Sustainable investing: money that matters
The world today is more concerned with the state of environment than ever before. A recent study shows that 72% of Americans believe that not only is global warming occurring, but it's an issue that is personally important to them.
We're all making changes. We're recycling more. We're driving less. We're buying eco-friendly brands. We're even banning plastic straws. But what if we told you that your personal investments could exponentially impact your efforts to curb climate change?
Dale Wannen, 1% for the Planet business member and founder of the sustainable investment firm Sustainvest explains:
"As more and more of us find ourselves living more sustainable lives by doing things like eating organic food and driving electric cars, there is one lingering issue that in a way negates all of this: how we invest."
Financial investments and wealth management aren't often discussed on the topic of climate change. But trust us, they should be.
"Lurking in those 401k's and IRA that we put our hard-worked money into are investments that own companies like Monsanto and Exxon. Sustainable investing is important because the money that we are socking away is being invested into public companies," says Wannen. "If we continue to invest in the Vanguards and Goldman Sachs of the world, then we will just continue to dig the hole that we got ourselves into."
For fear of losing you and staying with our simplify theme, we'll leave out the financial jargon and keep it simple: where you decide to invest and how your spend your money matters.
Sure, your current investment strategy might be making returns. But, at what cost?
Luckily, we sat down with a few 1% for the Planet businesses that know a thing or two about sustainable investing. Here are just a few ways that you can ensure your investments align with your values (and a few 1% for the Planet businesses to help you along the way):
What is sustainable investing?
We're no experts, so we'll leave it to 1% for the Planet business member and venture capital firm, Renewal Funds:
"Sustainable investing, impact investing, or in our case – mission venture capital, are all a means of deploying capital for social and environmental good, along with financial return. It is the recognition that financial gain should not be the only goal when making an investment. The planet, communities, workers, and funders are all important stakeholders; sustainable investing aims to deliver a meaningful benefit for all."
In this way, sustainable investing is simply just investing with purpose. When you invest with sustainable firms and companies, you're ensuring that your money (and returns!) are supporting businesses and industries that align with your values (and save the planet!).
So, what can you do?
Educate Yourself! The best thing you can do to move toward sustainable finances is to start asking the tough questions. Where is your money being invested? What industries do your investments support? Do they align with your values?
Renewal Funds advises, "If you want to invest sustainably, first analyze where your money is currently invested and what it's doing on your behalf. Savings accounts, mutual funds, mortgages, and direct investments are all extensions of you and your values. The key first step is to shift your perspective about money from an abstract idea, to an active manifestation of your principles and intentions."
The best way to get the answers you need is to go directly to the source. Start by having an open conversation with the person or firm that controls your investments.
"If you are currently invested with your company's 401k or 403b plans, ask your HR manager if there are fund choices that utilize sustainable screening or ESG. If there are none, ask them why not. If you have an IRA with various funds and stocks, find out if you are holding any dirty fossil fuel companies within those funds," says Wannen.
Get Started! We're proud to have many business members in the financial industry within our global network that are leading the way in sustainable investing.
Once you understand where your money is being invested, you can divest from harmful industries and identify a new sustainable strategy with the experts like Sustainvest and Renewal Funds.
Pro tip: also be sure check out our member, Aspiration's innovative banking services.