What I love about going green is changing. Change is great, it is what is required to fight the climate emergency and reintroduce us to a planet caring society. Learning new things and finding out something you did not know and understanding how you can make a change to better the planet is incredibly exciting to me. On my journey to be a green and sustainable individual I have learnt about how banks can be evil (not much of a surprise in the big corporate world run by the few) and how this has a big impact on our world. Now, I always knew banks look after themselves but naively thought they would still have some ethics. Unfortunately, they do not! Now I am taking the environment seriously and helping to protect and save the planet I am trying to change every aspect I can to achieve that. In this blog post I will go into how banks work, how they can be bad for the environment, what are green banks and what I have done and you can do to make a difference.
How do banks work?
Surely, banks just hold our money for us, there is no harm in that! Well unfortunately no, banks make money from interest they earn by lending out money (our money), usually to companies and large ventures. They use the millions of people’s money in their banks and lend this out, so they can make some of their own. They are able to make such large returns because they get to put a significantly larger interest rate on the money they lend out compared to what they give us for storing our money with them. This gives them a huge return from our money.
Are Banks Green?
Again, unfortunately no, typically a bank will lend our money to practically anyone, Including fossil fuel conglomerates, plastic manufactures to a wide range of harmeful companies. They are typically not concerned about creating greater harm than good as long as they believe these companies can make a good return and pay them back with interest of course. I shouldn’t have to say how this will obviously lead to your money directly funding the killing of our planet and its inhabitance. This is why we need to ask the question when storing our money with a bank; who, what and where will they lend your money? You should also be careful of greenwashing where banks might make their products seem enviornmentally considerate when in fact they are not. You need to decide if you want your money to be used by the corrupt or not? If not, you might want to check your bank and perhaps move your money.
Are there Green Banks?
Yes, although I think they are harder to find and are not typically on our highstreets and I would also say there is a spectrum to how environmentally considerate they are but there is definitely some. I would say your first point of call is to avoid banks that do the most harm, a bit of research will show you what banks are still backing the worst companies, so in my opinion get your money out of them and close your bank account down. I have seen banks such as Barclays, HSBC and NatWest to name a few that are advised to avoid if you have any considerations for ethics and the environment. As for a green bank there are certainly some, which again require a bit of research to see if a bank is green. I have seen articles stating Triodos, co-operative, Monzo and Starling to name a few that have better consideration for ethics and environments, so perhaps start there.
What to Look for?
When looking into a bank you want to see what they invest in, where they put your money, and what their corporate responsibilities are like. You also want to look for banks that invest in eco-friendly and sustainable products, businesses and services but also have great corporate responsibilities (how they treat their employees and you). Ask questions like how do they take care of the environment, communities and their customers. Also, look at the products you want to use from them. Especially when looking at investing look for terms such as ESG (Environmental Social and Governance) or SRI (Socially Responsible Investments) that typically indicate a more ethical collection of companies. It might be hard to find a wonder bank that is perfect in every way but there are certainly some that are better than others in terms of the environment and ethics. Aim to bank with these if you want to care for our planet and communities.
What have I done?
Well the first thing I did when I found out about how my money was being used to invest in companies I did not agree with was to close down my bank account with the worst notoriety (for me it was Barclays). I then looked for a green banks that I could store my money in and use regularly and opened an account with them. It was a simple change and one that helps me on my journey to being a more eco-friendly, sustainable individual.
I believe we tend not to think about things we do not see in our daily lives. Yet we have a much bigger impact on the planet than we think. This is especially true for our money, from the items we purchase to the places we hold it. Therefore, we need to transition all aspects of our life to those that are sustainable and better for our future. Remember that even if a bank looks green or sustainable they might not be, despite the friendly adverts they have (don't fall for greenwashing!). Always do your research and pick one that can meets your needs but also your own ethics. Also, let me know; What do you think about green banking? Have you researched your current account and see what they do with your money? Are you going to make the switch?
