Ever wonder what your moolah is doing when you’re not looking? Same. So many of us spend or invest money each and every day yet we’re not actually that clear on where it all goes once it leaves our pocket.
Whether we’re giving cash to a new clothing brand, dabbling in a tech startup or investing in stocks, most of us don’t give a second thought to the companies we’re aligning ourselves with — and what they actually do with all those dollars.
But it doesn’t have to be that way. Now more than ever, we have the chance to make conscious decisions about how we spend our money and which companies we choose to invest in. Here’s everything you need to know to ensure your money creates a positive social, environmental and humanitarian impact whenever you invest, spend or donate.
Exploring your core values
At a time when energy demand and fossil fuel emissions continue to rise, it’s important to start thinking about the values and visions you have for your own future and for that of your community. What matters to you? Is the money you’re spending or investing supporting these ideals?
If your values don’t align with the values of the companies you’re regularly investing in (this could even be the businesses you buy your morning coffee from) then it’s time to shake things up. Maybe you might decide to place a once-a-week lunch order with a local organisation aimed at providing less fortunate individuals with nutritious, restaurant quality meals?
In an ideal world you would steer away from any organisation that enables or supports those who harm people, animals or our planet. By making a conscious decision about who you give your money to and consciously considering the impact of the goods you buy each and every week, it’s just one way you can positively affect the environment and culture around you with real-world and actionable steps.
Where are your hard earned dollars actually going?
Image: Melissa Walker Horn on Unsplash
When it comes to investing your money ethically, it’s important to look toward organisations that actually put ethical considerations first and refuse to invest in harmful sectors in any way. This is particularly important when it comes to your super or retirement savings, as this is a decent sum of money you accumulate over a long period of time.
Some ethical funds tend to operate according to a set of carefully laid out principles. For example, Australian Ethical are guided by their own Australian Ethical Charter, which has been unchanged since 1986. This guide lays out 23 principles (12 positive and 11 negative) that help them rule out harmful companies while also actively including companies that are supporting people, the planet and all our animal friends.
Look toward organisations that actually put ethical considerations first.
This means your money gets used for good instead of being invested into harmful industries like Big Tobacco or fossil fuels — aka gross and unsustainable businesses. “We provide customers with regular updates about companies we avoid as well as some of our investments,” says Stuart Palmer, head of ethics research at Australian Ethical.
Each year, Australian Ethical also gives a considerable chunk of its annual profits (after tax and before bonuses) to charitable organisations and social impact initiatives — in 2018, the company granted $620,000 to 26 organisations.
“It’s a requirement of our constitution that 10 percent of our profits go to not-for-profit organisations and social impact initiatives making a difference in Australia and around the world,” he adds.
Keen to see whether your own super fund is investing your money ethically? Well, there’s a quick way to check. Simply head to the official website of your own super fund and look back through their annual reports. The information is there if you look closely.
Alternatively, you can also question them directly on social media. If you’re not happy with their ethical investing strategies, it might be time to look into switching your super to a truly ethical fund instead. Remember, what’s good for you is good for the planet.
Helping to create a better tomorrow
You can drive change based on who you choose to invest with.
While there’s nothing necessarily new or innovative about wanting to support a good cause (or withdraw your support from the organisations who don’t align with your beliefs), the idea of investing ethically has significantly taken off in the last five years, driven for the most part by millennials interested in discovering what their money is actually supporting. In doing so, this has provided thousands of Australians with the opportunity to drive change.
The more ethical investing is supported, the more pressure is placed on related companies and organisations to embrace ethical values of their own. As values and money become more and more linked, consumers now have the power to demand more from their super funds.
With the added help of instant information sharing and social media, pushing this drive toward ethical investing and sustainability is only becoming easier. Seems like a pretty great way to do your bit, without having to do too much at all.
Click here for more information on how you can make your money have a positive and ethical impact.