We often forget that our money is one of the most powerful
tools for making a stand on environmental sustainability (see UN Sustainability Goals). Whether you have a small amount in your
current bank or savings account, or thousands in your pension pot, using your finances
to cut your carbon emissions is more significant than giving up flying or going
vegetarian. So why not take stock on how you use your money.
Who do you bank
with? Where are your savings, pension or investments deposited? Making the right choices can significantly reduce
the size of your carbon footprint as well as helping to protect the natural
world.
How green is your bank?
Personal
banking, savings and investment can all contribute positively to a more
sustainable planet; making the wrong choices can have significant negative
effects.
When you put
your money into a current account or savings, it doesn't just sit there;
substantial sums are used to support individuals and businesses and generate profit. Some of these
investments benefit the environment; others cause substantial harm. Though they
would have you believe otherwise, the ’
big five’ high street banks are variously still financing coal, oil & gas,
supporting nuclear weapons (see:dontbankonthebomb), are involved in human rights abuse and/or facilitating wetland or rainforest destruction. The number of greenwashing instances in 2023 (misleading sustainability-related
claims to investors or consumers) involving UK banks rose by 70%, much of it
related to claims about fossil fuels.
‘Banking on Climate Chaos’ reports how since the Paris Climate Agreement in 2015, the world 60 biggest
banks have financed fossil fuels to the tune of $38 trillion. Indeed our
present UK Government continues to press ahead with new fossil fuel investments
boosting research and extraction and extending offshore drilling in the massive
new Rosebank oilfield. Worse still the
public are effectively subsidising more than 90% of the costs (£2.8 billion)
through a deliberate loophole in its windfall tax. 2023 was the hottest year on record with freak
weather events across the globe and global carbon emissions at an all-time high
and the UK Government appears to be ignoring the stark warning from its own
Climate Change Committee that it is not on track to meet its declared targets
and is losing its position as a former global leader on climate.
Ethical banks or building societies avoid
investing in environmentally harmful or otherwise unethical industries enabling
you to have a say in how your money is used and often to support causes
important to you. This might involve reducing the impact of climate change, or
avoiding gambling or animal testing. ‘Good with Money’ lists the top 7 ethical
accounts in 2024. Consider
changing to one of the ethical banks (Triodos, Starling, Monzo, Charity Bank, or Nationwide and other building societies); for more details visit this posting on 'Good with money'.
How green is your pension?
We know that greening your pension cuts
your carbon footprint 21 times more than going veggie, stopping flying and
changing your energy provider combined. But which scheme is the greenest?
After the hottest year on record ‘Make my money matter’ recently produced what they claim is the first ever
ranking of pension providers. Even top ranking Aviva and Legal and General still
only score just over 5 out of 10! Why not check up how your pension company uses you
money and then visit Ethical Investors.
Your money has power; plan to use it wisely to make a positive contribution to the health of the planet.