How to make your money greener, from carbon negative phone networks to eco-friendly mortgages & More Live News

The connection between the spending and saving we do every day and the state of the planet may not be obvious at first.

But as more companies promise to reduce their impact on the climate, it is becoming clear that consumers can incentivise this progress by pulling their money away from those firms that are not keeping up.

From making better choices at the supermarket to investing in solutions for the future, there are lots of ways to make your money greener.

Pensions

There are so many ways to gear the money you have invested in the market to greater effect for the planet.

The first question is: where is my pension going? Looking at how your retirement savings are being used can be hugely impactful.

Izzy Howden, a campaigns and policy adviser at Make My Money Matter, says: “Our money is the one of the most powerful tools at our disposal in tackling the climate crisis.

“Yet it is far too often overlooked. Without realising, the efforts of people trying to live more sustainably are often being undermined by the environmental impacts of how their pension money is invested.

“But we can stop this. In fact, greening your pension cuts your carbon footprint 21 times more than stopping flying, going veggie and switching to a renewable energy provider combined.”

If you find that your pension is currently in a general fund, which includes companies you don’t want to fund, such as fossil fuels producers or airlines, you have a few options.

First, you can ask your employer whether there are different options to the default pension you will likely have been enrolled on when you joined. Some workplace schemes will offer you a choice between different funds.

If they don’t, you could consider launching a request, alongside your colleagues, to add a greener option for your pension. The organisation Share Action has template emails on its website for employees who want to ask their bosses to make a change.

But if this is not possible, or you are self-employed, you could always set up your own separate Self-Invested Personal Pension (SIPP). This is a pension wrapper which gives you more flexibility in terms of where you put your money, and could be the right option if you want a more DIY approach.

However, it will always be worth maximising the pension contributions in your workplace scheme up to the point where your employer matches them, before paying into a different fund.

Once you’ve decided on the best place for your pension, you can also consider consolidating your savings in the same place by moving pensions from previous jobs to other funds.

More from Ethical Money

Investments

What factors should you actually be thinking about when looking to make greener investments? Whether it’s your pension or a separate savings pot that you want to invest, the right answer will vary depending on your circumstances.

“When it comes to investing ethically, there are additional things you’ll want to think about, such as how strict you want to be, if you want to avoid certain industries or business practices, or if you want to make a contribution as a shareholder to improving business standards,” says Rob Morgan, investment analyst at wealth management firm Charles Stanley.

Investing in line with your values has become far easier as more platforms offer ways to customise where your money is going. You can pick more general funds that leave out fossil fuels producers, or specialise with funds that look to finance particular initiatives, such as water management. You could even, if you want, hand-pick each company you want to invest in.

“Selecting individual shares is an option via an investment platform, though this does take more commitment in terms of research and means it’s harder to get diversification, especially when investing small amounts,” says Mr Morgan.

“For most people, getting instant diversification through a collective ‘fund’ can offer a convenient solution as they spread your money and risk across a number of different companies and are managed by a professional fund manager.”

An alternative to a managed fund is a passive tracker fund. These tend to be very broad, tracking the performance of a large selection of the world’s biggest companies, which means most standard ones are going to include large oil and gas firms. But funds focused on ESG (environment, social and governance) goals also exist, with many of the major providers including Legal & General, UBS and Vanguard all offering ESG funds.

Stuart Belcher, founder of financial adviser Resolve Financial Solutions, advises caution when it comes to these labels, however.

“With the growth in green investments clients need to be very wary of the title funds are given,” he says. “‘Greenwashing’ is regularly used and for the right reason. Clients should look at the individual holdings of funds and question advisers and fund managers why certain holdings are included.”

For example, major corporations like Amazon or Apple may be considered green by some for their investments in various climate-friendly initiatives, but not by others due to the scale of their production and transport.

You should also be aware that in downtimes such as the current market lull, environmentally-conscious funds might underperform others, since the rising price of fuel has bolstered those funds that do include traditional oil and gas companies. Green investing is therefore very much a long-term bet.

Scam Alert

  • Some scammers will impersonate legitimate investment providers in an attempt to get you to transfer your savings or pension to them.
  • If someone sends you a website link claiming to be an investment company, search separately online for the firm’s website and compare the URLs. Fraudsters sometimes create “spoof” websites made to look like the real deal.
  • If a company you have never dealt with before calls you out of the blue with an investment opportunity – especially one that sounds too good to be true – then treat it as a scam until you have evidence otherwise.

Bills

Household bills are an unavoidable part of life, so why not see which of them you can make a bit more planet-friendly?

The key is to look into company practices and take your business to the ones that are doing the most to lessen their impact, perhaps with electric vehicle fleets, renewably-powered offices, or using sustainable materials.

For broadband, independent companies GreenNet, Green ISP, and Zen are rated highest by ethicalconsumer.org.

And for your mobile phone, Honest Mobile advertises itself as the UK’s only carbon negative mobile network. There’s also Ecotalk, which uses its income to buy land and “give it back to nature”, creating natural habitats for wildlife.

When it comes to energy, in the current market, cost-effective options are unfortunately very limited. Traditional wisdom suggests that switching supplier is the best way to save money, but that has been turned on its head by recent events.

There are some top-rated renewable energy deals on the market, which are not always the cheapest, so you will have to seriously consider what you can afford.

But if you want to look into making a greener choice to power your home, Uswitch recently named the top deals on the market for sourcing renewable energy.

