Green neobanks were born of a legitimate intuition: savings should not help fund activities that worsen climate breakdown and the destruction of living systems. By promising more transparency, the exclusion of certain sectors and the funding of transition projects, they made visible a question long reserved for specialists: what does a bank actually do with our money?
This contribution is useful. It should not, however, be mistaken for a transformation of the financial architecture. A banking product can select partners, publish an investment policy or measure a carbon footprint. It generally remains dependent on a credit institution, a payment service provider or a settlement infrastructure it does not fully control.
The point is not to deny the value of these initiatives, but to define their reach. Can they redirect certain flows? Yes. Can they, on their own, decouple money and finance from the extractive economy? No. That limit invites scrutiny not only of banking products, but of the monetary and accounting regime in which they operate.
1. What a green neobank actually is
The term “neobank” covers different legal realities. Some companies are credit institutions; others are payment or electronic money institutions; others still provide a commercial interface backed by a banking partner or a Banking-as-a-Service infrastructure.
This distinction is essential. A payment institution does not hold the same powers as a bank. It does not create bank money by granting credit, and it must protect the funds received from users through the mechanisms set out in applicable law. Safeguarding may take the form of a separate account at a credit institution, an investment in safe and liquid assets, or an equivalent guarantee.
Safeguarding is first of all a legal protection against the risk of a provider failing. It does not mean the money sits in an “ecological reserve” insulated from the rest of the monetary system. Funds may be held at a banking partner, while payments are settled through shared infrastructures.
A layered architecture
For the user, the experience is unified: one app opens an account, receives a salary, pays by card and sometimes subscribes to a savings product. Legally, however, several functions may be split across different entities. A brand designs the interface and the commercial relationship; a provider supplies the cards and transfers; a bank holds or settles the funds; a separate manager may administer the investments.
This arrangement lowers barriers to entry and allows rapid innovation. It also makes responsibility harder to read. When a company states that “your money does not fund fossil fuels,” one should ask which entity holds the funds, under which protection regime, in which assets they are placed, and what the settlement partner’s own policy is.
The right question is not only: “which project is funded by my deposit?” It is also: “which balance-sheet relationships, which guarantees and which infrastructures make this service possible?” That second question does not disqualify a banking product. It simply prevents a screening policy from being mistaken for monetary autonomy.
One outdated assumption also needs correcting: payment institutions are not absolutely barred from all access to central bank infrastructures. In the Eurosystem, certain non-bank providers can now access payment systems such as TARGET, subject to conditions. The access policy was published in July 2024, implemented by a decision of January 2025, then delayed: the amendment to the TARGET Guideline was postponed in May 2025 because some member states had not transposed the relevant directives, and only entered into force in the autumn. The opening is real, but it remained theoretical for more than a year.
This access concerns the settlement of operations and grants these providers neither the status of a bank nor any autonomous power of money creation. Settlement accounts should not be confused with accounts designed to hold clients’ safeguarded funds without limit: the Eurosystem explicitly refused to offer safeguarding accounts, and balances held on settlement accounts are capped.
The dependency is therefore real, but it must be described accurately: it is institutional, technical and economic, not an absolute legal impossibility of accessing any central bank infrastructure.
2. The paradox of ethical earmarking
A green neobank can decide not to fund coal, oil or certain high-emitting companies directly. It can also choose a more transparent partner, or fund bonds and projects meeting environmental criteria. These decisions have concrete reach for the assets actually selected.
They are not enough, however, to make the whole system watertight. Bank money circulates through a network of balance sheets, settlement accounts and credit relationships, and the presence of safeguarded funds at a partner bank does not mechanically prove that every euro enables an additional fossil loan: prudential ratios, liquidity requirements, credit demand, own funds and supervisory rules all interact. What it does show is that the promise of a complete separation between the user’s savings and conventional banking architecture is hard to keep.
The “greening” of a product is therefore a situated improvement, not a systemic rupture. It acts on selection, on transparency, and sometimes on the pressure exerted on financial actors. On its own, it does not transform the rules of money creation, profitability and ecological responsibility.
Fungibility and the limits of traceability
Fungibility does not mean that every deposit directly funds every project. It means that bank money is not a stock of traceable molecules: once the entries are booked, a euro received from a client keeps no material identity allowing each of its effects to be followed. An exclusion policy can therefore be serious at the level of the selected portfolio, while remaining unable to guarantee absolute separation at the level of the system.
Two symmetrical errors must be avoided. The first is to believe that a green label automatically makes the whole financed economy sustainable. The second is to conclude that no banking policy has any effect because money circulates within a fungible system. Credit decisions, investment mandates and the choice of partners do have effects, but those effects are partial and must be measured precisely.