Eco-investing is a growing term used to signify someone investing with a conscious thought towards the environment. This type of green investing is fast growing, as with many eco-conscious people who have an interest in sustainability, the environment and hopefully creating a strong financial future through investing. Now, before I go on, to make things clear I am not a financial advisor and not very well versed in the subject of investing at all. Therefore, you should not think of any of this as financial advice. However, I am investing to hopefully make a return, whilst making a conscious effort to not negatively impact the world just to line my own pockets. Always remember you could lose all the money you invest, so you should only do so if you have money to spare and are willing to take that risk. Additionally, if you want advice on your own finances and investment goals I would advise you to speak to a finance advisor. This blog post is to give you an insight to eco-investing, some things you might want to consider when investing and what I am doing to invest sustainably.
What is eco-investing?
Eco-investing, sustainable investing or green investing is a way of investing in companies that provide environmentally friendly products and/or practices. It is also a form of socially responsible investing. Developing a conscious awareness for the environment should reach to all aspects of your life. This should reach to any endeavours you have, including investing. Therefore, looking at investing in companies that help mitigate any negative impact they have or even help the environment is crucial in this goal. Yet, as seen with many of the rich, famous and conglomerates they will do anything to further grow their own wealth with no care for the environment or even society as whole. Eco-investing is a way to potentially grow your wealth but with a conscience, helping our future to be green and sustainable.
Should you invest?
You are likely already investing through your pension plan, where eco-investing can also apply. However, if you are asking if you should invest outside your pension then this is a personal choice you need to make yourself. This is because it depends on your personal circumstance, as well as your goals and ambitions. Investing can be incredibly risky but also rewarding and only you can decide whether it is right for you. I never invest money I don’t have and understand I might lose all the money I have invested but I am also happy to take that risk in the hopes that it will increase. Most of the research I have found shows how if you invest for the long term, you will typically end up in the positive and if you do it for long enough it can drastically increase your wealth. As I have mentioned, you should do some research, be aware of the risks and your opportunity cost and if you believe it is right for you, give it a shot. I also advise if you are not sure or want specific investing advice relevant to you to seek a financial advisor.
Why does investing concern the environment?
Essentially, where you put your money dictates what companies do. This goes for where you store your money, what you buy, as well as where you invest. The more that people buy eco-friendly, sustainable items, products or investments and demand companies to supply them the more eco-friendly versions we will get and it is growing fast. This makes the world a better place. We do not just want our products to be eco-friendly, we want the companies making them to also be green. When you invest your money goes to helping a company grow and develop and continue to provide their product or service. Therefore, your money is going towards that company's impacts, ethics and practices (good and bad). Unfortunately, there are too many companies doing terrible things to nature, society, the environment and our planet just to make money. However, there are also companies that do care and are leading the way for a greener future. This is why you can invest to hopefully make money but also back these great companies.
What am I doing?
Well I hope to invest in several ways that of course meet my ethics of being green and environmental, which I will be sure to continue to track and blog on here. However, due to my limited time to properly search individual stocks and shares I wouldn’t know where to begin, at least yet. As I mentioned above, I am thinking of the long term. For me this is 20-30+ years and I understand that one of the easiest ways to do this is with index funds. This should help outperform inflation and can often outperform the top investment banker. Therefore, this is going to be my strategy, to simply invest into index funds, which meet my personal ethics and which I hope creates the foundations of my investment portfolio.
What I needed first was an investment platform that allows you to buy stock, funds and indexes. I have chosen Vanguard, as I have heard it mentioned by many to be a good platform with relatively low fees. Through this, I have then looked for two key phrases, this is Social responsible Investing (SRI’s) and Environmental, Social Governance (ESG’s). This is what I am going to invest in ESG and SRI funds. To be exact I have invested in several funds that track these, one ESG Index fund, one ESG emerging markets index fund and one SRI Stock fund to name a few. I have gone into depth these terms below:
What is ESG?
Now, when thinking of sustainability and looking at a group of stocks or an index that allows your investments to be spread across multiple industries, locations but with ethics you might want to look for ESG funds. ESG stands for Environment, Social, Governance, which are three broad categories that are also linked with “socially responsible investors” (more below). It is a general term used by investors that looks at evaluating corporate behaviour to determine if a company meets social and environmental criterias, better than other typical stocks. ESG is a growing term and is quickly growing interest, especially in the younger generation of investors. Some of the things ESG funds focus on when evaluating a company's sustainability is the following;
Environmentally a number of categories might be reviewed such as the company's carbon footprint, water disposal, climate change policies, energy consumption and recycling efforts, etc.
