If you want to make sure you’re investing wisely and ethically, you’re not alone!
Here at SmartPurse, we’ve been thinking about the same thing. And according to Nest, the workplace pension scheme set up by the UK government, the majority of us want our money to go into sustainable investments that consider people and the planet.
This is a rapidly growing part of the overall investing world (the amount being invested sustainably more than doubled in 2021, according to sustanabilitymag), and with the climate crisis at our door, it's set to become larger and much more significant.
What is sustainable investing?
Sustainable investing means your money is invested in companies that are actively doing social or environmental good to bring about social change. It includes anything from your local bakery ethically sourcing all their ingredients, to a large corporation that builds and supplies wind turbines.
When you're thinking of sustainable investing, it's crucial to avoid businesses seen as having negative social impacts that can harm the planet and its inhabitants. These can include tobacco, gambling, weapons, and fossil fuel companies.
You must do your own research and ask your financial advisor or pension provider how your money is invested. You can stipulate how you invest – there may be companies you want to avoid for your own personal reasons. This way, you can ensure you align your investments with your personal values.
It may seem a long way off to some, but blink and retirement will be just around the corner. So, if you’re thinking of sustainable investment, don’t forget to look at your pension too. Is the money you put into your pot invested sustainably? Many people inadvertently invest in businesses that contribute to the increasing amount of CO2 emissions every year.
All is not lost though. Your pension can make a difference. According to Make My Money Matter getting a green pension is 21 times better at cutting your carbon emissions than not flying, eating less meat, and switching to a green energy supplier combined! To find out about your pension’s credentials, ask your financial advisor or your finance department at work about how your money is used.
You can also find out for yourself by using an online rating app like isitgreen.
Many pension fund companies say they want similar things and will state this in their investment criteria. But don’t forget to do your own research – do they invest in businesses and projects that harm the planet? If so, you can request that they make more ethical investments and move to net zero. Make your money count!