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GREEN FINANCE: harness £££ to save our world

How to green our personal finance and campaign for broader system change


<< It's great that we now have many more ways to ensure our decisions about money are helping progress towards sustainable lives and a safer future. Climate Action Newcastle supporters regularly raise queries (and solutions) in our monthly meetings and also at special events and meetings. We've drawn on all these to update our Green Finance blog, which was created by CAN supporter Francesca Maguire. She dug deep into the facts on finance and emissions – the impact’s bigger than we think!>>


“The biggest economic disruption of our modern era will be the transition from fossil fuels to renewable energy.” Mark Campanale – Carbon Tracker.


So, how do banks, insurance companies, pension schemes and other financial decisions we make have an impact on the future of our planet, climate change, and more specifically, the use of fossil fuels? And how do we try to influence the finance sector through campaigning as well as through our personal finance decisions?


“Divestment is a tactic in which an organisation, such as an institution or individual, divests itself of stocks, bonds, or investment funds that are unethical or morally ambiguous. – Green Business Bureau.


It’s quite simple really; by opting to remove your money from funds and institutions that are investing in fossil fuels and removing your financial support, you can threaten the long-term viability of fossil fuels and accelerate the transition to renewables and sustainability. As environmental activist Bill McKibben said back in 2012, when he launched his campaign Go Fossil Free: Divest from Fossil Fuels: in order to save our planet, we must “revoke the social license of the fossil fuel industry.” We must make it unacceptable to fund fossil fuels and allow our money to be used to fuel climate and environmental breakdown.


Easier said than done, right? Well, maybe not. Here are a few of the ways you can divest your money away from fossil fuels, as well as finding out how your money is currently being invested and some resources to help you decide where you’d like to reinvest it for the future of our planet. And below is info on how you can organise a meeting or presentation like this one (pictured), run by the Divest Tyne & Wear campaign at Newcastle Arts Centre.


Switching your bank account

According to Triodos, “Nearly £150 billion has been invested in fossil fuels by UK banks since the Paris climate agreement was adopted in 2016.” So, when deciding which bank to give to give your business to, there are a couple of questions you should ask:

· Is it clear how they will be investing my money?

· Are they financing climate change?

Now, you might be thinking that most people don’t have the time or the patience to research upwards of 50 banks to find the answers to those questions, but luckily for us there are tools available to help us:

· Bank.Green is a website founded by volunteers in 2020 with the mission to tackle fossil fuel extraction by forcing banking institutions to divest from environmentally-destructive projects. The website contains a resource in which you can compare banks from countries all over the world and it gives a barometer rating of how high your banks contribution to fossil fuel investment is.

· Fossil Banks is a Netherlands-based website which gives a more in-depth analysis of the investment behaviour of hundreds of banks worldwide including specific details about how much of and where your money is being invested.

· Switchit is a not-for-profit which was set up to facilitate the move from institutions which fund fossil fuels. Go to their website and it takes just 15 seconds to find out how your current bank fares under their criteria.


Investing in a green pension fund

Setting up a sustainable pension is one of the most powerful tools we have to minimise our climate footprint.” Jocelyn Timperley – BBC: How I Made My Pension Sustainable

As with your banking, there are some questions you should ask yourself about where your pension pot is being invested:

· Does your pension provider lack transparency?

· Are they investing in carbon-heavy sectors or fossil fuels?

· And in the case of private pension funds, have you sought independent advice about where to invest your money?


According to an analysis by WWF, Aviva and Make My Money Matter, moving the average UK pension to a sustainable equivalent reduces around 19 tonnes of greenhouse gas emissions per year, almost three times the average UK carbon footprint. These days, there are plenty of options out there; many big-name firms (such as AVIVA, NEST, Scottish Widows and BT) have now set net-zero targets, and there will be more to come. Here are resources for you to help you understand where your pension is currently going and where you might like to switch it:

Make My Money Matter also provides you with a template for starting a conversation with your employer or your current provider with regard to where your current pension is being invested. It is also worth asking the question as your current workplace pension fund may have an ethical option which will exclude companies that don’t meet ESG criteria.


