Today is ‘Finance Day’ at COP26. The leaders gathered in Glasgow will focus on the role the financial system can play in tackling the climate crisis.
But you don’t have to wait for them if you want your money to make a difference right away. From switching your bank to taking control of your retirement, there are several steps you can take today to reduce your financial carbon footprint.
Here we round up 10 ways to make your money greener.
1. Invest in a green savings bond
NS & I’s new Green Savings Bonds, introduced by the government last month, allow you to invest in green projects and earn a return of 0.65% VRE over three years.
It takes £ 100 to open an account and you can save up to £ 100,000 with pockets of cash left over.
What you will actually fund, the government says is a mix of six different types of green projects, including preventing pollution, improving energy efficiency, and switching to renewable energy.
Without further details, it is difficult for us to compare Green Savings Bonds with other established green financial products, but the government has announced that it will release more information in the future.
2. Try another green savings account
Is NS&I not selling the green option? That’s fine! You can get a savings account at a bank or building society without harming the planet – as long as you study a little environmental policy.
Which? Members have told us they have a hard time looking up a bank’s green credentials, so we checked them out for us by the experts at Ethical Consumer.
The sustainable bank Triodos topped the table, closely followed by the Ecological Building Society and the Nationwide Building Society.
3. Switch to a greener bank
You don’t have to stop with a savings account. Your checking account may be funding climate change without your knowledge. While your money sits in it, banks invest it in all sorts of things, including – in some cases – the fossil fuel industry.
Moving away from banks in doing this could both reduce your carbon footprint and put pressure on the industry to change. And the best part is, it’s easy. Banks that participate in the current account switching service allow you to switch accounts in just seven working days.
4. Decarbonise your pension
People forget that their retirement savings are an investment – probably the largest that most of us will ever make. But what are they invested in?
As with checking accounts, there may well be some less ethical projects in your retirement portfolio without you even knowing about it. The entire company pension scheme – in which you and your employer contribute to a company pension – is rather opaque. It’s easy to let it build in the background. But you don’t have to.
There are now more than 200 pension funds labeled ethical or sustainable, each spreading investor money across hundreds or thousands of companies. An ethical fund will have guidelines that determine what kind of assets it doesn’t buy (like coal), buys (like solar panels) and, in some cases, how much it invests in specific sectors.
If you want to change yours, speak to your employer. Maybe you can switch it to a more ethical plan. Or if you have a retirement provision (Sipp) that you have created yourself, you can better take it into your own hands.
5. Get a green mortgage
Whether you’re buying your first home or rescheduling your debt, it is worth researching whether you can save money by making your home greener.
The increasingly popular “green mortgages” can offer you a cheaper interest rate or, in some cases, cashback if you are buying an energy efficient home or upgrading your current property in an environmentally friendly way.
7. Which ones to buy? Eco buys
We’ve been reviewing products here at Which? And this year we were proud to present our What? Eco Buy label awarded to products that meet our sustainability criteria.
So far we have given selected dishwashers, refrigerators, kettles and of course washing machines the Eco Buy status. So next time you’re in the market, you will know where to look.
8. Switch to a Which? Eco provider
You thought we’d stop at Eco Buys? We recently got our first What? Eco providers: Energy companies with the most sustainable practices.
Three companies made the cut: Good Energy, GEUK and Ecotricity. Switching to either of these options will make your monthly bills greener.
Read more about how we choose our eco providers here: Which ones? reveals new energy eco providers.
9. Get a free heat pump (if it’s right for your home)
You can get a government grant of up to £ 5,000 to replace your gas boiler with a low carbon heat pump. Sounds great, doesn’t it? Well, it’s not that simple.
First of all, we would say that heat pumps do not work well in all homes. You will need outdoor space to install the pump and indoor space for a water tank. And you will get the best results if your home is already energy efficient, which many UK homes are not.
Then there is the question of whether your boiler needs to be replaced. It can be pretty efficient already. In that case, when it stops working for good, you can replace it.
In some cases, it might be better to follow our next point …
10. Make your home more efficient
Improving the energy efficiency of your home, perhaps through better insulation, is one way of reducing your heating bills and your environmental footprint.
There are several ways to do this, from loft insulation to upgrading doors and windows. All of this is in our helpful guide.
