Under the Microscope: The True Costs of Banking

Hass McCook compares the relative sustainability of the bitcoin network with the legacy banking system.

AccessTimeIconJul 12, 2014 at 12:15 p.m. UTC
Updated Sep 11, 2021 at 10:58 a.m. UTC

It is very hard to quantify the global impact of the banking and finance system, however, there are some key figures that we can draw on for an order-of-magnitude estimate.

The World Bank publishes several world development indicators, of which one is financial access. The table below shows their data and associated estimate calculations (World Bank, 2014), based on a world adult population of 5.325 billion people (Indexmundi, 2013).

Hass McCook, Table 15
Hass McCook, Table 15

A model developed by the CoolClimate Network at one of the world’s leading and most respected universities, the University of California, Berkeley (CoolClimate Network, 2014), assesses the carbon footprint of businesses based on business sector, the number of locations, employees, annual revenue, and square feet of facilities.

This allows us to estimate the carbon footprint of the world banking and finance industry within an order of magnitude. Inputs into the model are calculated below.

Bank branches

Model inputs

Number of employees

While it is difficult to quantify the number of people employed by the world’s banking and finance industry, using the Pareto principle (80-20 rule), the world’s largest 20% of banks most likely employ 80% of all banking employees. Employee statistics for the world’s largest 30 banks are shown in the table below.

Table 16 - Number of People Employed by the World's 30 Largest Banks

Bank NameNo. EmployeesSource
Agricultural Bank of China444,238abchina.com
Industrial & Commercial Bank of China405,354www.icbc.com.cn
China Construction Bank329,338www.ccb.com/en/home/index.html
State Bank of India295,696www.sbi.co.in
Bank of China288,867www.boc.cn
Wells Fargo & Co264,900www.wellsfargo.com
JP Morgan Chase & Co255,041www.jpmorganchase.com
HSBC Holdings254,066www.hsbc.com
Citigroup Inc.251,000www.citigroup.com
Bank of America242,000www.bankofamerica.com
BNP Paribas200,000www.bnpparibas.com
Banco Santander186,763www.santander.com
Société Générale171,955www.societegenerale.com
Crédit Agricole Group161,280www.credit-agricole.com
Unicredit Group148,341www.unicreditgroup.eu
Barclays PLC139,900www.barclays.com
Banco do Brasil118,900www.bb.com.br
Royal Bank of Scotland Group118,600www.rbs.com
Group BPCE115,000http://www.bpce.fr/en/
Lloyds Banking Group104,000www.lloydsbankinggroup.com
Banco Bradesco103,385www.bradesco.com.br
Deutsche Bank98,219www.db.com
ING Group84,718www.ing.com
Mitsubishi UFJ Financial Group80,900www.mufg.jp
Royal Bank of Canada80,000www.rbc.com
Bank of Communications Limited79,122www.bankcomm.com
Toronto-Dominion Bank78,748www.td.com
US Bancorp65,565www.usbank.com

Assuming that the 5,561,220 figure in the table above represents 80% of all bank employees, it can be concluded that there are a total of at least seven million people employed by banks and financial institutions internationally.

Annual revenue

An analysis undertaken by McKinsey & Company in 2012 shows global banking revenue of $3.4tn (McKinsey & Company, 2012).

Square foot area of facilities

From personal experience designing offices in Australia, a good rule of thumb is about 100 square feet per employee (10 square metres) to satisfy access and egress requirements in commercial building codes.

An area of 50-150 ft2 is recommended by the online US resource Engineering Toolbox (Engineering Toolbox, 2013). Using a value of 100 ft2 leads to a total area of about 60 million ft2 for the world’s 600,000 bank branches.

Model output and sensitivity analysis

Plugging the above inputs into the UCB model yields a result of 383.1 million tonnes of CO2 per year. A sensitivity analysis using four other scenarios shows little difference in overall footprint. Because the data on revenue is accurate, that variable remains fixed in all scenarios.

Hass McCook, Table 17
Hass McCook, Table 17

As can be seen from Table 17, the governing factor of the model appears to be the amount of yearly revenue generated, as significant changes to number of employees and branches have little effect on the model output.

Sense check

The World Resource Institute categorises world greenhouse gas emissions by end-use and activity (World Resources Institute, 2009).

In its 2009 report, it was identified that commercial buildings account for 6.3% of world emissions, and the mining of non-ferrous metals (including gold) and aluminium account for 1.3% – an impact ratio of commercial buildings to mining of 4.86.

Considering that only a relatively small amount of gold is mined every year (a few thousand tonnes), it is assumed that banks account for larger proportion of all commercial buildings, as gold mining does for non-ferrous metal mining.

This would mean that banks should have an impact of between six to eight times greater than that of gold. Having calculated a value of 54 million tonnes of CO2 produced by the gold mining industry, this would put the impact of the banking industry between 324 and 432 million tonnes of CO2, which is well within the same ballpark as the value of 380 million tonnes calculated by the UCB model.


While ATMs reduce the need for bank branches, these machines have their own carbon footprint which isn’t insignificant.

It is estimated that each of the world’s 2,394,700 ATMs has an energy usage of 0.25 kWh (Roth, et al., 2002). This translates to a yearly energy use of 18.9 million GJ, or 3.2 million tonnes of CO2.


The environmental impact of the world’s financial access points are summarised in the table below

Hass McCook, Table 18
Hass McCook, Table 18

Using the rate of $100/MWh, the above energy use would equate to an annual energy bill of $63.8bn, or, roughly 2% of total revenue.

At 0.75 million tonnes of CO2 produced per year, Bitcoin has 99.8% fewer emissions than the banking system.

Check back next week for the concluding article in the series, in which Hass McCook undertakes a comparative summary of all three areas to evaluate the relative sustainability of the bitcoin network.

Bank image via Shutterstock


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