Low carbon investment

Your money has a carbon footprint just as your personal consumption does. If you have bank deposits, superannuation, insurance policies, or investments, that money is being used for some sort of economic enterprise. Is it helping to finance a high carbon economy, or a low carbon one? In our market economy the choice is yours. You can choose where to put your money on the basis of likely returns and the degree of risk involved. You can also choose on the basis of what your investment, deposit or policy is doing for society and the planet. This is your right. (And this latter approach is often referred to as ‘ethical investment’.)

And it’s not just a matter of avoiding investments in industries and firms directly involved in maintaining a high carbon economy. You may also want to avoid investments in companies that finance these enterprises. You can deposit your money in banks that don’t lend to fossil fuel industries, and put your superannuation with companies that don’t invest in such industries (or offer alternatives among their policy options). And best of all, you can find banks, super funds and firms to invest in that are financing the new clean economy.

As time goes on it is becoming more financially prudent to take this path as well, because it’s predicted that fossil fuel industries will be left with unusable (or ‘stranded’) assets as the world switches to renewables, and companies that finance them will also be exposed as a result.

As well, you can be part of movements encouraging institutions – such as universities, local councils and church denominations – to switch their investments. An ever-growing number of such institutions across Australia and around the world are doing this. They often have noble aims and ideals, and so it is entirely consistent that they should use their investments to help build a safe low carbon world.

This area of activity is often referred to as ‘divestment’ – withdrawing from forms of investment that support a high carbon economy – but it’s also important to then invest in the low to zero carbon economy. To find out more, contact Market Forces or 350.org.