A credible transition must therefore publish not only the composition of a portfolio, but also the selection rules, the intermediaries used, the guarantees mobilised and the limits of what can be claimed. Transparency is only worth something if it states clearly what is actually controlled.
Such caution matters all the more because finance does not directly emit most greenhouse gases. Emissions are produced by real activities — extracting, building, transporting, heating, consuming — while banks and intermediaries make them possible, insure them or advise on them. Their responsibility is indirect, but it is not nil. It bears in particular on the activities they choose to fund, the conditions they impose and the risks they agree to keep.
The strongest critique therefore consists in examining whether a commercial promise suggests a separation that the accounting architecture cannot guarantee.
3. The dilemma of the insolvable essential
In the contemporary system, commercial banks create money when they grant credit: they book a claim as an asset and a deposit as a liability. Credit therefore does not fund what is useful first; it funds what appears able to repay, within a given timeframe and at a risk judged acceptable.
Here lies the dilemma. Consider three activities, not as sector averages but as illustrative cases. The first yields a 5% margin: once financing costs, uncertainty and collateral are factored in, it may look too fragile to the lender. The second yields 15%: it reassures more, because it promises a wider and faster monetary flow. The third restores a soil, protects a water table or cares for people: its costs are immediate and its private revenues are nil, its benefits being collective, diffuse and sometimes visible only several decades later. In private accounting, it appears as pure expenditure.
This contrast does not mean that a 15% margin is necessarily destructive, nor that a 5% activity would necessarily be virtuous. It reveals a filter: the faster an activity turns resources, labour or data into appropriable revenue, the easier it becomes to fund; the more it sustains the conditions of life without being able to sell them, the harder it becomes to fund. This mechanism is developed in detail in “What is the insolvable essential, and how can we finance it?”.
Pollution as cost saving
K. William Kapp showed, in The Social Costs of Private Enterprise (1950), that the harmful effects of production cannot be reduced to the fault of an isolated actor: they arise from the organisation of rights, responsibilities and accounting rules, which allow a firm to transfer part of its costs to third parties without recording them. In this framework, companies do not generally pollute “for pleasure”; they pollute because, with rules unchanged, shifting part of the costs onto air, water, soils or future generations is often the cheapest way to produce.
Genuinely absorbing these ecological costs changes the calculation. Equipping a plant, cleaning up, slowing extraction, using repairable materials or paying for restoration time reduces the available margin if the selling price does not move. If the company passes these expenses on, the final price rises. The exact split between lower margins, higher prices and reduced volumes depends on competition, demand, public support and regulation; but the principle stands: what was free for the producer no longer is.
Human society does not get the behaviours it hopes for. It gets the behaviours its institutions reward.
Real value that does not enter the price
Cleaning up a river can prevent future damage, improve public health and strengthen agricultural resilience without generating revenue proportional to the value produced. The same holds for basic research, care, biodiversity or soil restoration. Their value is immense; their private revenue may be nil.
These are activities that are essential but insolvable in the language of credit. They fail not because they are worthless, but because their benefits are neither easily appropriable, nor quickly monetisable, nor compatible with a repayment schedule. Forcing them into the market — through an offset, a label or an artificial price — may help at the margin, but does not necessarily change the filter that excludes them.
Debt money is not the sole cause of ecological destruction. Regulation, competition, taxation, advertising and power relations matter too. But it reinforces a clear hierarchy: financial return is booked immediately; the regeneration of living systems is often treated as a cost to be covered afterwards.
4. The limits of ESG and incremental finance
ESG labels and the European SFDR regulation can improve available information and impose transparency obligations. They do not remove the trade-offs between return, risk, liquidity and impact. A product classified as “sustainable” can still fund an activity whose overall effects remain contested, or address only part of its value chain.
Channelling capital towards low-impact sectors is also subject to a volume effect. Improved efficiency per unit produced does not guarantee a fall in the total footprint if production and consumption rise in parallel. Green finance must therefore be assessed not only by the composition of its portfolios, but also by the physical volumes, uses and material trajectories it makes possible. This is the effect analysed in “The Jevons Paradox: When Efficiency Accelerates Destruction”.
This is why a transition policy cannot be limited to changing the colour of financial assets. It must act on credit rules, public guarantees, accounting standards, taxation, infrastructures and the very definition of which activities count as priorities.
5. What real green finance should be
If credit suits activities that generate market revenue, another circuit is needed for those that produce a common benefit without private revenue. A regenerative currency would not seek to make the essential artificially profitable: it would directly recognise a verified regenerative service.
