November 17, 2022 2:59 pm

Is your money green?

Investing consciously in the world you want to see

The 2022 United Nations Climate Change Conference is taking place in Sharm El-Sheikh for most of November as world leaders gather to review, renew and agree countries’ targets and commitments to tackle the global climate crisis.

Roundtables, speeches, lectures, workshops, debates – there’ll be plenty of words at COP but, as ever, those are relatively easy …

Actions versus words

When it comes to the environment, a company (or even a country) that’s hot on words and less so on action may be accused of greenwashing.

Greenwashing isn’t new. The phrase was first coined in the 1960s when hotels began asking guests to use towels multiple times to “save the environment”. Really, those hotels wanted to drive down laundry costs.

Greenwashing is when a company puts more effort and budget into publicising its environmental chops than they do to make an actual difference. It ranges from exaggerated claims to blatant fraud: Volkswagen’s rogue emissions tests, for example.

Why would a company do this? For one it’s easier. For two, they know their audience.

Marketing green

Recent research points at people, especially young people, being happier to engage with brands and companies they perceive to be ethical.

Nielson’s Global Corporate Sustainability Report found that 66% of consumers would spend more on a product if it comes from a sustainable brand, and that jumps to 73% among millennials.

So companies have a glaring incentive to go green, or at least to be seen that way.

Investing for good

It’s important to know that — given the climate is in crisis — we can make an informed choice in where we invest our money.

We can entrust our investments to experts who will appraise and scrutinise the environmental claims and credentials of companies, pension schemes and funds so we can make a return without compromising our principles.

Experts can identify gaps between words and actions, and point out where the carpet doesn’t match the drapes. As investors, we can move consciously to endorse the companies, and the world, we want to champion.

There are different ways to engage with a more ethically-minded company or fund, and this guide from The Times is an ideal starting point.

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