Making 2022 the year of action

2021 was set out to be the year for climate action – “the make it or break it year” according to United Nations Secretary-General António Guterres at the launch of WMO’s report on the State of the Global Climate 2020 which highlighted accelerating climate change indicators. So, did 2021 deliver? Not really. 

At the beginning of 2022, the UK government’s inaction on climate change was again in the headlines as Friends of the Earth take legal action over the content of the government’s net-zero climate strategy, saying that these policies lack substance as there are no credible plans to reduce carbon emissions at the scale and speed needed. 

Not a great start, but we won’t let this discourage us. And while we wait to see if governments and world leaders deliver on the promises and climate commitments made at COP26, we’re confident that 2022 can be the year of grassroots action against climate change - and each and every one of us can play an active part.

Have you started the year full of good intentions to live a more sustainable lifestyle? There are plenty of steps we can all take to reduce our carbon footprints.  In January, thousands of people will cut out meat and dairy (Veganuary), and it’s estimated that around 15% of car buyers this year will choose an electric vehicle. These are all positive steps, but did you know that there is another, highly impactful change we can all make in 2022?  Whilst we need to recycle, reduce our energy consumption and choose green transport solutions,  what we do with our finances can have up to 21 times more impact when it comes to reducing emissions. 

While not something that immediately springs to mind when thinking about sustainable choices, our personal finances are one of the most powerful weapons we have when it comes to tackling climate change and social inequalities, but for many people, lack of knowledge or trustworthy guidance are major obstacles to taking action.

We know. The thought of trawling through your finances is pretty daunting, but taking the first steps to greener money is actually very simple. Whether you’re an experienced investor or just hold a current account, how you choose to manage your finances can make a big difference. And remember, it’s your money, so you have the right to decide what impact it has. 

Here are 3 easy steps to get started:

 

Most people have a current account and even with your day-to-day financial transactions, our money can be working to help causes and industries you believe in. It’s true that the thought of switching current account providers brings some people out in a cold sweat, but consider this: When your salary is paid into your account, is it actually financing climate change? If you bank with one of the big banks, there’s a fair chance that it is. They all have extensive investments in fossil fuels and other industries that may not align with your values.

The 2021 Banking on Climate Chaos Report gives a detailed and shocking insight into which banks are financing fossil fuels and names and shames the worst offenders. It’s a good place to start to check if your bank is on the naughty list. If you’re not sure, you can ask your current account provider to tell you what they invest in - you have the right to know.

Don’t like what you hear? You can tell them, but by far the best way to make banks sit up and take notice is by moving your money to a more ethical provider. Check out the Good With Money 2022 guide for inspiration. And don’t stress about the hassle, the Current Account Switch Service makes moving your bank account incredibly simple and stress-free. And you can bank on feeling better about your money every day!

Chances are you know who your pension provider is, but can you name the funds your money is invested in and do you know what it’s being used for? 

Research by Friends of the Earth found that UK pension funds have an estimated £128 billion invested in fossil fuels, that’s equivalent to nearly £2,000 for every person in the UK. Are you funding climate change with your pension?

It’s very easy to find out. Simply ask your pension provider or your workplace pension representative to give you a breakdown of the companies your fund invests in and it’ll be easy to tell if they align with your values. Most providers offer at least one ethical fund and you can ask to move your pension pot to that. 

One thing to bear in mind when looking for an ethical pension fund is greenwashing. A lot of providers have sensed the shift in public perception of unethical funds launched ‘ethical’ options that look and sound like a better choice but could still be investing in fossil fuels. 

Moving your pension fund to an ethical one could have several benefits. Not only will you know your money is having a positive environmental impact, but there’s also a chance that sustainable funds could be more resilient in the long term. If you’re unsure about moving your pension fund, you should always consult an IFA for advice.

Whether you already hold a portfolio of investments or you have £50 a month to put away, where you save or invest your money can have a massive environmental impact - good or bad. Like pensions, investment funds can support industries that you personally might oppose and you have the right to find out what your money is being used for. 

Thankfully, there are numerous ethical options now available to investors, but again, you need to beware of greenwashing and look at choosing a fund that actually invests in something positive, rather than one that just avoids investing in the most destructive industries.

If you’re thinking about making sure your investments are having a positive impact on people and the planet, you could consider making direct investments into businesses or organisations that have a clear social and environmental mission. At Ethex, we aim to make it easy for everyday people to use their money to support pioneering grassroots organisations that are making a real change and that need access to finance to grow and achieve even more.

As we know the government is struggling to develop a coherent plan to meet the UK’s net-zero ambitions, it’s clear that grassroots action at scale is critical to help us meet our vital climate targets. More than 20,000 positive investors have already invested over £125 million through Ethex and Energise Africa to directly fund businesses and organisations that are doing good. 

Whether it’s funding sustainable transport infrastructure, community-owned clean energy generation, affordable, renewable energy access in developing countries or tackling social issues such as homelessness, every pound invested through our platforms is put to work doing something positive!

And it’s not just for experienced investors. People are investing as little as £50. It doesn’t seem like much, but collectively it can have a huge impact. As one of our investors said in their TrustPilot review “Every person has the power to make the difference. Ethex has some meaningful and thoughtful projects to place your support and money.” 

Ethex CEO Lisa Ashford says: “After the somewhat underwhelming outcome of the much-anticipated COP 26 Summit last year, we really feel that 2022 is the year of grassroots action. Whether that’s supporting some of the extraordinary organisations who are making a real difference, or simply changing how we bank, collectively we can make a real positive impact. We’re incredibly proud of what our investors have achieved so far, but we know we can all do a lot more and we’re willing everyone to start taking action with their money this year!”

If you want to learn more about the investment opportunities offered by Ethex and Energise Africa, visit our websites.
Please note that when investing, capital is at risk and returns are not guaranteed.