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I’ve noticed that family and friends are becoming more conscious about how their actions impact the planet: small things like refusing a plastic straw and switching off the lights in a room not in use. I know that these small actions alone won’t solve plastic pollution or climate change, but every little bit helps. As someone who works in sustainable finance, I feel we can all take similar small steps when it comes to greening our personal finance choices.
We currently face the twin crises of accelerating climate change and nature loss. In this decade of action, we require total system changes in the way in which we generate electricity, get around, cultivate our food and manage our waste. Linked to this is keeping an eye on where our money goes and how it is being used.
It’s quite common to see advice about how you can save energy, reduce food waste in your kitchen or repurpose old household items. Less often do we think about how our pensions, savings, investments and banking choices impact on nature.
I've been working in the finance sector for over 10 years, and I know that through the power of financial institutions, we can drive sustainable growth. My experience at WWF, in the sustainable finance team, has given me the chance to engage with stakeholders across the financial sector, from banks to asset managers and insurers. There are passionate people across financial institutions that are working hard trying to embed sustainability in their organisations and offer green financial solutions to their clients. While these solutions often target corporates, businesses and other institutions there are also environmentally friendly financial options for people like you and me.
Here are a few ways you can start to think about how to green up your personal finances for a more sustainable future.*
Have you ever considered the environmental impact of your bank account? I am not talking about how you spend your money in the account but rather what the bank does with the fees you pay for their services. You may have questions about where the bank is investing its money, what its sustainability commitments are and whether it has a plan for a carbon-neutral future. Be a conscious consumer and find out.
Many people find it difficult to plan what they are going to do for their birthday, or even the weekend, so when it comes to retirement planning for something that’s 10, 20, or even 30 years into the future, it can be overwhelming.
If you haven’t already, it’s time to speak to your financial adviser about options for you to start saving for your retirement. Even small contributions make a difference because over time the impact of compound interest can be significant and all those small contributions will add up.
When I think about retirement savings, I also want to make sure that we have a future worth saving for. I would like my money to be invested in companies and assets that are going to support a sustainable future.
The Sanlam Living Planet Fund** is a green financial solution which is a collective investment scheme (formerly known as a mutual fund), and because it adheres to Regulation 28 of the Pension Fund Act, it can be suitable for investors looking for an environmentally sustainable retirement solution. It is supported by WWF and integrates environmental risk principles into the management of the fund. It is invested in green bonds, renewable energy and water infrastructure.
When it comes to personal finance, retirement is an important stage of planning but it’s not the last. As difficult as it may be to consider, you also must plan for what you want to happen to your finances and assets after you pass.
Good financial planning, and life planning, involves having a will. But did you know that you can include nature in your will, so that once you pass you can leave a bequest to support the ongoing conservation and protection of the natural environment? The WWF Legacy option allows individuals to bequest a portion of their estate to WWF to continue protecting the environment and to ensure that, for your loved ones, there is a world worth living in and to continue the positive impact you have on nature.
In addition, bequests are exempt from tax. And, if circumstances change, you always have the option of amending your will.
When it comes to you and your money it’s important to know what options are available that suit your individual needs. These are just a few options to help you make a better impact on the planet through your finances. As more people start to question their financial service providers and ask for nature-positive financial products, those providers will create more solutions to make sure that they can keep existing clients and attract new ones. We can create a greater demand for innovative sustainable financial solutions and build a better tomorrow. I hope you’ll follow me R1 at a time.
*Thanks to my expert colleagues, Wendy Engel, Thabang Selota and Michelle Govender, for their contributions to these tips.
**Collective investment schemes are generally medium to long-term investments. Please note that past performance is not necessarily a guide to future performance and that the value of investments/units/unit trusts may go down as well as up. A schedule of fees and charges and maximum commissions is available from the Manager, Sanlam Collective Investments. Additional information on the proposed investment, including brochures, application forms and annual or quarterly reports, can be obtained from the Manager, free of charge. Collective investments are traded at ruling prices and can engage in borrowing and scrip lending. The Manager does not provide any guarantee either with respect to the capital or the return of a portfolio. The fund may from time to time invest in foreign countries and therefore it may have risks regarding liquidity, the repatriation of funds, political and macroeconomic situations, foreign exchange, tax, settlement, and the availability of information. The Manager has the right to close any portfolios to new investors to manage them more efficiently in accordance with their mandates.