Keen to give your finances an ethical revamp? Vicky Shaw finds out how to get started.
The pandemic is prompting people to consider more ethical places to keep their money, according to research.
Triodos Bank found over a fifth (22%) of investors say they now feel motivated to explore investing in ethical funds, rising to 35% of under-35s.
Investing is just one of the ways you can use your hard-earned money to support good causes, as well as the environment. There could be plenty of other options for giving your finances an ethical makeover – and it may not be as hard as you think to get started.
Charlene Cranny, campaigns and communications director at Good Money Week (Oct 24-30), which aims to help grow and raise awareness of sustainable, responsible and ethical finance, says: “It’s easy to get bogged down with where to start when planning to give your finances a green overhaul, but there’s no need to be overwhelmed. There are so many easy ways to make greener, cleaner and kinder decisions with our money.
“People who are making steps to reduce their personal impact on the environment might already be reusing coffee cups, bags and bottles, cycling rather than driving, but might not have even thought about where their money is being invested, spent and banked, which can have a huge impact on the environment.”
Here are 10 suggestions from Good Money Week to give your finances an ethical overhaul…
1. Switch current account
Banks use the deposits in the accounts held with them to fund their other banking activities, from loans to investments. This means your money could be funding all sorts of projects that you don’t agree with. Thanks to the Current Account Switch Service, it’s easy to move to an ethical current account.
2. Change energy provider
The number of providers supplying renewable energy in the UK has increased in recent years – and did you know you can compare green energy suppliers? With the Big Clean Switch (bigcleanswitch.org), you can quickly search for planet-friendly gas and electricity suppliers.
3. Shop local
We should all be shopping mindfully and avoiding wasteful purchasing, but when you do need to shop, try going local. Plus, when you shop at the local butcher’s, baker’s, farm shop and greengrocer, a good bulk of the produce has had a relatively short ‘field to fork’ journey. As well as supporting local farmers, this means the food could be wrapped in less single-use plastic packaging.
4. Invest your pension ethically
Your pension can have a huge impact on people and the planet. Pension scheme Nest, for example, recently announced a new climate change policy. Ask your boss or your financial adviser about how ethical your provider is.
5. Move your savings
Although it may feel like sometimes the returns are very low, remember your savings are being put somewhere, working for a company or business somewhere else, so if you aren’t happy, make the move.
6. Consider investments
Abundance is an online platform which offers investments that create something good for the environment and society. Remember though that, as with other investment products, there are risks. Energy4all could also be a good place to start if you want to get involved in something at a local level.
7. Borrow rather than buy
Borrowing existing items, rather than buying new, is kinder to the planet. Some websites will also allow people to borrow items for a set period of time. And if you don’t want to borrow, there are also websites such as Freecycle, where you can get unwanted items for free.
8. Take part in Black Pound Day
Black Pound Day supports and raises awareness of businesses owned by black people. More than simply one day per year, Black Pound Day is a monthly campaign that encourages consumers to switch up their usual shopping destinations to local and online businesses.
9. Lend a small amount of money
If you are fortunate to be able to, you may want to consider lending a little money to someone in the developing world, who is trying to lift themselves out of poverty by running their own business. Lendwithcare.org allows people to lend relatively small sums to people and the money is later repaid. The website cautions though that due to the pandemic, there is a higher risk than normal that repayments will be late or deferred, and in some ‘rare cases’ loans may be written off.
10. Donate to foodbanks
If you are able, buying supplies for your local food bank can be a real help to people in need in your local area, or you could donate monthly through their website.