Ethical finance: 10 ways to green up your money

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Money can be a force for good and play a huge role in our overall wellbeing and happiness. It lies at the foundation of our economic system and facilitates social movement, the distribution of resources and the exchange of knowledge, services and skills.

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.

Ruby Reed from Advaya Initiative shares her ethical finance tips and how you can make your money work for the planet as well as for you.

Ruby Reed 19 May 2018

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Our society is built upon an ideology of growth at all costs. Growth and money both mean power, yet in order to maintain it’s value, our monetary system is built on scarcity, which empowers some at the expense of the majority.

Ironically, there is no fixed amount of money in the economy, and it is being created from nothing all the time. 

As it stands, 95-97% of money is created by commercial banks when they issue loans in the form of bank deposits (the remaining 3% is government-owned Bank of England paper money, see Positive Money for more info).

This means that commercial interest, rather than social need, dictates the distribution and creation of money in society. (See this 2014 report by the Bank of England to see what I mean.)

Wealth distribution goes on to dictate relationships of power: those who have more money have more power, and the ones that manage the money supply have the most power of all.

Uncontrolled lending leads to uncontrolled debt and financial crises that often end in expensive government bailouts – as we have seen.

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Do you know what your money is invested in or what it's supporting?

We all know that this system isn't working

Our economy is based on ravaging the Earth's finite resources and on immense social injustice.

When we open a current account, invest in ISAs or take out a loan, pension scheme, insurance or mortgage (to name a few), our money doesn’t just sit there.

In many cases, these providers re-invest our funds in unethical, speculative and volatile industries, from fossil fuels to human rights abuses, or questionable lobbying practices. Most people would never sanction their money being invested in projects that fuel climate change, destroy the rainforest or fund weapons creation, but due to a lack of transparency, awareness and choice, as well as consumer convenience, this is happening all the time.

A successful economy needs a transparent banking system that can support a fair and sustainable economy. We need to find an economic system where ecological sustainability, social justice and financial stability go hand in hand: an economy that meets the needs of all, not just the privileged few, and allows us to thrive.

The bottom line is we need to slow our rate of consumption and production and bring our economy back in sync with our planet's ecology.

The good news is that times are changing

People everywhere are starting to realise that we have a right to demand a fair system in alignment with our personal values and ethics.

People are coming together as communities and networks and taking back control of their local economies.

Alternatives are becoming available, and the time is ripe to be part of the movement.

Read on for 10 ways to green up your money

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Have you thought about switching your bank account to one that is transparent and invests ethically?

Your bank account

Iif you want to know where your money goes, sign up for the new current account from Triodos Bank who pride themselves on their completely transparent lending practices. Take a look at Positive Money for some great information and practical solutions too.

Your savings, loans and mortgages

Many mainstream savings accounts are based around the FTSE 100, which is largely made up of oil companies, big banks and defence stocks, but there are loads of great alternatives that have been outperforming the FTSE 100 too.

Charity Bank is one example of an ethical savings and loans bank that only make loans to charities and social enterprises.

Take a look into Mutuals, local Building Societies and Cooperatives too, such as Nationwide, Coventry, Ecology Building Society and Zopa.

These campaign for better practices and are owned by their members who subscribe to a common fund. So rather than the interest you pay going towards your bank manager’s bonus, it’ll be going back to other members of the public who share your bank. Furthermore, building societies are prohibited from taking part in commodities or foreign exchange trading, and they must ensure that at least 75% of their lending goes into residential property (i.e. mortgages).

"We need to slow our rate of consumption and production and bring our economy back in sync with our planet's ecology"

Invest ethically

There are loads of exciting ethical investment opportunities around for everyone to take advantage of, particularly when combining these with the government’s new tax-free Innovative Finance ISA’s.

Purposeful Money offers independent financial advice for socially responsible investing. They are making 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.

Meanwhile, Abundance is a peer-to-peer investment platform democratizing green infrastructure financing by raising money from ordinary people. You can invest just £5 and earn tax-free returns, meaning that in just 5 years Abundance has raised £66 million to fund 31 green infrastructure projects.

Crowdfunding

Out of everything, Crowdfunding really demonstrates the power of decentralised networks and communities coming together to create radical change. New platforms like Up Effect give everyone the opportunity to make a difference by backing social entrepreneurs and their activities.

From affordable water filtration in rural Indonesia to Sexy Socks that give a pair of school socks to a child in need for every pair you buy, it is a really great way to get tangible returns on your investment and really see the difference you are creating.

Triodos has also just launched their own Crowdfunding Platform giving you the chance to invest directly in pioneering organisations, from renewables, to community hubs and organic food businesses.

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It's not hard to invest ethically or switch to green suppliers any more - typically, there's an app for that

Insurance and pension

The average pension in the UK is £50,000, and there are millions of pensioners with schemes with much of this money going to fossil fuel investments and unethical practices such as land grabbing, oil and tobacco (see this Friends of the Earth report for more info).

Pensionbee is paving a different way of doing business, and Aviva is committed to sustainable investment too. When it comes to general insurance, Naturesave covers homes, businesses and charities, and places 10% of premiums into an environmental fund.

Likewise, ETA provides travel, bicycle insurance and breakdown cover, and aims to create positive changes in Britain’s travel habits by raising awareness about the impact of excessive car use.

Electricity

Ecotricity, Good Energy, Bulb and Ovo are all providing brilliant ethical alternatives to fossil fuels and dirty energy that are no more expensive. Switching is as easy as a phone call.

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“People are coming together as communities and networks and taking back control of their local economies”

Buy local

Find out if there are markets and organic farms in your local community. Buy from small-scale farmers and producers so you can cut out the middlemen and know where your money is going. 

Avoid supermarket monopolies, packaged goods and plastic, and save money too. Take a look at the Soil association and Farmdrop for some great ideas and advice about going organic.

Get involved in your community

Support local and social enterprises, community groups and co-ops. Take a look at Transition Network for some food for thought, to learn about the circular economy, and how we can create change from the ground up.

Consume with awareness

We can’t consume our way to a better world, so if you don’t need it, don’t buy it. 

(See here for our 5 simple tips for a more minimalist life).

Exchange, repurpose, borrow and lend. If you are going to buy something new, take a look at the supply chain and if it doesn’t align with your values, they don’t deserve your business.

(Read our 10 easy ways to spot an ethical brand here).

Money talks

Spread the word. Read up on issues and talk to friends, family and people in your community. Subscribe to ‘new economy’ magazines, websites and non-profits (including pebble - you can sign up here). 

Don’t compromise your values and don’t accept what you see as wrong.

Advaya Initiative is hosting an exciting series in London exploring how we can go about Systemic Change. From Money Myths, to Local Currencies, Blockchain, Post-Growth and Happiness, the series will empower you with the tools you need to re-think our approach to the economy and understand alternatives.

31 May: Decentralisation & People Power
6 June: The Banks, The Myths & The Earth
16 June: Your Relationship with Money
20 June: Economics of Happiness: Localisation & Well-Being 

Tickets and info here.

Join the community for sustainable living, ethical fashion and eco travel


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