Whether you have money in the bank, invest on the stock market or have any kind of pension - you are either indirectly or directly funding specific companies. More often than not, that will also include some companies who have caused significant damage to the environment, continue to do so or have inadequate policies to reduce their emissions.
Pensions
Let's take your pension as an example just to demonstrate why it matters. Pension funds (e.g. the money you and your company contribute each month) - are invested in one way or another. At a high level this means they are providing funding to companies in the aim of gaining returns which are then used to pay the pensions of its members. Generally pensions tend to invest in "lower" risk options because obviously not being able to pay their members is not a situation any pension wants to find itself in - although sometimes you get to pick to an extent.
Ok, I'm following so far...
Good, so for most people, their pension will often be the biggest "investment" they have. There are some different types of pension but as an example, a pension with trustees may appoint someone to look after their money and invest it on their behalf. You may have some options into how it's invested, but if you don't pick something they will pick for you. Generally this is positioned to you as risk levels for example, low risk vs high risk with varying levels of forecast return. You may even in some cases get some high level view on what the money is invested in but more often than not people don't really know. Hopefully you can see where this is going now - but long story short, you will likely be investing in some companies you perhaps wouldn't want to invest in. A good example would be fossil fuel companies because they are generally quite "safe" investments - because we've always needed energy (and still do) and they always tend to make a decent profit (understatement of the year recently!) thus they generally always generate a decent stable return alongside the fossil fuel company profits.
Wait, so I'm basically funding fossil fuel companies?
Probably which is one of the reasons we've put this section together. Whilst we can't and won't give you financial advice, what we can hopefully do is help you make more informed choices about your investments and pensions factoring in climate. Whilst one individual change in investment is a small drop in the ocean for a big company, as with most things climate - the cumulative actions of many can make a big impact.
If you have any thoughts, feedback or ideas you wish to contribute on this or any other topic covered by The Climate Coach - please get in touch, we'd love to hear from you.
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