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3 Nov 2021

COP26: 10 simple ways to make your money greener

Which? explains the steps you can take today to shrink your financial carbon footprint

Today is 'finance day' at COP26. World leaders gathered in Glasgow will be focused on the part the financial system can play in fighting the climate crisis.

But you don't need to wait for them if you want your money to make a difference right away. From changing your bank to taking control of your pension, there are several steps you can take today to shrink your financial carbon footprint.

Here, we round up 10 ways to make your money greener.

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1. Invest in a green savings bond

Launched by the government last month, NS&I's new Green Savings Bonds let you invest in environmentally friendly projects for a 0.65% AER return over three years.

You'll need to have £100 to open an account, and you can save up to £100,000 if you have bags of cash to spare.

As for what you'll actually be funding, the government says it's a mixture of six different kinds of green projects, including pollution prevention, improving energy efficiency, and switching to renewable energy.

Without more detail, it's hard for us to compare Green Savings Bonds to other established eco-friendly financial products, but the government has said it will publish more information in the future.

2. Try a different green savings account

Not sold on NS&I's green option? That's fine! You can take out a savings account with a bank or building society without harming the planet - as long as you do a little digging into its environmental policies.

Which? members have told us they find it hard to look up a bank's green credentials, so we had the experts at Ethical Consumer check them out for us.

Sustainable bank Triodos came top of the table, closely followed by Ecological Building Society and Nationwide Building Society.

3. Switch to a greener bank

You don't have to stop at a savings account. Your current account may be funding climate change without your knowledge. While your money sits in there, banks invest it in all sorts of things, including - in some cases - the fossil fuel industry.

Switching away from banks that do this could both reduce your carbon footprint and put pressure on the industry to change. And the best part is, it's easy. Banks that are part of the Current Account Switch Service allow you to switch accounts in just seven working days.

Listen:the Which? Investigates Podcast explores how your money could be contributing to climate change.

4. Decarbonise your pension

People forget that their pension savings are an investment - likely the biggest one most of us will ever make. But what are they invested in?

As with current accounts, there could well be some less-than-ethical projects in your pension portfolio without you even knowing it. The whole workplace pension system - where you and your employer contribute to a company pension plan - is pretty opaque. It's easy to let it build up in the background. But you don't have to.

There are now more than 200 pension funds labelled ethical or sustainable, each spreading investors' money across hundreds or thousands of companies. An ethical fund will have policies determining what sort of assets it won't buy (such as coal), will buy (such as solar panels) and, in some cases, how much it will invest in certain sectors.

If you want to change yours, speak to your employer. You might be able to move it to a more ethical plan. Or if you have a self-invested pension plan (Sipp), you can take more control of it yourself.

5. Get a green mortgage

Whether you're buying your first home or remortgaging, it's worth exploring if you could save money by making your home more eco-friendly.

Increasingly popular 'green mortgages' may give you a cheaper rate, or in some cases offer cashback, for buying an energy-efficient home, or making green home improvements to your current property.

7. Purchase Which? Eco Buys

We've been reviewing products for decades here at Which? And this year, we were proud to launch our Which? Eco Buy label, awarded to products that meet our sustainability criteria.

So far, we've given Eco Buy status to selected dishwashers, fridges, kettles, and, of course, washing machines. So next time you're in the market for one of these, you know where to look.

8. Switch to a Which? Eco Provider

You thought we'd stop at Eco Buys? We recently revealed our first Which? Eco Providers: energy firms with the most sustainable practices.

Three firms made the cut: Good Energy, GEUK and Ecotricity. Switching to one of these will give your monthly bills a greener tinge.

You can read more about how we choose our Eco Providers here: Which? reveals new energy Eco Providers.

9. Get a free heat pump (if it's right for your home)

You can get a government grant of up to £5,000 to replace your gas boiler with a low-carbon heat pump. Sounds great, right? Well, it's not that straightforward.

We'd start by saying that heat pumps won't work well in all homes. You'll need outside space to install the pump and inside space for a water tank. And you'll get the best results if your home's already energy-efficient, which many UK houses aren't.

Then, there's the matter of whether your boiler needs replacing. It may be fairly efficient already, in which case you can replace it when it finally stops working.

In some cases, you might be better off following our next point...

10. Make your home more efficient

Improving your home's energy efficiency, perhaps by getting better insulation, is one way to cut down your heating bill and your environmental impact.

There are several ways you can do this, from adding loft insulation to upgrading doors and windows. It's all in our helpful guide.