Last updated: March 2017
Your Guide to Personal Carbon Divestment
Become a pioneer in the fast developing post-carbon economy.
This guide includes carbon divested options for:
With climate change posing a clear and present danger to the health of the planet, we need to take all possible action to avert climate catastrophe.
Our new campaign focuses on switching your current accounts, savings accounts, cash ISAs and investment funds away from companies still funding fossil fuel projects. To make maximum impact, switching into accounts which actively support new renewable energy projects is best.
The good news is that ditching those that support the fossil fuel industry and switching to positive alternatives has never been easier.
Below we list some of the most innovative institutions actively working in the transition away from a fossil-fuel economy.
Divesting your savings accounts and cash ISAs
For those looking to switch a savings account or cash ISA there are three banks that actively invest in renewables:
Triodos has ethical investment policies that support low-carbon initiatives, and publicly disclose their investments – a great practice for a sector that is resistant to openness and accountability.
Triodos offers financial services to a range of projects including organic food and farming businesses, renewable energy enterprises, recycling companies and nature conservation projects.
Charity Bank also has ethical investment policies, and publicly disclose their investments in an annual ‘loan portfolio report’ which, in 2015, included a couple of renewable energy projects.
Charity Bank only lent to charities, social enterprises and organisations with a charitable purpose, and stated that it conducted a social impact assessment for each loan.
Ecology Building Society
Ecology Building Society focuses its lending on projects that offer the greatest gains in terms of carbon reductions and environmental impact, with its ethical lending policy prioritising: sustainable housing practices, sustainable lifestyles, sustainable economic activity, and other ecologically positive projects and ventures.
Ecology offer a range of savings accounts but its cash ISAs are only currently available to “individuals who were members of the Building Society on 25 September 2015 and have not ceased being a member since this date.”
Other building societies and mutuals
For more widely available savings accounts and cash ISAs we recommend Nationwide Building Society. It is a mutual (a type of co-operative) and invests in housing stock rather than fossil fuels.
Visit our guide to savings accounts >
Visit our guide to cash ISAs >
Divesting your current account
Only the Co-operative Bank states its support for renewable energy organisations alongside a commitment not to provide banking services to the fossil fuel industry.
It has, however, recently sold many of its renewable-energy assets to raise cash, and does not control the hedgefund investments of some of its owners.
No building societies offering current accounts are making a point of supporting renewable energy, but neither do they invest in fossil fuels.
The two national building societies, Nationwide and the Norwich & Peterborough, also offer current accounts and avoid investing your money in the most controversial business areas. You may have a local building society too.
Visit our guide to current accounts >
Divesting your investment funds
FP WHEB Sustainability fund
FP WHEB invests specifically in environmental technologies such as renewable energy, and we could find very few investments worthy of criticism.
Alliance Trust Sustainable Future European Growth fund
Alliance Trust Sustainable Future European Growth is fully carbon divested. It discloses its full list of investments, and the company avoided being marked down for many of the things which afflicted the others.
Many individuals choose to invest in ethical funds via an independent financial advisor (IFA). See our guide to ethical IFAs.
Visit our guide to divested funds >
Divest your direct investments
Direct ethical investments allow individuals to create change by playing a part in supporting, often smaller, environmental or social projects. Investments normally take the form of loans or shares of some type, and there is always a risk that you may lose the whole of your investment if the project fails. It is advisable that you seek financial advice before making a large investment.
ETHEX, the positive investments website, collates and lists most of the best positive investment opportunities that come up in the UK.
In May 2016, for example, it listed nine renewables projects of which seven were solar arrays and two were hydro schemes. Although it covers more than renewables and looks at savings as well as investments, renewables have been where the bulk of its work has been to date.
One of its great virtues is that that it provides a ‘health check’ of projects before they appear on the site – thus removing extremely risky ones from the mix.
Minimum investment varies from £1 to £2000 depending on which project you invest in, and you can sometimes pay online.
