Written by Jo Hand 

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

At COP27 it is essential that global leaders make significant progress on the crucial issue of climate finance. The importance of climate finance is key to achieving the goals of the Paris Agreement, and existing commitments and pledges, announced from Copenhagen and Cancun, through Paris and all the way to Glasgow, require follow up to provide clarity as to where we are and what more needs to be done.

In other words, showing that progress on delivery of the annual US $100 billion climate budget will build more trust between developed and developing countries, and show that actual commitments are being fulfilled with total transparency.

As country leaders gather to talk about the climate, it’s easy to feel that the solution is “for them to sort out”, but what we do as individuals matters. If you’re wondering what impact you can make as a citizen on a global crisis, then we’ve put together the ultimate guide on how everyday choices made by ordinary people hold the key to our efforts to reduce emissions and find more sustainable solutions.

In this article, we are focusing on greening your money. It is one of the toughest steps, it takes time, but the impacts can be significant.

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 includes shareholdings in fossil fuel companies.

One hundred 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. 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.

Greening your money
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.

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.

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 in 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 or switching to a lower fossil fuel option.
  2. Many countries have divestment campaigns that you can join.
  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.

If you’re looking for more ways to get involved in the themes of COP27 and #ThinkCarbon, then download our free guide on COP27, the Climate, and Me. As the Egyptian Minster for the Environment has put it, “COP27 is the COP for action”.

Let’s do this!