The climate crisis presents an ever-urgent threat to the health of our planet, and we can all take meaningful action to help avoid its worst effects.
By taking our money OUT of current account, savings, cash ISAs and investment funds that are still funding fossil fuels – the biggest driver of climate change – we can collectively make a big impact. This kind of action also sends a strong message to financial providers that it’s not ok to focus solely on profit at the expense of the planet and society.
Here’s our guide to getting your money away from fossil fuels, and towards providers that are helping to build a more sustainable future.
Consider your current account
The bad news is that most high street banks and big-name providers are involved in financing fossil fuels – see our top 5 least ethical banks (Barclays, HSBC, Santander, NatWest and Lloyds).
The good news is that it’s never been easier to ditch them for good and switch to more planet-friendly alternatives.
For the gold standard in sustainable banking, you could opt for Triodos Bank. A Good With Money ‘Good Egg’ firm, it will ONLY lend your money to companies and organisations that are making a tangible positive impact.
Building societies such as Nationwide and Cumberland are owned by their customers and will not invest in destructive industries. We also like The Co-operative and digital bank Starling.
Top 6 fossil fuel-free current accounts
Switch your savings and cash ISAs
Good Egg firm Triodos Bank actively invests in low-carbon initiatives. It also publicly discloses the companies and organisations it invests in, which sets a great standard in an industry that is resistant to transparency and accountability. Triodos also offers financial services to a range of positive impact projects such as organic food and farming businesses, renewable energy enterprises, recycling companies and nature conservation projects.
Charity Bank uses its savers’ money to lend to social enterprises (including renewable energy projects) and charities and like Triodos, it publicly discloses its investments. It carries out a social impact assessment for each loan.
Ecology Building Society, another Good Egg firm, focuses its lending on projects that offer the greatest gains in terms of carbon reductions and environmental impact. Its ethical lending policy prioritises sustainable housing practices, sustainable lifestyles, sustainable economic activity, and other ecologically positive projects and ventures.
Move your investments
There are an increasing number of investment funds that are committed to not investing in fossil fuels, and that proactively invest in more sustainable industries (called impact investing). Impact investing means putting your money into funds, projects or companies that aim to have positive social and environmental outcomes while at the same time providing a fair return on your investment. The aim is to create value for you as an investor as wells the wider world.
Good options are the Triodos Pioneer Impact Fund, FP WHEB Sustainability Fund, Castlefield Sustainable European Fund, EdenTree Responsible & Sustainable Global Equity Fund, Impax Environmental Markets Plc and the Artemis Positive Future Fund.
You can invest in these through platforms such as The Big Exchange (which only offers positive impact investments), Hargreaves Lansdown, Interactive Investor and AJ Bell.
If you’re keen to invest directly in innovative positive impact companies (only as part of a diversified portfolio – these are higher risk investments), you could check out Ethex and Energise Africa.
If you have a reasonable sum of money to invest, it might be worth asking an ethical financial adviser to help.
Get a purposeful pension
Greening your pension is possibly the most powerful action you can take to divest from fossil fuels.
You can build your own pension portfolio using any number and combination of sustainable funds, trusts and shares through a SIPP (self-invested personal pension) – see the latest Good Investment Review for more – or through a normal private pension.
Good Egg company PensionBee offers a Climate Plan that not only excludes fossil fuels but also proactively invests in companies helping to create a low carbon future. For the self-employed, we like NEST ethical pension fund.