If you are one of the just under 7 million people who rely on local government pension funds to provide them an income on retirement, you can turn to organisations like UK Divest for information regarding where your pension is being invested and advice on how you can put pressure on your local councils to divest from fossil fuels, for example, signing petitions such as this one or making your voice heard during local elections (usually held in May). You can obtain the election dates on local council websites and quiz your local candidates about their policies and action plan regarding climate change and whether their own local council pension fund invests in fossil fuels. For more advice on how to approach this , check out the Divest Tyne & Wear webpage (and here's our blog Use Your Vote to Help Save the Planet).


ETHICAL INVESTMENT FUNDS

You may have previously heard the term ‘socially responsible investment’, which refers to “a strategy that considers not only the financial returns from an investment but also its impact on environmental, ethical or social change” – Corporate Finance Institute. Where once it was enough to just consider factors such as risk, ROI or inflation when choosing funds, investors must now go one step further and assess the impact of their investment on the climate crisis and select companies that align with their own values and carry out practices that enforce them.


If investment portfolios are your thing and you’d like to make more conscious choices with regards to your carbon footprint, here are some resources that can help you make an informed decision:

· Good With Money is a website which contains guides to all different ways of investing your money ethically including The Good Investment Review and the Good Guide to First Time Investing.

· This blog post gives a comprehensive breakdown of what green investing is, how it works and some of the different platforms you can use here in the UK to access climate-friendly funds.

· This study from EDHEC discusses the greenwashing of supposedly climate-friendly funds and shows you what to look out for when making investments.

· Ethical Consumer provides an introduction to green investing here and you can find comprehensive lists of companies which provide ethical investment funds as well as banking institution and pension providers, though for the most up-to-date versions a subscription is required.


BACKGROUND

It’s no secret that in recent years the move from fossil fuels to renewable energy and sustainable lifestyles has been at the forefront of almost every debate regarding climate change and the future of our planet. According to the Energy and Climate Intelligence Unit, around 80% of the energy consumed in the UK is provided by oil and gas and, despite a steady decline of greenhouse emissions from the UK since 1990, by 2019 the energy sector remained one of the top four contributors to the nation’s carbon footprint.


That same year saw the UK Government commit to the decarbonisation

of all sectors and net-zero by 2050, However following the latest and most damning IPCC report and announcement from Boris Johnson and the Conservatives weakening the Energy Strategy with a notable lack of onshore wind farms and atomic power at its core (pardon the pun), we seem to be once again falling short of what are now critical targets if we are to prevent an overall rise in temperature of more than 2 degrees.


***GREEN FINANCE INFO SHEET: links here to advice and campaigns, produced by Divest Tyne & Wear campaign for its Green Finance event.


***MORE WAYS YOU CAN MAKE A DIFFERENCE

These are just some of the ways you can use your money to make progress and achieve change.

  • REQUEST A CLIMATE ACTION NEWCASTLE GREEN FINANCE EVENT: email contact@climateactionnewcastle.com. CAN supporter John Adams offers presentations and Q&As, a financial expert with more than a decade in the City finance sector and qualifications in green and sustainable finance .

  • SUPPORT DIVEST TYNE & WEAR CAMPAIGN TO END £230m FOSSIL FUEL INVESTMENT BY A HUGE LOCAL PENSION SCHEME: link here to a treasure trove of local information and ways to be involved. The website includes campaign videos, links to its petition and how to check if you know people in the 300+ local companies who are members of the fund and probably don't know how entangled it is in fracking, tar sands and companies expanded fossil fuel extraction! By pulling together, we can remove millions of pounds of investment in fossil fuels by Tyne & Wear Pension Fund.

  • SUPPORT TYNE & WEAR PENSION FUND MEMBERS “OFFSETTING” FOSSIL FUEL INVESTMENT WITH GREEN DONATIONS: spread the word about the “Reinvent our 3%” scheme to anyone you know who has a local authority pension and encourage them to write to Tyne & Wear Pension Fund about divestment. Facebook page, JustGiving page, or get in touch via reinventour3percent@gmail.com

  • SHARE YOUR TIPS AND EXPERIENCES: share the ways you've changed towards sustainable finance, or email us: contact@climateactionnewcastle.com.






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