Socially a company will be reviewed in regards to how it addresses issues with its employees, suppliers and customers etc. This will be looking at compensation, benefits, training, consumer protection, ethical supply chain and safety precautions to list a few.
Governance wise it will look at the ethics of the business, the management and business independence. This will look at the history of the company's legal issues, shareholder voting rights, addressing conflict of interest, and other ethical business practices.
What is SRI?
SRI stands for Socially Responsible Investing and is another term to note ‘green’, ethical and sustainable developments. Like ESGs it looks to create a financial return but also environmental and social good, creating a positive change. This again has a rigorous investment standard to identify those companies that can meet this criteria but still give a competitive return. The goal is about making a positive social impact, so again better than your generic stocks that could drastically harm our planet and in the long run does not benefit society.
My Strategy
I have chosen to passively invest into index funds as they are a collective of stocks/companies that overall reduce your risk by spreading your investment. There are also many to choose from including ones that are ESGs and SRIs. To do this I have used Vanguard as it appears to be a well known investment platform and they offer a number of funds that meet my criteria. I am then going to invest in several of them using pound cost averaging (dollar cost averaging, etc.) This is when you invest regularly (drip feeding) into your investment. I am using this strategy as I do not have a large sum of money and it allows me to slowly build up my portfolio over time. Also, as it is nearly impossible to accurately time the market it allows me to continue to buy across multiple years giving me an average purchasing price. As the market typically heads upwards this will hopefully show a positive that outperforms inflation. My strategy is long term to either boost my pension, allow me to retire early, and possibly even create generational wealth for my family, so we are talking 20-40 years. It is a patience game but one that I believe will work out.
What’s Next?
Well, I hope to do some more posts about eco-friendly, sustainable and green finances, so you can make your own decision about what to do with your money. I also intend to continue updating on my financial achievements and goals to hold myself accountable and hopefully prove it can be a viable option to grow your wealth, while caring for the planet. I want to look into more areas of my finances including the banks I use, the pensions I have and potential other investments I might undertake. My goal in all of this is to highlight the potential way to grow your wealth, while not backing companies that destroy the planet. This post is to show one of the ways I have begun investing consciously based on my own research. However, I would love to hear the companies or industries you have backed or believe are worthy of investing taking ethics, sustainability and society into account.
Updated: Jul 18, 2023
Sustainability, ethics, eco-friendliness and being green is the future. It must be for the sake our planet, the wildlife and the human race as a whole. Yet unfortunately we aren’t all eco-friendly individuals or nearly as good as we can be. Yet as a community we are growing. On this blog I explore everything green from the environment to products that stop the harmful waste and help mitigate our daily negative impact on earth. Recently, I have thought about what are the barrier to going green, what is stoppping us as a planet (or at least in my country) from fully adopting a ‘green’ life. Therefore, I have pulled together what I consider to be the big barriers to going ‘Green’. Although this list could easily be very long trying to highlight all the issues with us going eco-conscious I have tried to highlight the mains ones I believe have the greatest impact. Here are my top reasons that prevent the majority adopting a green, sustainable and eco-friendly future.
Cost
Unfortunately, anything new will have a higher cost, this is mainly because it is new to the market, so might not have an instant ‘demand’ for the product. This often means they are produced in smaller quantities, which again will not be as efficient, increasing their costs. ‘Green’ products are also of a higher quality and use raw materials that are generally more expensive. They also have better ethics and have a lower negative environmental impact, which is why I believe we need to expect and accept a higher cost. To make products right, without harming the planet, paying its workers and supply chain fairly and for innovation for future green products it will cost more. Unfortunately, for years we have been buying products without knowing fully where they are from and this includes from sweat factories, child labour and more horrendous abuse of workers and the environment, we cannot have this wilful ignorance going forward into a ‘green’ future. To summarise ‘green’ products tend to cost more because they use raw materials that are usually more expensive, produced in smaller quantities, often of better quality and can have a small premium to ensure it is ethical, less harmful to the planet and even potentially having a positive benefit. Unfortunately, this can all greatly increase the price.
What can we do?
