What do you envision for your 'golden years'? Are you travelling, exploring vibrant, and biodiverse landscapes surrounded by natural beauty? Perhaps you're living in a society thriving on equality and supporting a high standard of living for all. Does this ideal future resonate with you?
Desiring a better life for ourselves, families, nations, and the planet is universal. As climate change confronts society with rapid force, it can seem daunting even knowing where an individual can start to make a positive contribution but we're here to tell you it's not insurmountable. As Gandhi said, "be the change you wish to see in the world."
The power to change could start with the very next dollar you spend.
Every purchase you make creates a market signal that influences the way businesses and organisations operate in response to supply and demand. From the choice of milk you buy, to your next loaf of bread, or other seemingly small choices like using a reusable coffee cup or plastic-free alternatives when grocery shopping. They all directly shape our local economy and indirectly shape the world we live in.
So, vote with your dollar and put your money towards the future life you want by considering these three things:
1. Don't just set and forget
Behavioural economics tells us that we are prone to heuristics or mental short-cuts that can render our present-day decision making ineffective when it comes to our future. Present bias, for example, refers to our tendency to prioritise immediate rewards over future payoffs.
Some countries have a government policy addressing this challenge through mandated automated savings that cannot be accessed until we reach retirement age – saving whilst we're young, for financial security in our later years. For example, in Australia and New Zealand, you'll find superannuation funds; in Singapore, the Central Provident Fund; and in the US, there is a 401(k) plan.
These mechanisms are designed to be left untouched until our retirement, however having these "out of sight, out of mind" as they say, can limit the financial, social and environmental benefits from our savings. For many of us, these savings become our largest resource and greatest potential for creating change.
By carefully considering how your savings are invested, you can shape the type of world you want to enjoy in retirement. So, remember to investigate the companies and industries in which your money is being invested – especially money you may not touch for decades! If you're not happy, make the change and shift to another provider.
How? Check out the climate report of your superannuation fund to understand how their investments are impacting climate change. Climate risk transparency and disclosure will allow you to make more informed decisions. Read Aurecon's report on Australia's climate related investment considerations for superannuation funds.
Want to dig a little deeper? Check out the current projects and activities of companies in which you invest, as well as the climate-related financial disclosures in their annual reporting documentation. New international guidelines surrounding climate-related financial disclosures are anticipated to be widely adopted worldwide and companies will soon be required to report on this publicly.
2. Invest in yourself to create the future you want to live in
Investment choices now shape the climate of tomorrow. We often don't think too much about the impact of the companies we support through purchases, share investments or our superannuation, and the types of projects we indirectly fund through these decisions.
Some companies and products have a greater impact on the climate, environment, and society than others. The first step in driving change is to understand the problem.
Invest in yourself by spending some time understanding the issue of climate change and the role different sectors of industry play in both the problem and the solution – and what your part is in the big picture. In a recent survey by global industry research firm Investment Fund, 35 per cent of investors identified greenwashing as one of their concerns when investing, followed by experiencing difficulties in comparing responsible products.
How? Check out free online resources and courses available to gain knowledge on climate change, improve your decision making and create a better world! There are also online calculators that let you examine the impact you are having on the environment which allow you to then make decisions on how you can reduce your individual footprint.
3. Invest beyond personal financial gain
Not all returns are financial. Some investment options prioritise social and/or environmental positive impacts. Many companies will provide details of both their financial returns and the way they contribute to the community and the natural environment.
In addition to for profit company investing, there are growing numbers of not-for-profit and social enterprises seeking support. Although these investments are separate from retirement planning, being involved in endeavours that promote benefits beyond ourselves can create value in our lives.
In fact, a Harvard Business School research found that significantly greater happiness is experienced by those who spend on others, despite most of us believing that personal spending will make us happier. By aligning our investments with our values, we can simultaneously improve our personal levels of happiness while shaping a better world.
How? Check out local charities and community initiatives that address a critical need and align with your values. Set up a monthly donation or volunteer your time! Research has found that even the smallest of deviations in spending can make all the difference.
Let's change our world.
