December 22, 2022

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Sustainable Finance Action Plan: Doing More Good With Your Money

The global financial system relies on growing consumption to sustain an ever-expanding economy on a planet with finite resources. Money is not only an exchange medium to buy the things you need or want. Every time you purchase a product or service, you vote. Unfortunately, most purchasing decisions contribute to the further destruction of the environment and exploitation of people. Financial literacy is now a crucial skill for making purchase decisions that can make a difference. Use your purchasing power to do good - for you, the planet and your bank account. It is easy, I will show you how!
Written by Veronika Tietz

Money makes the world go round is a stubborn attitude. Nonetheless, the modern financial system is all we know, what we grew up with and daily use. Capitalistic systems benefit from us spending money on what we do not need. Even worse, you are supporting polluting industries with your money without knowing, but we will get into that in a bit. Sustainable finance is salvation in an emergency.

There are different ways to use your money effectively to support sustainable causes. Some tips require you to put in a bit of effort. The most important is to rethink your spending habits and become financially literate with a touch of sustainability. 

Good news: It is easy to implement the following tips. They require some effort and time, but in the long run, you will not only make more eco-conscious decisions, but you will also save money. Remember: Sustainability is not expensive. Instead, it takes the pressure away from you and your wallet.

I am not a financial adviser. Those tips are simple actions to consider to live more sustainably. If you need financial advice, contact a professional within this field.

Easy to implement sustainable finance methods to strengthen the common good with money

Switch your bank to a socially and environmentally responsible one. Why does it matter which bank you use? Your money in your account acts as a supporter of polluting industries that harm the environment and people. When you put money into your bank account or receive your paychecks it is not waiting for you. Your bank of choice uses your money to invest in diverse projects. Every bank has a different investment strategy with different goals. Notably, many banks invest where they see the most profit: fossil fuels.

According to the Fossil Fuel Finance Report 2022, you support the fossil fuel industry, if you are a customer of JPMorgan Chase, Citi, Wells Fargo, Bank of America, RBC, Barclays or MUFG. Many more banks put your money towards the destruction of the environment for short-term profit. Check out your bank’s website to find out what type of projects they invest in.

It might not be your intention to support polluting and destructive industries like oil, coal, gas, deforestation, weapon production, modern-day slavery etc. Simply keep in mind that the people working in those banks prioritise profit over sustainability. 

What to do? Easy, switching to a socially and environmentally responsible bank. Depending on your country, you might have many or few options to switch to an eco-conscious bank. How to know that a bank is socially responsible? I provided you with a simple ethical and resp

Ethical Banking

Investing in your sustainable future. It is a similar principle to a sustainable bank, but now you actively invest your money in sustainable causes. I’m not a financial adviser, but many specialised investing companies help you invest ethically and environmentally responsibly. 

Some sustainable finance investing businesses are

There are many more, but those are the ones I know. If you have gained positive experience with an ethical investment business, let us know in the comments to expand this resource pool.

Superannuation: The Australian way of saving for retirement. For everyone who is not familiar with the concept of superannuation: It is a retirement system – the Australian pension program – where your employer puts a certain percentage of your wage into your super account. 

Likewise, the money is not sitting in the super fund. Most superannuation accounts invest your money into polluting industries to gain more profit. You have the choice to switch to a responsible super.

Here are some ethical supers for more financial sustainability

Spend your money on good causes

Avoid aggressive sales marketing like Black Friday, Valentine’s, Mother’s Day etc. Do not get lulled in by false promises. More and more businesses use those ‘special’ days to get your money by pretending to either give you a huge discount or pressure you to buy stuff for your loved ones they do not want. 

Instead of wasting your time buying gifts, spend your time and not your money with the people who are important to you. Although it might sound dull to some: Making experiences together is more valuable than any material gift.

According to this survey, more than 50% of gifts are unwanted and land in the trash or get thrown in a corner. 

Have a look at the graphic below. It shows that time is the most valuable we can give to another person. ‘Loneliness and weak social connections are associated with a reduction in lifespan similar to that caused by smoking 15 cigarettes a day.’ Let that sink.

