You’ve gone vegetarian, given up flying, and maybe you’ve even switched your energy provider… But what if we told you, there’s something you could do that is 21 times more effective at cutting your personal carbon footprint than all of those things put together? According to the Make My Money Matter campaign, that one thing is switching to a green pension.

“Banking”, “investing”, and (whisper it) “pensions” are all concepts that can feel pretty distant and daunting but where your money goes — from what you buy to where you keep your savings— plays a huge part in your carbon dioxide emissions and overall impact on the planet.

Most of us have a pension, even if we don’t keep track of it. In the UK, people over 22 earning more than £10,000 a year are automatically enrolled. Companies that manage the money you keep in your pensions (called pension providers) use that money to invest on your behalf. The aim of investing money in a pension is to help grow the money into a larger amount, which can have a big impact on how much you’ll have available when you retire.

However, most people don’t know where their pension is being invested. In the words of film director Richard Curtis, who co-founded the Make My Money Matter project: “I didn’t even know [my pension] was invested. I think I thought it was in a vault, growing like moss, and there’d be a bit more there when it came out."

It almost defies belief but that collective pension money (which racks up to about £2.6 trillion) is currently going to finance the fossil fuel sector, as well as to the tobacco and arms industries.

Instead, it could be used to invest in developing renewable energy and other climate solutions.

We rounded up three steps you can take to make sure your money is as green as you are. 

1. Green Your Pension

We’ve teamed up with Make My Money Matter to call on UK pension providers to commit to net zero and to invest in climate solutions, instead of sectors that actively harm the planet.

While it’s important that all pension providers take these steps, it may also be possible to switch your own pension to one that is already making green investment decisions.

There are several steps in that process. But it starts with finding out who your pension provider is, and then taking action like emailing your employer telling them you expect a green pension (Make My Money Matter have an email template) or speaking to your financial advisor about your options if you have a self-invested pension (which you may if you are self-employed, for example).

Some pension providers will already have an ethical or more eco-friendly option, but you will likely need to opt in. So check out whether that's the case for your pension provider, and opt in if you need to.

The Good With Money website, which offers advice on how to ensure your money is invested in ethical ways, has listed the six most ethical pension providers for this year, as a place to start. 

2. Switch to a Greener Bank

While banks haven’t always had the best reputations, some banks do have better records when it comes to which companies they lend to or provide services for. To help you, lots of research has already been done.

In 2020, the Ethical Consumer magazine ranked Triodos Bank — a sustainability oriented bank that only invests in companies that are beneficial to the environment — as the best in its climate change category as part of an overall ranking of ethical banking options.

The Co-op Bank is one of the most well-known high-street banks that has a policy of not providing banking services to the fossil fuel industry. That makes it a good choice for those looking to divest their money from dirty energy, according to Friends of the Earth — although the charity also points out that the Co-op Bank is part-owned by hedge funds and cannot control what those hedge funds invest in.

Nationwide is a building society that can be used as a current account and also claims it does not lend to or invest in fossil fuel industries, and neither does Starling Bank, a newer digital banking operation.

You might also consider getting a Treecard, not a bank per se, but a prepaid spending card (that is actually made out of wood, incidentally). You can send money from your own bank to your Treecard, tracking funds and spending on an accompanying app, and it will fund reforestation efforts with the transaction fees generated when you buy anything. The company, which launched in 2021, says that “80% of its profits will go to reforestation and climate investments."

Still confused? Find out more about what your bank (and your energy provider) are up to using the platform switchit.green.

3. Use an App to Track the Carbon Footprint of What You Buy

It’s easier than ever to keep a watchful eye on the sustainability credentials of the everyday products you buy. And while it isn’t up to individuals to change what big companies do, nor fight the climate crisis alone, greater customer awareness can help put pressure on companies to improve their carbon footprints.

There are a host of new apps you can use to assess what you choose to spend money on. The Yayzy app, for example, which launched towards the end of 2020, links to your bank account and tracks purchases to work out the environmental impact of what you buy.

It then offers suggestions about how to reduce your carbon footprint with more eco-friendly options. Or you can buy carbon-offsetting credits with Ecosphere+, an organisation Yayzy have partnered with that protects and restores forests.

Another option is Giki Zero, a social enterprise which has an app that lets you see the sustainability “score” they’ve given to thousands of supermarket products when you scan the barcode.

Giki gives each item “badges” according to how well the item matches up to standards on things like packaging (is it recycled or recyclable, for example), animal welfare, and how the product was sourced.