Sustainability and Personal Finances

Here are 3 simple ways to introduce Sustainability to your Personal Finances

First, Get your Sh*t Sorted Out

Because we are talking about personal finance, first thing to do is to get your personal finance sorted out – money is not something you want to be passive about – and the strategy of not looking at your accounts and hoping for the best will not work. Wherever you are in your financial journey (debts, savings, employment), you want to know your financial situation, and deeply understand its intricacies, including key concepts like net worth, credit score, to build a long-term strategy that will work for you. If you don’t know where exactly to start, I strongly recommend these two YouTube channels that will help you get started and build financial tools:

Second, Money is Power

Companies pay close attention to 2 things, what their investors want and what their consumers want. Every single dollar you spend in one service or product is perceived as an approval to continue/grow doing it for the company. In other words, each purchase means that you are willing to put your hard earned money behind it! And if there’s one person like you, the chance is there are plenty more, so the company will continue to invest in this product/services and to grow it.

So what can you do? You can take some steps to consciously research the sustainability of the company and good/service (environment, social and equity considerations) you are looking to buy, and you put your money behind those products or services that ARE sustainable, or at least not harmful to the environment and your local society. If you make a conscious effort to do that, once in a while, and influence people in your circle to do so too, then companies will start to take notice, and over time adapt their offer.

Invest… Strategically!

This step is for anyone who is investing or looking to invest money, whether in the stock market or in individual companies. There are tools now (and this has exponentially changed in the last 2 years since I’ve been starting to track these efforts – and is likely to evolve significantly in the next few years) to help you gauge upfront whether or not companies have integrated sustainability in their operations and mission. ESG ratings are one of these tools and they represent scores attributed to a company based on their practices concerning three factors : Environmental, Social and Governance. For each one of these categories, ESG ratings give you an idea about how a company performs, and allows you to compare it with other companies in the same industry.

One of the ESG ratings platform I use the most, that is both reliable and free Sustainalytics, which offers a ESG Risk Rating (from 0 to 40+) for companies and stocks/ETFs/mutual funds, where the higher the rating, the less sustainable the entity. I really recommend starting there, if you want your investment portfolio to include some sustainability considerations, because it is a lot of data, metrics and measures readily simplified for you!

That’s it – 3 Simple Steps

So get started on whichever step you are on, and I hope you grow your sustainability journey through your money!