New climate-finance campaign targets Costco’s credit cards

Your co-branded retailer credit card might have a bigger climate impact than you think.

A first-of-its-kind report looks at the 20 largest credit card issuers in the United States and evaluates whether they were in line with the International Energy Agency’s net-zero by 2050 pathway between 2021 and 2024. The report, titled Better Options: How Large Companies and Nonprofits Can Select a Climate-Aligned Credit Card Partner, was produced by Stop the Money Pipeline, a coalition of environmental groups targeting banks and insurers, and released on February 18.

Of the 20 institutions examined, 12 finance the fossil fuel industry, including expansion projects. The report, which was developed in collaboration with groups like Rainforest Action Network, Reclaim Finance and Stand.earth, also outlined how six of these 12 institutions, such as Barclays, Capital One Financial and TD Bank, increased financing for the fossil fuel industry between 2021 and 2024. Seven of the 12 decreased financing for sustainable energy projects, such as UMB Group and Citibank. All 12 need to increase their spending on sustainable energy at least 13-fold compared to fossil fuel financing to align with net-zero by 2025 targets.

“We wanted to look at credit cards,” says Sarah Lasoff, lead author of the report and special projects manager at Stop the Money Pipeline, because there is a “viable and ambitiously climate-aligned action that companies can take.”

Changing banking institutions can be a huge undertaking for companies, non-profits or governments, Lasoff says. “Whereas a credit card partnership, you can just choose another one of these large credit card partners, because they can issue millions of credit cards, and they’re not funnelling billions into the fossil fuel industry.”

The remaining eight better-option institutions, such as American Express and Synchrony, did not finance the fossil fuel industry. Instead of commercial or investment banking, these institutions specialized in issuing credit cards, as credit unions or as smaller regional banks.

It’s really rare that we have an opportunity to potentially move so much money towards a financial institution that is doing the right thing and away from a financial institution that is doing the wrong thing.

– Sarah Lasoff, Stop the Money Pipeline

According to another report released last spring, The Carbon Bankroll 2.0 by Topo Finance, the financial institute that a company chooses to partner with may be their largest source of indirect emissions. However, tracking emissions from a company’s financial institution is not yet a standardized practice, Lasoff says. It also means that companies should look for financial institutions that align with their own sustainability goals. “If companies started choosing the better options, there would be a market incentive for financial institutions to move away from financing the fossil fuel industry,” Lasoff says. Companies that have net-zero 2050 targets might be unaware that their credit card partner is misaligned with their own corporate climate ambitions.

The Costco case

Costco, for example, is a company that Lasoff says has demonstrated that it cares about things like diversity and inclusion, its workers and the climate. But Costco’s credit card partnership with Citibank, the second-largest funder of the fossil fuel industry worldwide between 2021 and 2024, is misaligned with its climate ambitions. And Costco’s partnership is significant for Citibank: it makes up 15.8% of all its credit cards issued.

Lasoff says that this is an opportunity for Costco to do what it already does but better, and to maximize its positive climate impact. “We don’t believe that Costco wants to contribute to the pollution of communities in the Gulf South and contribute to global warming, which is creating . . . more dangerous climate disasters.”

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Costco’s co-branded credit card partnership with Citibank is set to expire in 2029, and procurement of a new partnership could start as early as 2027. Lasoff says that previously Costco had a partnership with one of the better options, American Express, and she hopes that by sharing the report with Costco, it can make choices aligned with its climate goals. Lasoff says that Costco has received a copy of the report but has not yet responded. Costco also did not immediately respond to a request for a comment.

In addition to Costco, Citigroup has credit card partnerships with Best Buy, ExxonMobil, Home Depot and others. The report also mentions other partnerships with the worse fossil-fuel-funding financial institutions. For instance, JPMorgan Chase has credit cards with Air Canada, British Airways, United Airways, Hyatt Hotels, Marriott Hotels, Amazon and others.

Equipped with information about which financial institutions are the better options, companies can now decide to partner with financial institutions that are not financing climate change.
“It’s really rare that we have an opportunity to potentially move so much money towards a financial institution that is doing the right thing and away from a financial institution that is doing the wrong thing,” Lasoff says.

Ashley Perl is a Canadian freelance journalist based in Stockholm.