Reflection. We’ve all had plenty of time for this over the last few months haven’t we?
My own reflective journey started with the understairs cupboard. Decluttering and reciting the Marie Kondo mantra of ‘does this bring me joy?’ served as a painful reminder of how big a hoarder I have been in the past! Reminiscing over memories attached to items I have kept for sentimental reasons filled an afternoon or two, and I am thankful for the space we now have everywhere.
A less frenetic way of living, with fewer choices, has been the perfect environment for some deeper inner reflection too. It has brought into sharp focus what is important to me. The simple things in life are the ones which bring me the greatest happiness; cricket in the garden, family board games and connection with family and friends. Even if it is on Zoom.
But as the months extended and my own reflective journey coincided with great societal upheaval across the globe, I found myself ruminating more and more on bigger issues. The post-COVID world that we emerge into has the potential to be a truly great new world in so many ways. But will it eventuate? And what role can I play in it moving towards it?
Will it be the kind of world that I want for my girls to live in? A world where being ‘not racist’ isn’t enough and we all advocate for anti-racism. A world where consumption and greed don’t create huge, and widening, divides in our society. A world where progress isn’t at the expense of our planet. A world where being a women, or being gay, or having a disability allows you a seat, as an equal, at the table without having to fight every step of the way to get there.
So many big questions.
I don’t have the answers but I am even more determined than ever to play my part in moving towards the world that I want for my future.
I want to be able to make choices going forward which align with my values and to do that, I need to understand more. I want to take action, not just nod in agreement from the sidelines at the idea of a better world.
Voting for change
All across the globe, people are voting for change through their actions. The increasing popularity of veganism is a testament to the demand for change around our food supply chain. A desire to reduce our carbon footprint is impacting the choice of transport and energy we use. Most recently, people have chosen to boycott companies who treated their employees unfairly at the onset of the lockdown. But how many people have actively voted for change using their finances?
I am someone who talks about money every day for a living so I am aware of the huge power to do something meaningful in this world when we put our money where our mouth is.
When I chanced upon a TEDx talk by Dr Bronwyn King whilst browsing YouTube for something else, I knew that this was something I was meant to hear. She is an oncologist and talks about how each of us has the power to end the epidemic of tobacco related deaths using the power of the money we have collectively invested in our pensions.
No sooner had I watched this than I suddenly saw synchronicity in the message everywhere. In my role as a financial coach, women are increasingly asking to learn more about how to save and invest their money ethically; it is one of their primary concerns when it comes to how they approach their finances. They are still interested in financial reward, but not at the expense of their ethics and values.
Then I became aware that Richard Curtis was launching a campaign called ‘Make My Money Matter‘ (MMMM) calling on all of us to demand that the money invested in pensions in the UK - all £3 trillion of it - does better; through investments that do good not harm. I watched the kick-off webinar which included commentary from ex-Bank of England Governor Mark Carney and other pledge partners for the campaign and smiled my way through.
Yes, I thought. We all have a duty to make a stand. Our collective voice can and will be hugely powerful.
PensionBee were the first pension provider to sign up to be a pledge partner to the campaign. I’ve long known that having my pension with PensionBee is important to me because of the values which they uphold and which shine through in everything that they do as a company. From being paper-free, to their gender parity, BAME diversity representation and their commitment to the soon-to-be-launched fossil fuel free fund, their values are very much aligned to my own.
ESG, SRI and impact investing
The future is where you are going to spend the rest of your life, so it makes sense that you invest in companies who will pave the way for the future that you want to be a part of, and avoid those that don’t.
But where to start?
The terms environmental, social and corporate governance (ESG), socially responsible investing (SRI) and impact investing are often used interchangeably, assumed by many that they all have similar meanings. But this isn’t the case; they have distinct differences.
ESG looks at the company’s environmental, social and governance practices, alongside more traditional financial measures.
Socially responsible investing (SRI) goes one step further than ESG by actively eliminating or selecting investments according to specific guidelines. SRI criteria are used to either select companies based on a positive screen for the good that they do, or screening out those that don’t e.g. the tobacco, gambling and deforestation industries.
The term which I personally find really interesting and have been learning more about is ‘impact investing’. Impact investing looks to support businesses which are structured to deliver specific positive social and/or environmental impacts. With impact or thematic investing as it is also sometimes called, positive outcomes are the driving decision maker, meaning the investments need to have a positive impact in some way. This could be around plastic reduction, clean energy, gender parity or diversity.
How can you make a difference?
Find out what your pension is invested in and ask yourself if it is invested in a way which will solve the problem you want solved for our world.
If you are employed, talk to the person responsible for your employee workplace pension and ask what your pension is invested in. So many people remain invested in the default fund in their workplace pension; they don’t have the knowledge to confidently choose an alternative. However, if the default fund was an ethical fund, this would make a huge difference to the power of the millions and millions invested in employee workplaces throughout the country. When we ask, our employers have a duty to consider the request. Use the power of your voice to demand change.
If you manage your own pension, seek out companies or funds which are invested in companies which will deliver the world that you want to be a part of. I am excited for PensionBee’s fossil fuel free fund launch later this year. I am ashamed to say that in the early days of my investing career, I focused my investments in the large miners with no thought for the environment; moving my money to a fossil fuel free fund will atone in part for those errors.
I believe we are moving towards a world where the majority of funds will be impactful and socially responsible by default. As Mark Carney said, the MMMM campaign is pushing on a door which is ajar already. There is a drive towards sustainable funds being the norm not the exception which we have to go looking for, but I believe that collectively we can use our voice to demand this societal reset sooner.
Emma Maslin is a certified Financial Coach and Mentor, Financial Wellness Speaker and Founder of multi award-winning personal finance education website The Money Whisperer. A former Chartered Accountant, Emma believes financial health and wellbeing isn’t a luxury just for the wealthy; it’s a basic need for all of us.
