How to make your money do good

Andy Kenworthy, from the Sustainable Business Network, takes a look at the power in your pocket.

Money, we are told, is the root of all evil. But it also makes the world go round. So can we make the world go round a little better by changing what we do with our cash?

Of course we can! From the smallest purchase to the largest investment, everything we do with our money has an effect on the world around us. In today’s hyper-connected global economy, that effect can stretch a long, long way.

Shop minimal, and ethical

One of the most immediate ways to ensure your money is doing good is to stop it from doing unnecessary harm. Unfortunately, most products still come with a side order of exploitation of natural resources, waste and pollution. Bluntly, the less we buy the better. But we all have the need for a certain level of comfort, and we want to enjoy life. Taking more time over what we buy can make the best of both worlds.

This ‘conscious consumerism’ is a whole subject of its own and can feel overwhelming. But the basic principles are these. Consider whether you really need something new, or whether you could reuse, share, hire, repurpose or recycle something. Choose the least environmentally and socially damaging option you can afford.

This last one is a balance. Consider shopping local. Look out for trustworthy certifications and labelling of the product and its packaging. Take the time to find out what the company you’re buying from contributes to our world, and how it impacts it.

This is an art, not a science. While the parameters change over time it’s not something you have to dedicate your life to. A little consideration and care goes a long way.

Invest in a better future

It’s not just the money in our pockets that we can use to improve the place. Our investments and even our debts can join the struggle if we make the right choices.

One of the most powerful ways most of us can do this is through our KiwiSaver. Your KiwiSaver funds are invested all over the world. You might be surprised to find out where that money – some of which is your money – ends up.

Most of us wouldn’t want our retirement paid for by us investing in weaponry, pornography, animal testing, fossil fuels, gambling, environmentally destructive palm oil plantations or other industries implicated in human rights violations.

But without checking, that might be what’s happening. Thankfully, in New Zealand Barry Coates, a former long serving director of Oxfam New Zealand, has established Mindful Money. Mindful Money provides comprehensive information on KiwiSaver and major investment funds. This makes it easy to check that your money is not being invested in things you don’t agree with.

These days you don't have to hunt outside the mainstream to invest ethically. Neither do you necessarily have to accept greater risks or lower returns. There are plenty of well-performing options with reputable providers.

Today businesses increasingly emphasise ESG – “Environmental, Social, and Governance” strategies. They promote sustainability. This is the way the investment world is going.

Funds demonstrating these values regularly outperform the rest of the market. The World Business Council for Sustainable Development says sustainable business will be worth $12 trillion a year by 2030. So you can do good and live well at the same time.  

Don’t just give to charity, invest in it too

Providing funds to charity is another way your dollars can help make a better world. But it can be hard sometimes to know how much of a real difference you are making.

This is particularly true in Aotearoa New Zealand. According to the 2019 Charities Services Annual Report, this country has 27,146 registered charities. We have one of the highest number per capita of charities in the world, with one charity for every 190 people. Many of these are small private trusts and foundations that you’re unlikely to encounter. But there’s still a blizzard of good causes out there. So how to choose?

I’ve been working in the charity sector for nearly 20 years, especially in fundraising. One of the best ways to have a more meaningful experience is to foster a long-term relationship with a cause you really believe in. Part of this approach is to see your relationship as an investment, rather than just a donation. Focus your attention and funds on one or two charities. This helps them more substantially. It means you have more influence on the relationship. It avoids various charities bombarding you with leaflets and phone calls.

Select your chosen charities carefully. Take a bit of time to see who runs the organisation. What is its history? How does it perform? Charity Services in New Zealand offers a register, complete with financial reports. Most large charities have an Annual Report and/or impact reporting on their websites. They should provide hard statistical evidence of the good they do. They should also have plenty of moving stories to inspire you. If you’re not getting enough information, ask for more. This helps all charities to up their game.

Use money to gain time

Making your money do good principally requires just a little more care and attention. But in today’s busy world, time to act in these ways is the greatest riches of all. We seldom get the time to pause and consider doing things differently. So that’s one final, and powerful way, to make your money do good. Earn and spend in ways to give yourself time to live the kind of conscious, caring life we all want.

Find out how MAS has implemented a responsible investing approach here.