We’ve all seen the headlines about the impending ‘Climate Crisis’ – but we do have a small window of opportunity to take action to protect the planet we live on both for ourselves and for future generations. We are living through unprecedented times, with the UK Government declaring a climate emergency, the number of homeless people on UK streets reaching numbers in excess of 300,000, one in four children affected by poverty and air pollution in cities causing major health problems.
It all seems pretty bleak and as parents, we often ask ourselves what we can do to help make a better future for our kids. Reusable coffee cups. Tick. Switch to a renewable energy provider. Tick. Use the car less. Tick. All these individual actions taken together can have a big collective impact.
It might not be the most obvious action, but your money and how and where you choose to save and invest it can also make a huge difference. It’s called impact investing and it’s one of the most powerful weapons you can use to support your values and help to drive the change that you want to see.
But I’m not an investor…
Even the term ‘investment’ can be off-putting for many people, especially women, as for many years the finance sector has been a male-dominated industry, surrounded by jargon and accessible only to those with thousands of pounds to spare.
But this is not the case anymore! Many more women are realising the power of their £s and that even small amounts of money invested can help make a big difference. At Ethex, our mission is to help everyone take control of their finances and use them to support their values.
Think about it. Every financial product you hold in some way supports some kind of business or industry. Your financial providers re-invest your money to fund organisations and it’s likely you have little say over what these are.
So, in reality, your £s could be supporting some pretty un-ethical businesses that promote practices you openly oppose. But don’t just take our word for it, the Rainforest Action Network (RAN) recently published a report which showed that many of the big banks were still funding fossil fuels including household names such as Barclays, HSBC and Santander.
The good news
It’s not hard to take control and make sure your finances reflect your values.
Start with the products you currently hold. Check with your current providers that your current account, pension or ISAs are all invested in ethical organisations and if they can’t tell you conclusively what your money is funding then you should think about switching to institutions that can.
Do some homework
Also, Good With Money has produced a brilliant jargon free Guide to Impact Investing, it’s a clear and simple guide and must-read for anyone thinking of starting using their money for a positive impact.
The Ethical Consumer website has plenty of handy guides to ethical finance products too, from current accounts, insurance, ISAs and investments, it’s worth checking out if you’re thinking of switching to a more ethical provider.
Join the impact investing revolution
After you’ve reviewed the financial products you currently hold, you might want to consider starting to invest directly into companies or organisations that are actively addressing some of the biggest problems facing society.
And it’s not just for people with lots of money, many providers have a low entry level – as little as £50, and the products themselves are pretty accessible and straightforward to understand.
Choosing an impact investment
Okay, you’re good to get started. But how do you choose where to invest your hard-earned money? Start by working out what makes you tick. What are your values, what motivates you, are you more concerned with local, national or international issues?
Once you know what your priorities are then start out small and look to find your feet. Remember that to minimise risk you should ideally spread several small investments across a range of different products and opportunities.
Make money do good
Nowadays the number of ethical investment funds is proliferating. From sustainable funds to ETFs many impact investment products are available to retail investors. It is even possible to put pension funds accrued into an ethical fund through providers such as Nest. You can also consider Ethex’ funds. From as little as £50 investment and targeted returns of 4%-6% their projects are truly grass roots, as the money is invested directly into a business or project, helping to make a positive difference.
Please be aware that with investments of this type your capital is at risk and returns are not guaranteed. With these types of invesment decisions it’s always best to speak to a professional.