Inside Tandem Bank's Plan to Offset 100% of Its Emissions

Tandem Bank is making waves in the banking sector by committing to offset 100% of its operational emissions.

In collaboration with Climate Impact Partners, the bank aims to reduce its environmental footprint while advancing its green banking credentials.

The initiative, unveiled during Earth Day 2024 celebrations, highlights Tandem’s dedication to sustainable banking and long-term climate action.

Tandem Bank has built its reputation as a pioneer in green banking, offering products designed to help customers embrace eco-friendly lifestyles. Unlike many financial institutions accused of funding environmentally damaging projects, Tandem steers clear of investments in fossil fuels. Instead, it channels its resources into low-carbon initiatives and renewable energy projects.

One area of focus is East Africa, where the bank supports solar energy developments to counter reliance on fossil fuels. 

Through loans for energy-efficient home improvements and green savings accounts, Tandem positions itself as a partner in sustainability for its customers.

Tandem’s efforts go beyond merely avoiding harmful projects. The bank actively seeks to reduce environmental harm and support global efforts to combat climate change.

The emissions challenge

Tandem’s approach addresses a fundamental challenge for banks: tackling indirect emissions. 

Financial institutions are unlike manufacturers or retailers, which directly create emissions through production or logistics.

Instead, banks produce emissions through their operations - such as energy consumption in offices or employee travel - and indirectly through investments, loans and underwriting.

A 2021 report by climate non-profit CDP found that emissions tied to banks' financial activities are more than 700 times higher, on average, than their operational emissions. These emissions fall into Scope 3, which includes all indirect emissions throughout an organisation’s value chain.

Tandem has already made strides in cutting its direct emissions. By 2023, it achieved a 100% reduction in Scope 2 emissions, which cover indirect emissions from purchased energy, by powering all operations with renewable energy.

In addition, it managed to cut its customers’ emissions by 74,000 tonnes of CO2 equivalent (CO2e).

However, Scope 3 emissions remain the most challenging to address. Financial activities like lending or investing require more innovative solutions, including partnerships and specific sustainability-focused lending models.

Despite this, there is potential in sustainability-linked loans. These are financial products with terms tied to measurable ESG criteria. Such strategies align closely with Tandem’s business model and green mission.

Offsetting and beyond

Tandem’s new initiative focuses on offsetting Scope 3 emissions by purchasing 3,013 tonnes of carbon credits. These credits will fund Rooftop Solar Energy projects in East Africa, bringing solar lighting to households in Kenya and Uganda.

The benefits extend beyond carbon reduction. Cleaner energy sources improve indoor air quality, which is crucial in regions where households rely on polluting fuels for cooking and lighting.

Additionally, the projects make affordable energy more accessible, reducing the strain on communities already grappling with the effects of climate change.

While offsetting isn’t a long-term solution, it provides an effective way to tackle unavoidable emissions in the short term.

Tandem’s CEO, Alex Mollart, emphasises this balance: “As we work towards our own net zero targets, offsetting lets us act now.

"Partnering with Climate Impact Partners, with their 20+ years of expertise in carbon offsetting, means we know the projects we support are making a real, verified impact on the climate," Alex continues. 

Tandem’s initiative shows how banks can integrate immediate actions, like offsetting, with long-term sustainability strategies.

Leading the way in green banking

Tandem Bank’s commitment to 100% operational emissions offsetting is an example for others in the sector.

By prioritising internal reductions alongside external offsetting projects, the bank demonstrates that financial services can embrace environmental responsibility without compromising growth or innovation.

Its combined approach, reducing emissions and supporting impactful renewable energy projects, proves that banking doesn’t have to cost the Earth.

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