Guide to COP27 Goal 3:
Make finance flows a reality

Contents

Section 1 – What does this mean?

Section 2 – What this means for you

Section 3 – How does it work?

Section 4 – Greening your money

Section 5 – Greening your pension

Section 2 – What this means for you

Many people overlook the impact that our money has on the climate.

Our personal bank accounts and investments are all part of the financial system. As a result, the money we save or invest may be invested in fossil fuel companies, and our pension funds may also be invested in the stock market, which often include shareholdings in fossil fuel companies. We can decide how our money is used, and whether it funds old power, such as oil and gas companies, or is invested in new low-carbon technologies.

Several banks are making Net Zero commitments for 2050, but this is too far away. Look for organisations trying to cut emissions from financing by 50% by 2030, in line with the Paris agreement and the same targets individuals are trying to achieve.

Section 3 – How does it work?

1. Deposit money at the bank.
2. Banks lend to companies. Some banks lend to fossil fuel companies.
3. Fossil fuels companies use this money to explore for oil and gas, dig it out and sell it.

The same goes for investments in the stock market, so every £ or $ you save may create more fossil fuels.

Fossil Fuel Facts

• 100 fossil fuel companies account for over half of global emissions since the Industrial Revolution. The harder it is for fossil fuel companies to find finance, the less exploration and exploitation they can do.
• Shell, one of the largest oil companies, has total emissions of over 1.5 Gigatonnes of carbon dioxide every year. That’s 1,500,000,000 tonnes!
• The Bank of England found that you can divest from fossil fuels without hurting your investment performance.

Section 4 – Greening your money

To help make your money greener, here are a few questions you can ask to help you find out more about your bank.

1. Are your financed emissions aligned with the Paris Agreement?
2. Are you planning to cut financed emissions by 50% by 2030, if so, are you on track?
3. Do you lend to coal companies, companies that explore the Arctic, or companies without a Net Zero target?

You can also look beyond the banks to institutions like Credit Unions in the USA, Building Societies in the UK, and other similar organisations, usually owned by their members. These lend to people, not companies. As a result, they can be a good fossil fuel free option.

Whatever you choose, try to avoid banks that lend to companies that mine coal, burn coal for electricity, or drill in the Arctic.

Section 5 – Greening your pension

Pensions, especially for people who have been working for a long time can have a significant carbon footprint. If you’re working hard to reduce your own carbon emissions, it can be counterproductive to support companies increasing them.

1. Ask your pension provider how much you’ve invested in oil, gas, and coal (sometimes referred to as the Energy sector) and what options they have for switching to a lower fossil fuel option.
2. Many countries have divestment campaigns that you can join. Check out gofossilfree.org to find a campaign near you.
3. If you’ve got a company pension, talk to your Human Resources department about your options. The more people who discuss this issue with HR, the more incentive for your HR team to provide sustainable options.
4. You can go further by divesting from petrochemical companies, airline firms, or utility companies that don’t use renewables.

You can also switch to more sustainable investing by looking for ESG funds. They might still have some fossil fuel companies in them, but it should be much less.

Greening your money is one of the toughest steps, it takes time, but the impacts can be significant.

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