Keen to reshape your finances to integrate a more conscious approach? Sustainable living is being referenced more and more in our day-to-day lives, whether it’s a friend mentioning their commitment to eating less meat or a family member deciding to boycott fast fashion. All these actions can help to make a difference.
Sustainability revolves around meeting the needs of the current population without compromising the needs of future populations – in other words, taking care of the planet so that its resources aren’t depleted prematurely. The UN’s Sustainable Development Goals (SDGs) reflect a more granular approach to achieving sustainability across the globe.
As for sustainable finances, there are a few things to consider.
Understanding sustainable finances
Sustainable finances, otherwise known as ‘green finances’ is defined as a loan or investment that supports environmentally friendly activity. When you make a financial choice, you should consider the environmental impact of this choice. For example, you might refrain from investing in companies causing damage to the environment.
Something to bear in mind is that switching to green ways of living can be more costly in some cases and green finance is there to offer an incentive for us to make this switch.
There are several avenues you can explore when it comes to green investments. Examples include green loans, ESG derivates, sustainable mutual funds, solar bonds and other types of socially responsible investing.
The benefits of making these investments include the increasing global attention in these areas, which means you are likely to make a good return on your investments. There’s scope for ongoing innovation within sustainability and a lot of funding to galvanise this.
As well as this, it means you can invest freely with a good conscious knowing that you are making financial decisions that can benefit people and the planet. By redirecting your investments towards companies putting the environment first, you can help to influence positive change.
Budgeting for Sustainability
When it comes to everyday items or services that are more eco-friendly, you should bear in mind the potential costs. Often, these goods and services are a little more expensive due to more sustainable materials and fair worker wages. Often, other products or services are cheaper due to a level of exploitation within the supply chain, both in an environmental and social sense.
Budgeting is a good place to start. By siphoning off a portion of your income each month, you can regularly commit to sustainable finance, whether through investments or in your everyday purchases. Some people may opt for credit building savings accounts to help you build a separate pot of money intended for sustainable finance purposes. You can also use budgeting apps and planners and adjust your finances as required by tracking your spending.
To conclude, sustainable finance doesn’t have to be overwhelming. Take those initial first steps and build on your strategy as you feel more comfortable over time. Investing with a clear conscience will feel hugely rewarding!