Banks can be an engine for Peace with the Earth

But not under current lending rules.

When we think about buying a home, what’s the first thing that comes to mind? For most of us, it’s the price. How much does the house cost? How much can I afford? Will it be a good investment in the long run?

But what if we shifted our focus slightly? What if, instead of getting caught up in bidding wars and paying far above the asking price, we thought about how we could actually invest in the house itself? And we’re not talking about expensive countertops or high-end appliances. We’re talking about investing in the home’s environmental performance.

Just now on average, half of the energy use of a house is heating or cooling. If we could halve that, it would leave more energy over to do useful work in the economy and require fewer wind turbine.

A Different Way to Think About Home Investments

Imagine this: instead of spending that extra $50,000 or $100,000 just to outbid someone else, you use that money to make your new home more energy-efficient and sustainable. Think the circular homestead: solar panels, better insulation, heat pumps, or even systems that recycle heat. These aren’t just add-ons—they’re investments that pay off in the long run.

When you make these kinds of improvements, you’re not just lowering your energy bills—though that’s a significant benefit in itself. You’re also reducing your carbon footprint and making your home more resilient for the future, whether that’s facing rising energy costs or the impacts of climate change. Plus, you’re adding real, tangible value to your home.

The Role of Banks in a Sustainable Future

But there’s another crucial aspect to consider—the role of banks. Right now, banks make money by lending large sums to people who want to speculate on rising house prices. This drives up prices and makes homes even less affordable for everyone, without creating any real value for society. But what if we changed the rules?

The proposal is simple but powerful: let banks only lend money for improvements that enhance a home’s environmental performance, not to drive up house prices. This means that the money you borrow wouldn’t go toward paying more than the house is actually worth – valued on, say replacement value – but instead toward making it better, greener, and more sustainable. Banks would still be able to make money—but in a way that contributes to a sustainable future rather than undermining it.

Banks earn most of their money on mortgages. The mortgages are based on a value of the house, which is based on what people are prepared to pay for the house. This means their profits come from literally creating money based on the percentage of their monthly income people are prepared to part with.

The permission to create money like this comes from the government. So what we need is a change in the rules.

A Collective Effort for the Future

This isn’t just about making smarter financial decisions—though it definitely is that. It’s about contributing to a better future for all of us. Imagine a world where every home isn’t just a place to live but a part of the fight against climate change. And where banks, instead of speculating on rising prices, help us build a sustainable future.

We have an opportunity to change how we think about homes and investments. By rethinking how we spend and borrow, we can make our homes part of the solution to the climate crisis, one home at a time.

Let us call on our governments to change banking rules so that bidding up house prices with bank loans is not possible. And investing in sustainable homes is government-backed, with generous grants for example.

Let’s make this vision a reality. If you share our passion for a sustainable future, let’s continue the conversation. Together, we can create a world where our homes are not just safe places to live, but also part of the solution to save our planet.