4 ways to make your finances greener
Has the new most recent Intergovernmental Panel on Climate Change (IPCC) report gotten you thinking about how to fight the climate crisis? Are you stuck and don’t know where to start? You can start by changing your finances to be with institutions that are doing their part to create a more sustainable economic future. Let’s take a look at how:
1. Research you bank
The simplest way to start making your finances sustainable and greener is by changing your bank. Any bank can claim to have green products, but having those products doesn’t always make them ethically green. There are financial institutions that offer environmentally friendly products, but then invest in the coal and mining industry. In a way it defeats the purpose of going green.
It is one thing to make individual changes to promote sustainability, but if there are no systemic changes happening at the same time, typically improvements don’t happen.
Nowadays, you can change banks with a few clicks. So if you are unhappy with your bank’s ethical values, find one that aligns with your own and make the change. Transferring your money to a different bank might not seem like a massive impact to protect the environment, but you are actually helping stop investments to the fossil fuel industry. Between 2016-2020, the largest banks in the world contributed 3.8 trillion USD (about 5.2 trillion AUD) into fossil fuels, said the 2021 Banking on Climate Chaos report. If enough people begin choosing their banks ethically, there may be a chance to lower how much money goes to these climate damaging industries.
2. Consider moving your super
Every working Australian has a super, but once you get it you typically don’t ever look at it again. Why would you? A superannuation fund is essentially your retirement fund, why bother with it until you're much older?
The money that is put away each year from your salary, is then invested in different ways, based on your super provider’s investment preferences. However, some supers invest in industries that make the climate crisis worse, which obviously isn’t ideal. It is therefore important to go into your super and select your investment preferences, especially if you want your money to go into sustainable investments. There are several super funds that are green investments exclusive.
Recently the government introduced the YourSuper comparison tool that allows you to compare supers to meet your ethical needs.
3. Green loans exists
These green loans are typically exclusive to environmentally friendly products like electric cars, solar panels and energy efficient homes. They tend to have a strict set of eligibility rules, but if you are serious about changing your finances to sustainable products this is a good place to start. Typically these green loans offer discounted or lower interest rates for a period of time.
4. Invest in cars and property created for a sustainable future
If you are considering buying a home in the future and are also worried about the climate crisis, consider buying a green home. Typically a green home has a 7-star Nationwide House Energy Rating Scheme or higher. These types of houses are built in a way that doesn’t require high energy usage and have low carbon emissions.
You can also look at your car of choice: Electric vehicles (EVs) have grown in popularity in Australia. According to the Australian Bureau of Statistics (ABS), there are more than 23,000 EVs nationwide as of January 2021. These types of vehicles typically run on no petrol and don’t produce emissions. Depending on the state of territory you live in you may receive special discounts for owning an EV.
Making your money sustainable is as important as going out and planting trees. When many people show financial institutions that they want sustainable products they become more inclined to create and offer them. Making finances green is a small step together helping protect the planet.
If you want to learn more about green money saving products check out Mozo’s family finances page.