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Goal 13: Climate Action
5 easy ways to go green with your finances
Whatever your income, you can use your cash to help fight climate change
By leanne walstow
13 october 2020
We all know how to use our consumer power to choose more sustainable products when we shop, but when it comes to managing our financial assets there are also huge green gains to be made. This year Richard Curtis’ new initiative Make My Money Matter revealed that moving your pension to a greener fund is 27 times more effective in reducing your carbon footprint than giving up flying and going vegan combined. We’re talking minimal lifestyle impact with maximum eco points. The best part is you don’t have to be rich or even financially-savvy when it comes to ensuring your cash works hard to fight climate change. Here are five easy things you can do right now:
1. Switch your current account
Short of keeping your money hidden under your bed, there’s no way to avoid handing over your paycheck to a bank to keep your earnings safe. But we can be smarter about which bank we trust with our money. Research by the Rainforest Action Network found that the world’s biggest banks invested £1.5 trillion into fossil fuels between 2016 and 2019. Far from ideal. If you want to stash your money with a trusted High Street name, The Co-operative Bank is a great choice - they’ve been ethical since 1992 and even offer the opportunity to donate perks earned by having one of their accounts to a charity of your choice.
2. Make your savings work for the planet, as well as you
One thing that might make you nervous about going green with your money is losing out on advantages offered by big-name banks. However, the good news is that interest rates on ethical savings accounts are very competitive compared to non-ethical providers. Based on a £5000 deposit, Good Housekeeping estimate that you would only lose out on about £20 of interest a year by choosing an ethical bank - hardly a steep price to pay to avoid ecologically dodgy investments. What’s more when you choose an ethical bank, your money is being used to help people. The Ecology Building Society for example uses its deposits to fund loans to charities and community businesses.
3. Pay attention to your pension
If you’re in work, you’re probably paying into a state pension alongside your employer - what many people don’t realise is that even though you have to wait for retirement before you can access this money, you can choose how the money in your pension pot is invested in the meantime. Unfortunately pensions can end up getting invested in all sorts of unethical ventures, including; deforestation, arms, fossil fuels and tobacco companies, which means you might be unwittingly funding these shady industries. The UK’s largest pension fund, Nest has committed to going net zero by 2050, and also make it super simple to switch your pension to their ‘Ethical’ option with just a few clicks. Other pension providers also offer greener choices so get in touch and make the swap.
4. Insure against climate catastrophe
It would be counterintuitive to kit out your home with all the latest eco-gadgets and green energy tools but then insure all of that with a company that invests in fossil fuels, right? Check out the ethical credentials of your insurance providers - given that many insurance policies are sold or underwritten by big banks, it’s surprisingly easy to dig out the stats.
5. Check out your credit card
Even if you don’t need to borrow money, getting a credit card that you then pay off in full each month is a great hack to unlock a range of benefits such as cashback and offers, whilst building yourself a solid credit history. Again, there are plenty of credit cards provided by High Street banks that are easy to investigate when it comes to ethical concerns. Surprisingly, there are a few big names that appear on the lists of ethical cards - Nationwide, The Co-operative Bank (of course) and Metro Bank, a challenger bank that offers great incentives for those using their money abroad.