Self Reported Loneliness

Social connections and loneliness: Self-reported loneliness from Our World In Data

Spending time instead of money with your loved ones is not only better for your wallet, but for your and their mental health. Additionally, sustainable finance enables you to gain more time, the time you need to fill it with what really matters.

Buy local and support small businesses in your area or on vacation. When I buy directly from local producers or craft people, I sometimes imagine that my spent money puts food on their table, supports their family holiday or reduces their financial struggles. Independent businesses are run by real people who might live around the corner from you – not by algorithms or boards. 

Small businesses want to share with us what they value the most. It is a different kind of care and quality. Hence, they contribute to more diverse societies. Independent businesses make a neighbourhood more livable and affect its quality of it for the better. 

Support marginalised (business) groups. Life is tough enough, and no one should endure more hardship because of senseless societal norms. Support businesses where people with disabilities work. In my home city, a cafe employs only people with disabilities to serve customers. Another restaurant I enjoy going to is an Eritrean one where people from abroad get a chance to learn the trade of working in the kitchen. 

Support the work of First Nation people, LGBTIQ, ethnic minorities, migrants, refugees, rural dwellers and women and girls. Those communities wrongfully experience societal barriers – for no good reason

Boycott amazon. The evil is not only Amazon but every industrially-operating organisation. Although Amazon is notorious for tax avoidance, horrible working conditions, slave labour and catastrophic environmental impact, it made $502.191B this year (2022). Fueling those companies run by maniacs with our money needs to stop. Sustainable finance entails avoiding companies that do no good at all.

Ask yourself: Do I really need it? The most sustainable choice is not buying. It excludes essentials like food and living costs. Money makes the world go round, but only for those whose businesses are based on exploitation and destruction. A sustainable lifestyle is not about what to buy, but how to live. Impulsive purchases bring only a short burst of endorphins. How we live is more important than what we have. 

My mum likes to say: ‘At the end of your life, the only thing in the coffin is you. You cannot take anything else with you’ 

Here are some tips for handling money more sustainably:

  • Consume/Buy less stuff. Differentiate between what you want and what you need. Focus on buying what you need.
  • Buy second-hand.
  • Learn how to stick to a budget. 
  • Track your expenses to understand your purchasing habits.
  • Learn to repair what broke. Many tutorials are freely available.
  • Go reusable. Use what you have for as long as possible.

Consider alternative currencies. There is no guarantee that the money we have in our accounts or as cash will prevail. Due to the monopolisation of our monetary system, it is more fragile as highlighted by financial crises. The consequences of monopolised financial systems are unemployment, societal disruption and human suffering. 

Money is a social construct. In fact, human-made constructs are fragile if not developed under sustainable principles. History has shown that systemic change in monetary systems happens only after a crash. Therefore, the time for waking up about financial fragility is now.

Sustainable Living With Money: Money for thought

The misconception of money makes the world go round is not trivial. Financial crises can be highly destructive and are obviously not compatible with sustainability. It is worrisome that money has such an impactful power for the future of humanity and our existence on Earth. Sustainable finance is a simple skill you can learn and practice. 

Related:

Sustainable Cleaning Tips For A Clean And Eco-Friendly Home

Rethinking our financial system is a needed opportunity to find effective solutions for a flexible, resilient and fair monetary system. Nonetheless, it is quite an ambitious undertaking. Is there a chance that we control money and not the other way around? My stance is the simple act of buying less and local. 

Sustainability Wordlist

Join the Reimagine Sustainability Community for weekly inspiration towards more sustainability in your life

If there are any tips regarding financial sustainability, let us know in the comments. I aim to keep this article up to date with different strategies to live financially sustainably; every input is more valuable than any dollar note in the world.

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3 Comments

  1. Fransic verso

    Great tips, definitely we need to use and spend money on good causes and be careful. Thank you for sharing these awesome tps!

    Reply
  2. Coffee money

    There definitely needs to be more ethical banks in order to change people’s views. In the UK as far as I am aware sadly there are only a handful of these types of banks.

    Reply
    • Veronika Tietz

      I agree that diversity is important, in any sort of industry. I wonder if it makes a difference to have more ethical banks as long as you have the choice to switch from an unethical and unsustainable bank to a sustainable bank.

      Reply

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