Abundance Investment specialises in Uk based renewable energy projects and was the first crowd-funding platform to be regulated by the FCA. Individuals are able to deposit money online and then invest in specific projects according to their preferences. Abundance has recently launched the ability to hold Abundance investments in a Self-Invested Personal Pension (SIPP) and investors
can apparently view how much electricity their projects are generating, depending on how windy or sunny it is. Investors from anywhere in Europe can invest in Abundance projects, and you can invest as little as £5 and can complete all transactions online.
Energy4All is a not-for-profit social enterprise dedicated to expanding the number of renewable energy co-operatives within the UK. It is different from the other schemes, in that it is owned by the co-operatives it assists and is a vehicle for them to offer mutual support to each other. It lists current share offers on its website for ethical investors.
Sharenergy is a not-for-profit organisation that helps communities find, build and own renewable energy generation throughout the UK. The website also advertises share offerings for community renewable energy schemes.
Repowering London helps develop community (solar) energy projects in London, periodically listing on its website those that are seeking funding from ethical investors.
There are 4 basic (sometimes overlapping) options for pensions, and there is usually an ethical pathway in each.
Some options are more ethically sound than others and none are without their own risks in what is a very complicated sector.
Perhaps more than with any other type of investment you should consult a financial adviser before taking out any type of pension or moving your money around pension schemes.
1. Many people are already in an occupational pension scheme. These tend to be very traditional in their investment strategies and heavily invested in fossil fuels. However, most financial advisers are agreed that, if you are lucky enough to be in one of these, staying put makes financial sense.
Shareaction is among a number of groups that can help you lobby your fund manager for carbon divestment.
2. Most employees in the UK who are not already in a pension scheme will be auto-enrolled into a scheme in the next two years, thanks to a new government scheme.
Ethical Consumer has worked with the ethical financial advisory group Castlefield to set up a carbon divested auto-enrolment pension scheme suitable for smaller organisations.
The scheme is administered by the Aviva Group and is tied to the Alliance Trust Sustainable European Growth fund.
The Alliance Trust Sustainable European Growth fund was our recent Best Buy for fully carbon divested investment funds. It discloses its full list of investments, it does not appear to engage in tax avoidance, and it does not invest in nuclear weapons. We awarded it an Ethiscore of 9.
Also Aviva came top of Shareaction’s recent ethical ranking of auto-enrolment pension providers. It was the only provider which had committed to measure and disclose the greenhouse gas emissions of its entire investment portfolio.
This option may also work for some larger organisations as well.
3. You could also have a ‘private fund’ or personal pension (SIPP) as well as either or both of the above, but if you are not an experienced investor it is always better to speak to a financial advisor first before you do this. A SIPP can be linked to an existing ethical investment fund or even to a carbon-divested fund. For example Abundance investments has also been working in this area with renewable energy projects and there are others mentioned above.
4. You could also try 'off-piste' saving - bundling a number of different options, such as property, direct investments and ISAs (as mentioned above) - but this comes with more risk. Financial experts are divided on the issue, but many say that property investments alongside ISAs will give you greater options in retirement. If ethically managed, this could be an attractive ethical option too but you should always work with an ethical financial advisor to get the best arrangement for you.
Getting financial advice
Whilst direct investments may have the strongest ethical credentials, they do carry with them the risk of losing your money if the project fails. They are therefore generally for people who already have a safety net of savings in place.
We often quote the Consumers’ Association’s advice. Before investing they suggest:
Paying off debt first; Getting life and sickness insurance; Sorting out a retirement plan or pension; Having at least three months’ salary as savings in cash for emergencies.
If investing large sums, it may be worth contacting an ethical Independent Financial Advisor.
More on divestment campaigns
Campaigning around collectively-held assets – such as shares held by universities and local authorities - continues to remain at the core of the divestment movement up to this point.
350.org – a US campaign group founded by university students and author Bill McKibben in 2008 – lies at the centre of this movement.
In May 2016, 350.org claimed that over $3.4 trillion has been divested from the fossil fuel industry and listed 518 formally divested institutions around the world. These include the Church of England, the University of Edinburgh, the British Medical Association and WWF-UK.
For more on the UK divestment campaign see the Go Fossil Free UK hub page.
Divest/Invest.org is US website where divestment supporters can add their names to a list of others who have pledged to divest.
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