Its issuance would therefore not reward a vague promise. It would come after results defined in advance: measured restoration of a soil, verified clean-up, effective protection of a habitat, care or research fulfilling a public mission. The money created would fund the contribution itself, rather than a debt contracted in the hope of making it profitable later.
Issuing, verifying, regulating
Such an architecture requires a strict separation of powers. A democratic body sets priorities; independent expertise defines the indicators and certifies the results; a monetary authority sets an issuance ceiling consistent with real capacities; an appeal body makes decisions contestable. No single organ should choose the projects, certify them and create the money.
Money without debt is not money without limits. Any issuance increases purchasing power. If it exceeds available resources, skills or productive capacity, it can fuel inflation or displace ecological pressures. Payment schedules, ceilings, audits and a reflux mechanism are therefore needed. That reflux does not rest on repayment imposed on the provider: the money issued is withdrawn from circulation through earmarked levies — ecological taxation, usage charges, contributions on extractive activities — and through cancellation of the issuance in cases of fraud or invalidated certification. The balance is struck on the total volume in circulation, not on the individual solvency of the service.
The principle is not to abolish the market. It is to recognise two distinct functions: credit for market activities able to repay; a regulated money creation for the commons whose value does not convert into margin. Trying to fund regeneration with profitability as the only tool is like repairing porcelain with a hammer.
6. What users can actually demand
A customer wishing to reduce the footprint of their finances should ask for documented answers to five questions: which entity holds my money? What mechanism protects the funds? Who decides on loans or investments? What share of the announced impact is direct, indirect or merely estimated? And what data allow the promise to be verified?
A current account remains primarily a payment tool. Choosing a more transparent actor can carry political value and help support an economic model, but it does not replace a decision about long-term savings. For the latter, the relevant criteria are the destination of loans, the composition of funds, exclusions, analytical methods and the capacity to publish results — including limits and failures.
This framework makes it possible to leave behind the sterile duel between accusations of greenwashing and advertising defence. A company can produce a real positive effect while exaggerating the reach of its current account. A bank can publish traceable funding while still facing the limits of the wider economy. Serious analysis means measuring each promise separately.
Conclusion — from greening products to transforming institutions
Green neobanks can play a useful role: they give users more information, put banking practices in competition and make the links between finance and ecological destruction visible. Their action must nonetheless be assessed against what they actually control.
The core of the problem is neither a brand’s intention nor its leaders’ goodwill: it is institutional. As long as the financial architecture primarily values fast monetary flows and undervalues the regeneration of living systems, the green offer remains a local correction to a system whose general logic is unchanged. The debate is therefore not only about a company’s ethics or the colour of a portfolio. It is about the institutions that decide what deserves to be funded, the values recognised by accounting, and the way money is created and destroyed.
Regenerative money is one avenue of rupture: creating a circuit for regenerative activities, anchoring it in verifiable ecological results and fragmenting its governance. This proposal still needs to be discussed, tested and refined. Debunk’Onomy develops it under the name NEMO IMS. It opens an essential question: how can we fund the repair of the world without first requiring that repair to produce a market return?
Verified references
- European Banking Authority (EBA), Register of payment and electronic money institutions under PSD2.
- European Banking Authority (EBA), Q&A 2024_7165, Compliance of non-bank PSPs with the safeguarding requirements in PSD2.
- European Central Bank, Policy on access by non-bank payment service providers to central bank operated payment systems and to central bank accounts, July 2024.
- Decision (EU) 2025/222 of the European Central Bank of 27 January 2025 on access by non-bank payment service providers to Eurosystem central bank operated payment systems.
- European Central Bank, Amendments to TARGET Guideline postponed, MIP News, 15 May 2025.
- Guideline (EU) 2025/1889 of the European Central Bank of 31 July 2025 amending Guideline (EU) 2022/912 (TARGET).
- European Central Bank, TARGET Services Annual Report 2024, section on access by non-bank PSPs.
- Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR).
- K. William Kapp, The Social Costs of Private Enterprise, Harvard University Press, 1950.
Theoretical background
- Nicholas Georgescu-Roegen, The Entropy Law and the Economic Process, Harvard University Press, 1971.
- David Graeber, Debt: The First 5,000 Years, Melville House, 2011.
- Silvio Gesell, Die natürliche Wirtschaftsordnung, 1916 (English translation: The Natural Economic Order, 1929).
Commercial claims about a quantified reduction in carbon footprint are not accepted without a public method, a defined scope and an independent source. This article targets no institution: it analyses the structural limits of the banking, monetary and financial paradigm.
Jean-Christophe Duval