Good Energy, GEUK and British Gas all had top-rated tariffs, while four tariffs from Scottish Power, three from Octopus Energy and two from EDF Energy got silver ratings.

Otherwise, the only real way for consumers to save money is to save power. This is a tall order, but one that is worth investigating. A recent survey conducted by environmental consultants SaveMoneyCutCarbon found that 40 per cent of Britons are concerned about rising energy bills, but haven’t changed their behaviour because they don’t know how.

“As a nation, we are not too well informed on how we can go about cutting costs,” says Mark Sait, chief executive and founder of SaveMoneyCutCarbon.

“What we have done, however, is find ways to cut corners and swap energy suppliers which may have worked traditionally, but from what we know now – this is no longer the case.”

He recommends investing in additions to the home such as a smart thermostat, LED lighting, and even little gadgets for housework such as “dryer eggs” which reduce tumble-drying time.

The only real way for consumers to save money is to save power (Phot:o Peter Dazeley/Getty Images)

After-life planning

Concern for the climate inherently involves thinking about the world beyond our own lifetimes, yet people often forget to think about how their money will be used once they die when looking to green their finances.

The choice is very personal, but you could think about which wildlife organisations, climate campaigners or researchers do work you want to continue to support, and leave them a gift in your will.

You could also specify what kind of funeral you want, and even set aside the funds for an eco-friendly burial. Sometimes known as natural burials or woodland burials, these are greener alternatives to traditional burials. Prices can vary from a few hundred pounds to a few thousand pounds depending on the site, so it’s worth doing some research into local options and speaking to a funeral adviser if you need help.

Mortgages

It might not occur to you how your mortgage can have an impact on the planet, but there are several things to consider.

First of all, some banks now offer “green” mortgages, which offer lower interest rates or cashback for properties which have better energy efficiency ratings.

However, this might not always be the best financial option. Jon Denning, the founder of Green Planet Finance, advises his clients to look beyond “green” labels on mortgage products, taking into account the rates and also what the lender’s own eco efforts look like.

“Question the mortgage broker on the green side of things,” he suggests. “What are the bank’s credentials? For example, Barclays still invest heavily in oil, whereas Nationwide are trying to be carbon neutral.”

Most information on what banks and building societies are doing to improve their environmental impact is publicly available, so you can do your own research as well as asking professionals.

Another option is to look at what you can do to offset your carbon footprint. In his own work, Mr Denning focuses on the impacts that all parts of the mortgage process might have – right from the electricity you use to browse Zoopla to driving to visit properties and the posting of official documents. He calculates roughly how much non-renewable energy has been used in the process, then pays the organisation Carbon Neutral Britain to plant trees to offset it.

“An unspoken truth behind the excitement of every property purchase, re-mortgage or financial transaction is that each party produces CO2 emissions which have a negative effect on our planet,” says Mr Denning.

‘I sell eco-friendly products’

Charlie Gill, 30, started her own business selling eco-friendly products that provide an alternative to single-use plastics after a trip to Nepal.

She said: “Witnessing the plastic pollution first hand in Nepal really opened my eyes to the problem, particularly by seeing little plastic shampoo sachets ending up in the local river without any waste management systems to deal with the problem.

“This experience made me question my own shopping habits and what was happening to the plastic I was using and discarding. I started researching how I could cut out plastic and how to help others do the same.

Charlie Gill, 30, started her own business selling eco-friendly products (Charlie Gill)

“Finding swaps in one place was near impossible and I knew that others wouldn’t have to time to research a brand to find out how sustainable they were, so I set up Life Before Plastic to do that for them and make it easy to shop plastic free.

“My top tips are to start small, look around your house and make switches as things run out, for example when your body wash bottle runs out, go for a natural soap bar instead. Switch to a reusable razor, it might be more expensive initially but will save you hundreds as it lasts a lifetime.

“Use dissolvable cleaning sachets that you can pop into the bottle you already have before filling with water. These reduce plastic waste and, as they’re much lighter, use less carbon in transporting them. Finally, reward yourself as you go, every piece of plastic saved is an achievement, and remember it’s about progress not perfection.”

Shopping

We all know the basics by now of shopping with the environment in mind. Buying second hand, avoiding single-use plastics, and keeping an eye on food miles are all ways of greening your basket. But with the pressure from cost-of-living increases growing, what else can we do to keep costs down, at the same time as minimising our impact on the earth?

Daniel Hemsley is the co-founder of Beagle Button, a browser extension that automatically finds sustainable alternative products while users are shopping online. He puts the emphasis on investing in reusable products to save money down the line.

“Whilst some eco purchases are more of an investment, they can save you money in the long run as you won’t need to replace cheaper items that are destined for landfill,” he says. “There’s a greater cost to consider with these items too, whether it’s modern slavery, toxic chemicals used to produce or the air miles to ship items over.”

Reusable coffee cups and water bottles are the obvious ones for when you are out and about. In the home, swapping cling film for beeswax wraps and getting refills of washing-up liquid from a zero-waste store can make a difference too. “Have the attitude of buying it once, and you’re set for years instead of those tell-tale items always appearing on the shopping list again,” says Mr Hemsley.

He also suggests looking beyond daily purchases to those more occasional, higher-spend items such as new devices.

“Manufacturing tech like mobile phones or laptops produces large quantities of greenhouse gases and uses valuable natural materials like lead, mercury and cadmium,” he says. Instead, opt for the cheaper alternative of a refurbished device, which can sometimes be almost new.

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