Whilst ethical investing is a means of supporting causes and organisations that are fighting climate change and social injustice, many of us don’t know exactly where our money is invested.
Unfortunately, lack of transparency and awareness about what our money is being used for often has shocking unethical consequences.
It could mean that you are inadvertently supporting something that you would actively fight against in other areas of your life.
Ruby Reed from theAdvayaInitiative shares her top tips and tricks on ethical investing.
She tells us how we can make our money greener, so that it works for the planet as well as for us.
Green Money Is Green Power
Money lies at the foundation of our economic system and facilitatessocial movement, the distribution of resources and the exchange of knowledge, services andskills.
Money is one our greatest inventions and is a cornerstone of modern society, yet commercial interests, unethical practices and hierarchical power structures have come to paint a very different picture.
What Is Ethical or ESG Investing?
There are two types of ethical investing and it is important to examine the ethics of both.
1. There are the investments you make with your own personal money and have total authority over.
2. Then there are the investments that the brands and companies you shop from hold themselves.
When you consume from these organisations, you are indirectly supporting whatever they hold investments in.
Both forms of investing have the potential to effect meaningfulsystematic changeswhen they are made consciously and ethically.
Then there is the matter of where you bank. Where you bank matters for the future of the planet.
Why Are So Many Investments Unethical?
Ethical investing is not commonly synonymous with growth and or power, and our society is built upon an ideology of growth at all costs.
Growth and money both mean power.
Yet, in order to maintain its value, our monetary system is built on scarcity, which empowers some at the expense of the majority.
Rather than investing ethically, our economy is based on ravaging theEarth’s finite resourcesand on immensesocial injustice.
In many cases, providers re-invest our funds in unethical, speculative and volatile industries, fromfossil fuelstohuman rightsabuses, to questionablelobbying practices.
Most people would never sanction their money being invested in unethical projects that fuelclimate change,destroy therainforestor fund weapons creation.
However, due to a lack of transparency, awareness and choice, as well asconsumer convenience, this is happening all the time withbanking.
Ethical Investment Platforms
There are loads of exciting ethical investment opportunities for everyone to take advantage of, particularly when combining these with the government’s new tax-free Innovative Finance ISA’s.
It is always a good idea to do as much of your own research as you can, to make sure you end up investing in causes that matter to you as well as keeping your money secure.
There are several investment platforms and apps that are leading are making are helping you to put your money where your principles are:
1. Purposeful Money
Purposeful Moneyis a great place to start.
This platform offers independent financial advice forsocially responsibleinvesting.
They make ethical advice affordable for anyone who wants to integrate values into their investment strategy and offer advice on everything from pensions to ISAs and more.
2. Abundance
Abundanceis a peer-to-peer investment platform. They democratise green infrastructure financing by raising money from ordinary people. You can invest just £5 and earn tax-free returns. In only five years Abundance has raised £66 million to fund 31 green infrastructure projects.
3. Wealthify
It’s a tempting name, who doesn’t want to be wealthified? This is a transparent investing platform with an ethical bent.
Like Abundance, Wealthify offers a range of ‘ethical plans’. You place your money in the trusted hands of experts who work with top ethical providers to make it grow for you.
Wealthify work with companies that are proponents of the PRI.
That is, ‘Principles of Responsible Investing’. It’s well worth reading up on theseprinciplesas well if you want to be an ethical investor.
4. Nutmeg
Nutmeg is another investment platform that gives you the option of creating your ownsocially responsible portfolio.
They score each portfolio based on how ethical it is in terms of environmental, social and government causes, and use their data to give you as much information about where your money is going and what it is doing as possible.
Also check out our feature onHow To Invest More Sustainably
“We need to slow our rate of consumption and production and bring our economy back in sync with our planet’s ecology”
Get Ethical With Crowdfunding
Out of everything, crowdfunding is a form of investing that demonstrates the power of decentralised networks and communities coming together to create radical change.
New platforms likeUp Effectgive everyone the opportunity to make a difference by backingsocial entrepreneursand their activities.
How Does Crowdfunding Work?
Crowdfunding is a form of ethical investment that gives you tangible returns on your investment and enables you to really see the difference you are creating.
TheUK Crowd Funding Associationdefines this type of ethical investing simply as ‘a way of raising finance by asking a large number of people each for a small amount of money’.
You invest in a crowdfunding scheme because you really care about the cause and want to see it prosper.
You might enjoy perks like the occasional free ticket to an event, or some news updates, but really the reward is just helping an ethical cause you believe in to prosper.
There are all manner of great, affordable crowdfunding ventures you could get involved in.
They range fromwater filtrationin ruralIndonesiatoSexy Socks, who give a pair of school socks to a child in need for every pair you buy.
Triodos has also just launched their ownCrowdfunding Platformgiving you the chance to invest directly inpioneering organisations,fromrenewables, to community hubs andorganic food businesses.
Why Spend Money Ethically?
Spending money is obviously not technically investing.
However, you really can keep your money green and vote with your pounds by being mindful about how you spend.
When you develop spending habits it means that, like with an investment, a significant portion of your money will get poured into a certain place over the course of your life.
Therefore, wherever your favourite, go-to fashion brand, for example, has their money invested will get empowered or disenfranchised by you.
- 6 Easy Ways to Shop More Sustainably
Ethical Electricity
For a thorough rundown of how to make sure you are buying ethical electricity, check out our feature all aboutChoosing The Right Renewable Energy Supplier.
The ones pebble prefers areEcotricity,Good Energy, andOvo.
They all provide brilliant ethical alternatives to fossil fuels and dirty energy.
Buying Local And Ethical
Using your money to buy from local suppliers as often as you can is a great way to be more ethical with your spending. To do this:
- Try to find out whether there are markets andorganic farmsin your local community
- Buy fromsmall-scale farmersand producers so you can cut out the middlemen and know where your money is going
- Avoid unethical supermarket monopolies, packaged goods and plastic
- Support local andsocial enterprises, community groups and co-ops.
Take a look atTransition Networkfor some food for thought, to learn about thecircular economy, and howwe can create changefrom the ground up.
Ultimately, however, we can’t consume our way to a better world.
So, sticking to this simple adage as much as you can is the best way to go: if you don’t need it, don’t buy it!
How To Consume More Sustainably
- Check out our 5 tips for a minimal lifeor, if that’s a little daunting, then work on becomingslower consumer
- Exchange, repurpose,borrowand lend.
- If you are going to buy something new, take a look at thesupply chainand if it doesn’t align with your values, they don’t deserve your business.
- Check out our top10 Ways To Spot An Ethical Brand
Green Money Talks
Spread the word about ethical investments! Money can be a taboo topic, but it’s important to read up on issues and chat to friends, family and people in your community about it.
Subscribe to ‘new economy’ magazines, likepebble!
Don’t compromise your values and don’t accept what you see as wrong.
For more on ethical investing and money…
- How To Invest More Sustainably
- Green Banking: How To Save Your Money To Save The Planet
- Activist Investing: How To Buy Shares In A Company To Create Change
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