Where you can keep buying 'green'. The more that we do they will be mass produced making them cheaper. It will also lead to new technologies and innovation that are green and cheaper. Take it slow but over time you can obtain a collection of jars and bottles to use at your local zero waste store. Further to this, although many ‘green’ products have a higher cost they are often built to last and is reusable, which can make them cheaper in the long run. Finally, we also need to understand ‘green’ will cost more. To pay people fairly, have the additional measures so they do not harm the environment and to be made of a higher quality and to last this will always be the case. Perhaps think it as not paying more but paying fair.
Lack of Time
Another big impact is our lack of time. Unfortunately, when I grew up we are not taught what to look out for, how we harm our planet or much about sustainability and being ‘green’. Although, I believe this is changing now there are still millions who do not know where to begin or what is actually ‘green’. However, I understand that many of us do not have time to research and get educated on these subjects. It takes a lot of time to learn what it means to be ‘green’, what products or way of life is truly ‘green’ or to find the eco alternatives to fit into our life. As well as all the actions we need to do to negate the negative or increase the positive impacts on our planet. This all takes a tremendous amount of time, which I understand not everyone has.
What can we do?
Start slow, it is not a race. Any step, no matter how small toward a ‘greener’ world is great. So spending any time to achieve this is beneficial. Over time you can grow your knowledge and implement systems that make a change and help our planet. Just keep trying.
I know this is a bit of a self-promotion but follow on your socials or go to the blogs of eco, ethical and environmental bloggers. They spend a lot of time looking for ‘green’ products, summarising what to look out for and how you can help our planet, so by following them you can slowly learn more and make changes.
Greenwashing
Greenwashing is when companies make unsubstantiated claims to deceive consumer into believing their products are environmentally friendly when in fact they are hiding the negative impacts of their products from our sights. Unfortunately, people and companies lie or misdirect and this is done a lot with ‘green’ products. A product or service that is ‘green’ is more likely to sell, as it is what most people want. Therefore, if companies can make you believe that their products are green it is better for them. Most companies stick phrases like eco, environmental and the like onto their products without there being any true basis for it. At the moment these terms are not protect, so can be used by anyone without justification. Therefore, we need to remain vigilant to look out for unfounded claims or hidden negative parts of a product or service before we purchase them. If you want to know more on this, please read my article on greenwashing ‘Greenwashing: An Evil Mask!’
What can we do?
Get Educated! Learn to look out for how companies greenwash and what real sustainable, eco-friendly products are, so you can make an educated decision. This will take time to learn but once you have learnt the principles they can be applied everywhere. When making a purchase ask more, ask about the product, ask what makes it green, is it truly recyclable or meets the cradle-to-cradle principles. Once you have learnt what harms the planet and its inhabitants you can make choices to not contribute to that. Do not just take the word of a company but look at the companies actions and the impact of its products and service and together we can beat greenwashing.
Infrastructure
In the large societies we are living in today and with the controlling systems our governments have forced us into we are incredibly dependant on the infrastructure they put in place. This includes a wide variety of things including transport, energy, food, packaging and the very way we live our lives in our countries. The reason this can be a problem is because unfortunately the solutions to these issues are not always ‘green’ and can even be harmful to the planet. For example so much food comes in plastic, which is practically unavoidable if you want to live some what of a normal life. Also, the energy systems in place that we are reliant on for our survival might be reliant on oil and gas, which I do not have to explain how this impacts our planet. We are part of the system and the system forms our lives, so this can often control how ‘green’ our lives can be.
What can we do?
To solve this problem, we need to go to the source. This is the government and large corporation that produce our daily products and control so much of our lives. We must put pressure on them and demand they do better. You can do this in a variety of ways such as emailing them, signing petitions, protesting and joining groups that fight for our planet (peacfully of course). I always think we should try to start at work, this might not be easy but push for little changes there and over time the improvements will mount up everywhere. Keep making changes and demanding them and eventually we will have a 'green' way of life.
At the moment I believe there are a number of barriers that are preventing a ‘green’ future being fully adopted. Above are some of the largest barriers that need to be solved for the sake of our future. I wanted to raise these points, so we can better understand them, begin to discuss them and to help us reach a solution. To me I believe the biggest barrier to most is the cost, even if you want to be the perfect ‘green’ individual it can be almost impossible making you bankrupt. However, I do believe it is slowly getting better and more affordable. I also believe if more of us keep pushing and keep trying to be ‘green’ it will become the new norm and easier for all. I would be interested to know what you think is preventing a greener future and what we can do about it?
