The way you manage your money can have a huge impact on the environment.
Financial institutions are extremely powerful in deciding where to invest their funds, which companies they’ll lend to and who they’ll insure. By understanding where your money’s going – and teaching your kids to do the same – you can make a long-term difference and help build a sustainable, ethical world.
What you can do now
1. See how your financial institution stacks up
Traditionally, the four major Australian banks have a disappointing track record in divesting their funds away from fossil fuels and carbon-intensive sectors. According to Market Forces, financial institutions with no record of lending to fossil fuel organisations include:
- Bank Australia
- Beyond Bank
- Credit Union Australia
- Defence Bank
- Gateway Credit Union
- ME Bank.
Head to Market Forces to see how your financial institution compares and consider making the switch.
2. Lead by example
Teaching our kids to save money is an important life skill. If you’re opening a savings account for your child, take a look at the financial institution’s social and environmental credentials and share these with your child. By building their awareness of the impacts their money can have, you’re putting them in good stead to make better choices in the future.
3. Switch your super
Moving your investments and super money into sustainable funds that meet environmental, social and governance (ESG) criteria can be a simple way to help tackle climate change.
It’s also important to do your research and understand how funds make their investment decisions, as screening criteria can vary considerably. For example, funds marketed as ‘ethical’ could include fossil fuel investments and industrial carbon emitters depending on their screening criteria. Several Australian super providers like Australian Ethical Super and Future Super are taking the extra step and committing to fossil fuel-free options, with funds that actively invest in renewable energy projects as well as socially and environmentally responsible companies.
4. Choose an ethical insurer
With the power to decide which projects and companies to insure – as well as where to invest your policy premiums – insurance companies can have a big impact on the sustainability of our planet.
According to Market Forces, Australia’s three major insurers (IAG, Suncorp and QBE) continue to support the fossil fuel industry in some way. If you’re looking to make the change to an ethical, environmental insurer, keep in mind that many insurers are owned by one of these three major insurers – so check out their credentials carefully.