We’re all trying to do our bit to tackle the climate crisis, with our time, our choices, and our money. When it comes to how we use our money, we commonly think of how our spending influences climate change, taking actions such as swapping to a renewable energy provider, choosing sustainably sourced fish, or opting for a bamboo toothbrush over plastic.
These actions all help, but what about where we keep our savings?
Fossil fuel divestment
Fossil fuel divestment simply means ensuring that your money isn’t inadvertently funding global warming. Companies which run banks, ISAs, investment funds, pensions, stocks, and bonds can all choose to invest your money in oil and gas companies, so it’s worth checking where your money may be ending up.
Beyond divestment: investing in alternative energy sources
Climate change is a huge global problem. To solve it, we need to stop our reliance on fossil fuels for energy We also need innovation to fundamentally change the way our energy system works and ensure that we can have an alternative zero carbon energy system which meets our needs. Companies and organisations around the world (just like us) are already working on this. But without funding and investment, this innovation simply isn’t possible.
If you have spare money to invest, you could choose to use this money to act against climate change, investing in the companies who are shaping the future zero carbon world.
This type of investment comes under an umbrella often known as ‘ethical’, ‘impact’, ‘sustainable’ or ‘socially responsible’ investing, meaning that financial investments are chosen primarily based on the positive impact a company has – in this case on the environment. Ethical and environmental investment funds are becoming increasingly popular. According to the Schroders Global Investor Study (2016), 67% of investors had increased the amount of money they put into sustainable investments in the last five years.
I had a little money to invest, and saving the planet seemed like a good place to start.Low Carbon Hub Investor Member
Is it possible to make a good financial return through sustainable investing?
It’s often believed that choosing investments that are good for people and the planet will lower your financial returns. So is it possible to make a decent financial return from a sustainable investment?
The short answer: yes.
In the simplest terms, if a company is performing well, you will receive a financial return. But there has also been research which suggests that socially and environmentally conscious companies likely perform better.
A 2014 Harvard Business School study found that if you had invested $1 twenty years previously in a portfolio of public companies which were focused on growing their business alone, that $1 would have become $14.46. On the other hand, if the $1 had been invested in a portfolio of companies which focused on the most important environmental and social problems we face, whilst also growing their business, the $1 would have become $28.36.
At the Low Carbon Hub, for instance, we offer investors in our Community Energy Fund a return of 5% (capped at 4% for the first 4 years of investment)*.
Of course, financial reward is just one element of the ‘return’ by which ethical investors measure the successful performance of their investments. Your money can also generate significant social and environmental benefits.
*Capital at risk; no returns guaranteed.
How investing in the Low Carbon Hub helps to tackle climate change
At the Low Carbon Hub we’re pioneering a bold new way to tackle one of the biggest challenges we face – how to transition to a zero carbon energy system.
We’re already at the heart of a growing partnership of people and organisations across Oxfordshire, working together, for a low carbon future. Homes, schools, businesses and communities all over the region are already generating their own renewable energy and becoming more energy efficient in partnership with us.
And this success means we can do even more. We’re part of Project Local Energy Oxfordshire (LEO), one of most ambitious, wide-ranging, innovative and holistic smart grid trials ever conducted in the UK. It’s an incredible opportunity to fundamentally change the way the UK energy system works.
As a first step, this year we need investment to significantly grow our portfolio of community-owned renewable energy generation to allow these trials to take place.
So, this Spring we’re re-opening our Community Energy Fund, with a target raise of £1.5 million. Why not put your money to work tackling climate change, and pledge to invest in the Fund?
With your investment we can make an energy system that works for all of us, and for the planet, a reality.
- News story
Oxford’s climate emergency – and the role of the Low Carbon HubIn January 2019 the Oxford City Council officially declared a climate emergency in Oxford. In April they announced that Oxford would hold the UK’s first citizens assembly, to discuss how we should address the climate crisis within Oxford. This citizens assembly was held over two weekends at the Said Business School, the first in September 2019…