How To Green Your FinancesOct 16, 2021
I see you out there, using your business for good! Sharing valuable information, working with brands that align with your values, and using your platform for impact. Did you know that you can also bring your finances into better alignment with your values? Read on for some tips on how to ‘green your finances’.
Choosing Your Bank Account
When choosing your business bank account there are many things to consider, such as integration with other tech, funds availability, ability to make transfers, location, and customer service. It’s important to assess these by priority. For example, if you live or travel abroad frequently, foreign transaction fees and ability to transfer to any foreign accounts is likely going to take highest priority.
As you’re making your list of what’s important to you in a bank, having one that better aligns with your values socially and environmentally could be a high priority. If that’s true for you there are some resources included here to aid you in your research.
If you find that none of the “green” bank options fits your other priorities, another option would be to run your day-to-day transactions through the bank that most closely fits your needs and then have a business or personal savings account with the value-aligned bank where you keep most of your funds.
Green America has provided a directory of socially responsible bank options which you can find HERE.
Bank of the West prides itself in having the “strongest environmental policies of any major US bank”. They primarily work with customers in, you guessed it, the west. But they do have some options available for businesses around the country. You can learn more at their site HERE.
Amalgamated Bank is another one that “supports sustainable organizations, progressive causes, and social justice”. They are run on renewable energy and they focus on providing support for underprivileged communities. You can find out more about them HERE.
There are thankfully many more and if you have any that you would like to share I would love to learn about them.
Allocating Investment Funds
Your typical retirement account is placed in an advisor directed fund that is allocated based on risk tolerance and growth goals and is then set on autopilot. Most people don’t know what funds they are invested in as long as they are getting a good return. But thankfully there are investment groups that are now giving you the option to choose ESG Funds (further explained below). This can be more difficult through an employer run 401(K) but being self-employed affords you many more options.
One of my favorite options is a company called Ellevest. They offer traditional, Roth and SEP IRA’s and you have the option to allocate a substantial portion of your funds to ESG Funds. Their site can be found HERE.
If you have a self-directed IRA here are some resources for researching socially responsible funds that are available.
So what are ESG Funds? These are funds that have focused on Environmental, Social and Governance factors. Environmental refers to the companies’ policies around natural resource conservation, waste, energy usage, animal testing, fossil fuel consumption, and others. Social refers to how the companies treat people from their employees to customers to their community. Does the company walk the talk and work with businesses with the same values? Governance refers essentially to the companies’ integrity. Do they use ethical practices, is there corruption in their board of directors, do they use political contributions to sway decisions?
Committing a % of Sales to Charity
One of the most direct ways that you can use your finances for good is to contribute a % of sales to the charity of your choice. This is the surest way to know where your funds are going and doesn’t involve changing your bank or retirement accounts if you are already established with an institution.
Donations can of course be made directly or you can join organizations that support businesses making an impact. One of my personal favorites is 1% for the Planet. This is an organization that was created by Yvon Chouinard, founder of Patagonia, and Craig Matthews, founder of Blue Ribbon Flies. They realized they had a responsibility to protect the environment that they cared so much about and they knew that more could be accomplished together. On the organization’s site you can join the individual and/or business membership or you can donate directly to high-impact environmental not-for-profits. Through the membership you commit to giving 1% of sales to approved organizations and you become part of an amazing community. Visit their site HERE and if you’re interested in learning more or hearing my experience in joining please reach out any time!