How would you rate your own personal finances for goodness, on a scale of 1 to 10? Why?
I am one of those reckless millennials who is living on the edge with high debts and no savings, the kind that you hear baby-boomers endlessly complaining about, always spending all my money on avocados and hipster stuff instead of saving. However, I like to think I am still making some good money choices along the way, including doing all my banking with a building society and having my pension in sustainable funds so I think a rating of about 7 is accurate.
In terms of outgoings, our utilities come from the wonderful and 100% renewable Good Energy. I was also involved in a fundraising project kept annoying the PTA and Governors until they agreed to install solar panels on the roof of the local primary school which is hopefully teaching kids about clean energy and inspiring some into STEM industries to change the world for the better.
What bit of your finances would you most like to change for the better?
I’m really excited by developments in fintech and I think within a few years we’ll hopefully see widespread uptake of apps which give you real-time updates from providers and better visibility of where your money is and tools to manage it. A general improvement in transparency across the industry is needed, especially for digital natives who expect it.
As to my current holdings, I think it might be like doctors and nurses being the worst patients, I know too much! I’m really happy with my Aviva pension pot which is invested across Alliance Trust’s Sustainable Futures and UK Ethical funds. I may be biased because Ethical Screening provides them with research but they really do have a robust and comprehensive view of sustainability, looking at the companies who will be the game-changers in the future.
Which provider are you most impressed by? Why?
I have always been impressed with Nationwide and the fantastic level of customer service. When we were in the middle of renovating our ramshackle house, I would regularly go in to sort something out and the lovely staff would be beyond helpful. I also love the Flex current account, which I can manage online so it’s totally paperless, plus you get contactless cards and all the membership benefits of the building society. They reward loyalty too unlike most big banks. And you can watch ‘It’s a Wonderful Life’ at Christmas knowing you’re supporting the continued progression of the mutual movement and feel all warm and glowy (that might be the sherry).
Which provider would you like to see hoisted by their own petard? Why?
Other than the ‘big banks’ with all their associated baggage, it really irks when providers make claims that don’t add up. We unfortunately come across providers who see responsible investment as a kind-of greenwashing opportunity. They will have investment policies on issues such as deforestation, fossil fuels or human rights or even label funds as ‘ethical’ but then when you look at the holdings you see that this evidently hasn’t made any impact on what the manager has bought.
There’s also the current debate around ESG ratings and research and how useful or comparable these are. With some ratings systems companies like British American Tobacco rate very well, whereas Tesla for example might not score as well. It’s not really relevant how good BAT’s environmental policies are when their products kill people.
Do you think you have lost out financially by making sustainable choices?
Not at all, if anything I have overwhelmingly benefitted from sustainable choices and expect to continue to do so. I am very lucky to work in this exciting and future-facing industry and one of the many benefits of working for an ethical company is that they set me up with a pension way before the Government told them to.
What personal finance headline would you most like to read in the next year, and why?
ALL INVESTMENT NOW SUSTAINABLE INVESTMENT
Ok so maybe that’s a bit far-fetched, but I remember the first time I heard Fiona Reynolds of the UN PRI say that all investment should be sustainable and responsible and it felt like a eureka moment for me. If you’re a shareholder in a company and that company can’t tell you where its raw material supply chains end, or what impact a 2-degree temperature rise or climate regulations will have on their business model, or what the executive pay-ratio or gender gap is, then that is fundamentally not a well-run company and that will end up having an impact on the bottom line eventually. It’s simple fiduciary duty. There’s far too much focus on past-performance and short-termism, which is fine if you want to recreate the past and then cut and run. But I think most people see that for the future we need to be thinking much more about the long-term social and environmental impacts of business.
In the meantime, I would love to see people engage more with where their money is going, and to realise that if, for example, you choose Fairtrade when shopping, you could be having a huge additional positive impact by backing those companies who pay suppliers fairly with your pension pot too. Don’t just ‘auto’ enrol, ask questions, talk to HR or your provider.