Sustainable Detox: Money
Detox Introduction
Hi! I’m Molly, a businesswoman and new mom that wanted to feel less helpless about climate change. I created this detox to help define what individuals have the power to do and explain why it's important to do so. If you’re new to the detox, you can view the full intro post here. This post specifically focuses on money!
Your actions and abilities may seem small, but they're mighty and can create beautiful change for ourselves and our posterity!
The Impact of Our Money on the Environment
I used to think that the only “good” I could do with my money was to donate to a nonprofit or church, but that’s not all your money can do. Yes, donating to a nonprofit is great, but there are so many opportunities for your money to create positive change. It can be used for the action items in the previous detox categories and it can also be purposefully used through your banking and investment options. Exciting, right?
How? We have so much power in how we spend, store, and grow our money. Everything that we do with our money has a reaction. If we invest our money in stocks or funds we’re supporting the business practices of those companies. If we put our savings in a bank, we support and fund the loans that financial institutions give out.
What we put money and energy towards will grow. Isn’t that awesome? I know it feels like you’re just one person in all of this - but your choices matter! Each time you use your money is an opportunity to vote for the world you want to see.
Actions for Improving our Money!
The overall goal is to make financial choices that reflect your values. There are three main ways we use our money - we spend it, we store it, and we grow it - and there are opportunities within each of these categories to make positive change…
#1 - Bank Purposefully
#2 - Grow your Money with Intention
#1 - Bank Purposefully
Why should you care where you bank? Because big banks can use the money you store in their institutions to fund projects that you may not support. Big banks continue to fund fossil fuel projects. “Fossil fuel financing from the world’s 60 largest banks has reached USD $4.6 trillion in the six years since the adoption of the Paris Agreement, with $742 billion in fossil fuel financing in 2021 alone (Banking on Climate Change).” For example, having £100,000 in a high-street business bank account in the United Kingdom can cause the same CO2 emissions as 127 return flights from London to Rome due to the bank investing in fossil fuels (GreenBiz).
What can you do to show that you don’t support those actions? Bank purposefully. How?
A) Find out if your bank is contributing to climate change issues. You can look at this report sponsored by the Sierra Club and the Rainforest Action Network.
B) Search for a new bank that supports your values and open a new account! Where? Below are some places to look - just make sure that whatever you choose is insured by the FDIC.
The Global Alliance for Banking on Values - is a network of independent banks using finance to deliver sustainable economic,
social, and environmental development. Search their member page to find a bank near you!CDFIs - a Community Development Financial Institution (CDFI) Certification is a designation given by the CDFI Fund to specialized organizations that provide financial services in low-income communities and to people who lack access to financing.
Online Only Banks - there are several B Corporation banks you can bank from completely online! The customer experience may not be extremely savvy just yet, but the more of us that join will give them the finances to make it better!
C.) Do all the money moving logistics. Change all your direct deposits to your new account, change all your billing to your new account, and transfer your money to your new account.
D.) Break up with your current bank. Close your account and write to them to tell them you’re leaving because you don’t support their policies! Here is a sample letter if you need some inspiration!
Also, if you’re not ready to break up with your bank and it’s one of the banks committing harmful acts to the planet, you can write to them and tell them that you’re not pleased with their actions. If many of us did this - they would have to start listening!
#2 - How to grow your money with intention.
Do you have a Roth IRA, 401K, or brokerage investment account with other investments? Do you know what stocks are actually in those accounts? Many people don’t have the time to learn since the information isn’t easily accessible. Because of this, “99% of Americans with 401(k)s are invested in fossil fuels” (Our Sphere). Investment banks create target date funds and index funds full of various stocks and bonds, but we rarely question what is inside these funds because they are made by “experts”. Well it’s time to start questioning because many of these funds are perpetuating climate change by the businesses they are supporting! Also, fossil fuel companies in particular are not only bad for the environment but a risky investment because the world is actively trying to reduce its dependence on oil and natural gas. So what can you do about all of this?
The Easy Way
Find a financial advisor that specializes in impact investing or talk to the one you might currently have about impact investing! Tell them you’d like to invest in line with your values and that you would specifically like to divest from fossil fuel companies.
The Manual Way
#1 - See if your current portfolio is funding fossil fuels. You can do this by…
Search ratings for the funds that you invest in with fossilfreefunds.org. This website rates funds based on the companies that the funds financially support
Searching ESG Ratings for the individual companies that you invest in. You can find these sustainability ratings…
Yahoo Finance: search the symbol for any company that you invest in and then click on the “sustainability” tab to view its Sustainaltics ratings
#2 - Research new opportunities the same way you found out about bad ones.
Search for the top rated funds at fossilfreefunds.org
Search ESG Ratings of Individual Companies by using the steps above.
#3 - Reallocate your investments - begin moving your money around to the “greener” places. This is another point in time to check in with a financial advisor to make sure you have the proper allocation for your personal age group and situation.
What You Can Save!
For banking, most of the bigger banks funding fossil fuels provide consumers with very low returns on the money in their checking and savings accounts. Other, more environmentally friendly banks offer better ratings along with their better values.
As for stocks and investment funds, there are many different viewpoints on ESG and impact investing. Ultimately, if companies ignore climate change, its impact on the environment, and what climate change will do to their business practices, then they will not only be hurting the planet, but they will also fail to perform financially for the long term.
What I’ve Done
I’m going to be honest. I’ve only broken up with one bank and told one other institution that I would like more environmentally friendly investment options. I have a lot more work to do and the research for this blog post has lit a fire under my badonkadonk (I’m a mom now and can’t say bad words now - especially in writing). My next step is to sit down with a financial advisor to make sure my money will be allocated efficiently based on the research that I have done!
How to Start
I leave you with a quote from The Future We Choose “Your money has the power to destroy or to build and it is no longer acceptable to remain oblivious to the fact.” So what are you going to do about it? It will take time and sometimes seem a bit scary, but it’s a thrilling, worthwhile journey!
As always, you’ve got this! You don’t need to conquer all these at once! Start with one task a week or even a month and then go from there. Whatever you need to do to be sustainably sustainable. Any little bit counts!
