We try to do the right thing. You’ve already made the switch to clean energy, boycotted plastic bags, eat only dolphin-safe tuna and free-range eggs, chosen to buy only from ethical fast fashion providers, and generally reduced your consumption footprint in the interests of the environment.
But do you know that the choice of your bank is as vitally important when it comes to making a difference?
Enter the clean money movement.
So what exactly is clean money?
As its simplest level, clean money is basically money that doesn’t harm people or the planet; ideally it is harnessed to actively create positive social and environmental change.
The central message is this – simply by banking with a financial services provider that doesn’t invest in industries that cause harm, you are making a socially conscious choice that will have a powerful impact on the world.
Around the world, banks are actively choosing to invest in projects for social good, from anti-ivory poaching initiatives to clean energy projects, and shifting away from investment in nuclear arms, fossil fuels and projects that increase global warming.
In the case of Bank Australia, for example, it means an active decision to invest in socially conscious causes such as renewable energy, environmental projects, affordable housing and others. It also means consciously not investing, or divesting, in live animal exports, fossil fuels or weapons.
This is driving a profound change in the way we bank, says Professor James Arvanitakis, Pro Vice-Chancellor (Research and Graduate Studies) at Western Sydney University.
“The clean money movement has already had a massive impact. Only two decades ago, ‘ethical investment’ was something only for greenies or those that were seen to have radically different values, but now, we have seen it mainstreamed.”
Will van der Pol from Market Forces , an organisation launched in 2013 that monitors banks, superannuation funds and governments to see if they are financing environmentally destructive projects, agrees. “People acting to align their money with their values is incredibly powerful, and utterly necessary if we are to transition to a low carbon economy in line with the climate goals of the Paris Agreement.”
So what is driving this global movement towards responsible banking?
Its linked to two key forces.
The first is the rise of the conscious consumption movement that advocates for consumers to purchase products and services and support campaigns that create a better future for everyone.
This is reflected in various social movements for change from climate change awareness (spearheaded by the likes of Greta Thunberg, etc), to the #metoo movement pushing for equality and redressing gender power balances; to grassroots campaigns promoting ethical fast fashion and the end of single-use plastic bags.
As Susi Snyder, Nuclear Disarmament Program Manager for PAX No Nukes, and one of the leaders of the 2017 Nobel Peace Prize winning International Campaign to Abolish Nuclear Weapons (ICAN) tells SBS: “one could ask what is the purpose of investing for the future if there’s no future left to enjoy the results of the investments?.
“There are two massive existential risks out there right now - climate change and nuclear weapons, and investors know they can avoid financing the end of the world as we know it".
The second factor is the looming massive wealth transfer from Boomers to Generation X and Millennials.
Who says millennials are slackers? A demographic revolution
Clean Money Revolution author Joel Solomon says a profound demographic revolution is driving massive change across the financial world.
It’s being spearheaded by younger investors who are demanding that their portfolios—whether self-generated or inherited— be dedicated to mission-based or ethical, sustainable and socially just investments, Solomon says.
Millennials, born between 1980 and 2000, have immense financial clout. In what is being billed as the largest transfer of intergenerational wealth in history, $30 trillion will be passed from baby boomers to Generation X and millennials over the next 30 years in the US alone.
This massive shift is already shaping the business climate to make it more millennial-friendly. Why?
They will not only dominate the workplace of the future, with figures forecasting that by 2025, they will represent 75 percent of the global workforce, but will also reshape the business culture due to their belief in prioritising purpose over profits.
A November 2017 AFR report, for example, found millennials were the likeliest group to embrace ethical investing, and were passing on this preference to their parents.
So what does this all mean? A growing shift away from banks that don’t meet ethical standards and increased awareness of who is investing in what - for example, big Australian banks invested $7 billion more in fossils fuels than renewables in 2016, according to Market Forces.
So how can you make sure you’re part of the clean money revolution?
The easiest way? Think before you bank.
This can mean everything from seeking out “green” banks to choosing “socially responsible investment” (SRI) for your super or savings. This way, you’ll know for sure that your hard-earned money is not being funnelled toward financing industries like fossil fuels, tobacco, gambling or live exports.
Susi Snyder says socially conscious consumers should check their banks’ socially responsible investment policy- and make sure that there is an opportunity to exclude whole sectors - like the fossil fuel sector, or the defence sector. Organisations like the Fair Finance Guide offer case studies in certain countries to give people a chance to check the details. And if you want to avoid nuclear weapons- simply check Don’t Bank on the Bomb, which also provides country-specific data on companies and their investments.
For example, according to the organisation, six Australian financial institutions currently invest or make available an estimated USD$ 2,873.74 million in nuclear weapons companies.
Market Forces’ Van der Pol says: “People wanting to learn more about where their money is being invested can check out the Market Forces website to find out if their banks, super funds and insurers are investing in fossil fuels, and compare their approach to other institutions. Market Forces also makes it easy to get in contact with banks, super funds and insurers to find out more and push them to get our money out of fossil fuels.
“We all need to realise and utilise the power we have as bank customers, super fund members to hold the custodians of our money to account, and ensure our savings aren't being used to finance activities that damage the environment and drive global warming.”
Does your bank align with your values? To join the clean money movement, go to bankaust.com.au/cleanmoney