow capital in green bonds issued by Förderbank NRW and Nordic Investment Bank.
These green bonds are issued by Förderbank NRW to exclusively refinance environmentally friendly projects that explicitly address the United Nations Sustainable Development Goals (SDG). The bonds were issued for the seventh time in 2019 and have financed numerous green initiatives in North Rhine-Westphalia, Germany in recent years. Their main goal is to expand renewable energy and safeguard clean drinking water. In the past, for instance, proceeds from the bond have been used to restore the river Emscher, which has ecologically benefitted the region enormously.
The green bonds portfolio of Förderbank NRW is divided into four different areas. The largest part (roughly two thirds) of the total of €500 million goes towards expanding renewable energies (SDG 7 & 13) in North Rhine-Westphalia. Here, the main focus is on constructing wind power plants, but photovoltaic systems are also part of the portfolio. Another focus area of the green bonds is the modernization of public facilities (SDG 3, 11 & 13), for instance by establishing heat recovery systems in hospitals to make them more energy-efficient. The green bonds also finance loans to private home owners who want to optimize the energy efficiency of their houses. The fourth core area is the support of “Clean transport” projects, such as electric buses or e-charging stations (SGD 13 & 11).
The Environmental Bond is a green bond issued by the Nordic Investment Bank (NIB), with the aim of expanding renewable energies and promoting energy efficiency in buildings. These investments will help to create new energy plants but also to reinforce existing infrastructure. The investments mainly focus on Sweden, Norway and Finland. An exciting pilot project are electric ferries which are already in use in Norway.
All supported projects explicitly address the United Nations’ Sustainable Development Goals (SDGs). NIB’s Environmental Bond is divided into six areas. The largest of these – accounting for 27 percent of the total bond – is invested in expanding renewable energies, especially wind, solar, tidal and wave power plants (SDG 7). In addition, part of the funds is also invested, for example, in developing, designing and producing new technologies for renewable energies (SDG 13).
25 percent of funds are invested in measures to improve the energy efficiency of buildings. This is done by renovating existing buildings, including making improvements to heating systems, insulation, lighting or electrical devices. Another 25 percent is invested in water conservation and protection, which includes wastewater treatment and flood protection (SDG 6). Above that, different projects focus on the expansion of nature reserves and the preservation of biodiversity to protect and restore freshwater and marine ecosystems (SDG 13; SDG 14). Clean transport solutions (SDG 11) are another area supported by the bonds, accounting for 12 percent of invested funds. The efforts mainly focus on the further development of electricity and sustainable biofuels including the necessary infrastructure (e.g. rails, charging stations, fuel distribution systems, bicycle and pedestrian infrastructure).
Every human being deserves an affordable home. To make this vision come true we invest a part of your money in social bonds. €6,000,000 went into the SDG Housing Bond issued by Nederlandse Waterschapsbank N.V. Why? Because we believe that supporting social initiatives is a key part of sustainable banking.
Banks need capital to be able to give loans. They borrow that money from private investors (like you) or institutional investors (like Tomorrow or our partner Solarisbank) by selling bonds at the stock exchange. That’s called refinancing a loan. After an agreed period they need to pay back the capital plus interest to the creditor (in this case Tomorrow/Solarisbank). At Tomorrow we use your money exclusively to buy bonds which strictly finance sustainable projects. Social bonds focus on refinancing social initiatives. We invest part of our Tomorrow capital in a social bond issued by Nederlandse Waterschapsbank N.V.
The SDG Housing Bond is a social bond issued by Nederlandse Waterschapsbank N.V. that focuses on creating social housing in the Netherlands. The apartments and rents are adapted to income levels and are capped with a maximum rent of €710.68 per month (up to this amount renters can get subsidies from the government). 80 percent of new housing is reserved exclusively for households and families with a maximum income of €36,798 per year (2018). 10 percent is reserved for people with special needs (e.g. health-related conditions).
Furthermore, the investments also go into other areas such as sustainable communities, diversity, integration, energy efficiency, quality of life and resident satisfaction. All projects explicitly address the United Nations Sustainable Development Goals (SDGs). More than 50 percent of funds is used to modernise existing houses, particularly to improve energy efficiency. This includes equipping houses with solar panels and replacing old heating systems with more efficient ones. In addition, windows, roofs and walls were insulated more effectively (SDG 7; SDG 11). 56 percent of the apartments are social housing and 11 percent of the apartments are available for single parents, predominantly women (SDG 1; SDG 5; SDG 10).
A further part of the funds is invested in improving the district and providing facilities for the community. For this purpose, individual neighbourhoods are assigned a “Social Management Label” which is based both on quantitative survey findings and on qualitative insights from interviews with residents. Depending on the needs of the community suitable measures are taken accordingly.
Tomorrow Zero is the first climate-neutral bank account. Our premium account offers great banking features such as unlimited Pockets and worldwide free cash withdrawals. And we invest a major part of your monthly fee in projects that demonstrably reduce carbon dioxide.
We use the fees to support projects such as microcredits in Peru and biogas units in Vietnam. People in these regions are hit the hardest by climate change – although they are the least responsible for it.
Track your positive impact in the app – and the impact of the entire community.
The financial institutions issuing the bonds have defined strict guidelines on how and for which purpose their funds can be used. In the case of Förderbank NRW that’s even defined by law. The bonds are supervised by external institutions.
For the selection of our climate projects (more about those here) we teamed up with the company ClimatePartner. They are committed to climate protection and offer a number of wonderful projects to offset CO₂ emissions. It was very important to us that the selected projects have a social component in addition to climate protection. All three projects are certified according to the Verified Carbon Standard (VCS) or the Gold Standard (GS VER) developed by the WWF.
Tomorrow was founded with the clear intention of becoming a social business. Therefore, the purpose of Tomorrow - to make a positive impact - is specified in our partner's agreement. That’s a rather generic approach. To take it a step further, we summarized the SDGs into five main categories: protecting natural resources, ensuring basic needs, protecting the climate, empowering disadvantaged groups, and promoting fairness.
To avoid losing sight of what’s important we set up an external board of advisors: our Impact Council. Their task is to ensure that we don’t forget our mission and vision when things get hectic. Once a quarter we discuss what we do with five experts from different fields of sustainability: Which projects do we currently have? And how do these projects contribute to our mission to make the finance industry more sustainable?
Additionally, the members of the Impact Council check whether our investments are in line with our values. They help us to set and follow up on our sustainability goals and build our investment portfolio.
Current members are: Madeleine Alizadeh, Markus Beckmann, Susanna Krüger, Kristina Lunz, Andreas Neukirch