How can my New Year’s Resolutions help to save the planet?
As we get stuck into 2021, and leave the madness that was 2020 behind, many will have thought about their New Year’s Resolutions. We imagine that the old classics of ‘lose that bit of weight’ and ‘eat less junk food’ might have already fallen by the wayside. We don’t blame you!
But, what about the New Year’s Resolutions that – instead of just bettering you – better the planet and its future? The most powerful lifestyle change you can make to do this is going green with your pensions and investments.
Feel like a monumental task? Don’t worry, we’ll walk you through:
Moving your pension
There is an estimated £3tn invested in UK pensions. This staggering figure could make a real difference if used in the right way. Unfortunately, it isn’t, and many pension providers are still involved in exploitative and extractive industries.
But things are changing. Other providers, like Path Financial, not only actively avoid companies that prop up harmful fossil fuel developments, deforestation and animal testing, but purposefully invest in ones that only have a positive impact – like reforestation, healthcare and education.
And it’s much easier than you might think to make the switch. Our clients, grandparents Roy and Becky Francomb from Seaford, did so just eight months ago. Both have now taken early retirement and agree that it is one of the best decisions they have ever made.
Passionate about leaving the world in a better way than when they came into it, we helped Becky and Roy to understand their pension options and take control of their money – ensuring it is acting in-line with their strong ethical values.
Eight months on, and their new pension portfolio (as of December 2020) has saved 68 tonnes of carbon dioxide from being realised into the atmosphere (the equivalent of 15 cars), recycled 5.3 tonnes of material (the equivalent of 5 households’ annual waste) and generated 39.6MWh of renewable energy (enough to power 12 households).
Not only this, but Becky and Roy’s pension portfolio has seen a 7.4% growth (as of December 2020) since being set up. Thoughtful individuals are no longer needing to choose between planet and performance, this trade-off has become a thing of the past.
Roy, who officially retired from his job as a community family worker just last week, said: “A lot of people are in denial about the situation we’re in but, in doing something like this, you are using the power of being a consumer in the best way possible. It feels very empowering.”
Investing in businesses with strong ESG commitments makes sense. These are the ones who are innovating, driving change and who will – ultimately – thrive in the future.
This could involve transferring your ISA to move from polluting the world to protecting it, investing in a new fund that reflects your values, or transferring your existing funds to an impact investment model.
In any of the above situations, companies and funds need to be monitored on their ESG credentials. Their social and environmental impact is, unfortunately, not a constant – it fluctuates. So extensive due diligence, numerous selection exercises and a thorough screening model is needed to sort the green from the ‘greenwash’.
This isn’t helped by how there is no set industry standard as of yet. So, what is a complete no-no to one fund manager, may be just about acceptable to the next. The language is also ill-defined and flexible. Terms like ‘ethical’, ‘SRI’, ‘ESG’, ‘sustainable’ and ‘impact’ are used almost interchangeably, yet each have different implications.
The result is many different shades of green, which often leaves the consumer feeling confused and overwhelmed. But the right financial adviser can help.
For example, we recently worked with Diane McCrea MBE who has sat as Chair for a number of Welsh environmental organisations including Natural Resources Wales. After we transferred her investments across to sustainable alternatives, she said: “It makes me feel so much better about what my money is achieving for me and the future of our planet. Why didn’t I do this before?”
Ultimately, there is no Plan B any more than there is a Planet B. Making your finances green is not only the best option, it’s the only one impactful enough to prevent us from destroying the planet that we rely on. So why not reap the rewards of being an early adopter?
To find out more about the work we do as well as Roy and Becky’s experience, check out this article in The Guardian.