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31 Dec 2020

10 simple ways to go green with your money in 2021

From switching your current account to insulating your home

Here are 10 things you could do with your money if you're keen to keep your carbon footprint low in the new year.

Your money, how you spend it and where you keep it often has a direct impact on the environment. That's true whether you're paying your monthly bills or paying into your pension.

You could be unwittingly funding everything from the development of renewable energy to the extraction of fossil fuels.

So if you're keen to make your money greener in 2021, the following steps can help you on your way.

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1. Switch to a greener bank

In November, we revealed that three quarters of Which? members don't know what their bank's climate change policy is. And it's no wonder, since our research also found that this information can be hard to find, with banks sometimes burying them in long annual reports.

If your bank lends to or invests in the fossil fuel sector, your money could be harming the planet even as it sits in your account. So if you're not happy with what your bank does with your money, switching to a greener option is one way to make a difference.

You could try an 'ethical bank' (more on those below), or simply pick a high street brand whose climate standards better align with yours. Ethical Consumer magazine's climate change impact ratings for banks could help you make a decision.

Co-op Bank, Nationwide Building Society and Which? recommended provider Starling Bank have all told us they don't lend to fossil fuel companies.

Read more about what your bank's doing about climate change here, and find out how to switch your current account here.

2. Open an 'ethical' bank account

A number of banks have ethics (not just the environment) as their main selling point. Triodos is perhaps the most well known of these - its business model is based around sustainability and it's completely transparent about where it invests customers' money.

Newcomer TreeCard has made waves for promising the world's first wooden debit card. It's due to launch in 2021 with 80% of profits pledged to go towards reforestation.

A possible downside of these banks is that they're often online only, meaning those who prefer visiting branches in person will miss out.

3. Make ethical investments

There are now more than 2,500 ethical investment funds on the market, with many showing encouraging returns.

Investing enables you to have far more choice over what your money goes to, with the possibility of much higher returns than on savings accounts - although, also the possibility of losing it all.

However, Which? Money research has found that ethical investing can be difficult, so it's worth doing your homework before you dive in.

At least seven different labels are used to describe ethical investment funds and greenwashing is prevalent in the sector. Our investigation into ethical investing can help you get to grips with going green.

4. Take control of your pension

You might not think you have any investments, but if you have a pension, you do. And it's not necessarily green.

Nest, the UK's biggest pension fund, began divesting from fossil fuels in July this year. But many pension funds still back the oil and gas industry.

If you're concerned that your pension could be damaging the environment, do what you can to take control of it. This could be through talking to your employer about your workplace pension and where it's being paid in to.

You could also set up a self invested pension plan (Sipp), which can give you more control over where your pension is invested.

5. Buy sustainable products

In November, we launched our Eco Buy label for products that will have a lower carbon footprint over their lifetime, alongside doing their main job well.

We've already chosen Eco Buys for dishwashers and washing machines, and we'll roll the badge out across other types of products in the new year.

Our current Eco Buys are all energy efficient, water efficient and easily repairable. That means if you buy them you won't just be keeping your carbon footprint to a minimum; you'll also be saving money in the long run by not having to buy frequent replacements.

6. Consider refurbished or second-hand electronics

Buying electronics used or refurbished is more sustainable and cheaper than buying them new, and it's a form of recycling in a way.

Our research on buying second-hand laptops found that the same MacBook Pro could cost £1,249 new, £1,049 refurbished or £850 second-hand - so you could save £400 just by not buying new.

7. Switch to a green energy deal

Switching to a renewable energy supplier should be a simple way to reduce your carbon emissions.

And by comparing deals, you could find a renewable tariff that's cheaper than your current deal, especially if you haven't switched in a while.

However, we've found some suppliers with renewable tariffs don't own or build any renewable energy generation (such as wind farms).

Our How green is your energy tariff?story from 2019 has a breakdown of how green different suppliers are.

8. Use the Green Homes Grant

Announced during one of Chancellor Rishi Sunak's many 2020 statements, the Green Homes Grant offers vouchers for up to £5,000 to go towards making your home more efficient.

It's valid for home improvements including insulation and low-carbon heating. The scheme was originally set to close in March 2021, but it's been extended to March 2022 after tens of thousands of people applied to use it.

9. Switch to a green broadband deal

You'll likely be needing a strong connection for Zoom calls well into the new year. Switching to a greener broadband provider is one way to do good with your monthly bill.

Ethical Consumer recommends GreenNet and Green ISP are two non-profit internet service providers which run on 100% renewable energy.

It's worth checking which providers cover your area to see if these, or other options from green companies, are available.

10. Get a green mortgage

New year, new mortgage? Whether you're buying a new home or switching away from your current lender, consider a 'green mortgage' in 2021.

A green mortgage will get you a lower rate for buying a more energy-efficient home. They're available from Barclays, Nationwide and NatWest.

With Barclays and NatWest, you can get a discount on their usual interest rate if you buy a home with a better EPC rating. Nationwide's green mortgage is for additional borrowing and you have to spend at least 50% of it on efficiency improvements to qualify.