2020-2030 has been declared the Decade of Action for achieving the UN SDGs and the 2030 targets. It is time now to achieve a just and sustainable world. Most of the SDG targets are oriented to the government and corporate players on the global stage, but what about us? What about the everyday actions of everyday people? Collective action works; if we all participate in advocating and enacting change (alongside corporate and government action), we can meet the 2030 targets and secure a better future. Being a conscious consumer is no longer enough; we must vote with our dollars on a bigger and broader scale. To vote with your dollars is recognizing how your purchases and financial spending influence the economic landscape. That is to say, who does and doesn’t get your money is important. We’ve had the marching activists, then came the digital activists — time for the age of the financial activist.
This article will take you through 10 tools to be an influential financial activist. Some are concepts you may be familiar with, while others may be completely new. Each works to reduce your negative impact or increase your positive impact in social, environmental, and humanitarian spheres. This can speak to a broad audience, and so some tools may be more or less accessible and powerful in your life. Nevertheless, let us say it loud and clear from the start, investing is the smartest tool in a financial activist’s belt. By shifting our money where it matters most for corporations (their bottom line), we can drive systemic change from the inside out.
10 Tools of Financial Activism
- Swap and borrow
- Buy ethical
- Financial Literacy
- Ethical Banking
- Shareholder Advocacy
Donate to causes you care about to generate change. It is a straightforward form of voting with your dollars as it gets your money straight to the places you want it. However, don’t donate blindly; make sure you know where you are donating and the impact it will have. Find out all the details. What are they fundraising for? How will the money be disseminated? Are they successful at what they claim to do? Before donating, use websites like Charity Navigator to scout out the organization and see how it spends its money. The larger the donation, the more information you want to get about where it is going. Unless you state how you wish the money to be spent, the charity is free to use your donation how they see fit.
2. Swap and Borrow
Reduce your environmental impact by removing yourself from the trade of consumerism. Research in the Journal of Industrial Ecology suggests that approximately 60% of global greenhouse gas emissions come from household consumption and the processes associated with manufacturing and transporting these products. Opting out of consumerism is not the answer to everything, nor is it entirely possible, but to help address overconsumption, the swap and borrow method is excellent! Consider borrowing from a friend, neighbor, or colleague if you need something just once or twice or wish to try it before buying. Lend your items out, too; sharing is caring! One friend may have a drill, another a sewing machine, and another has a hotdog costume – between them, they have access to 3 items at the expense of 1. You can trade with your time, too, if you don’t want to give things away or need something in return. Timebanking works well in small communities and often is done unofficially between friends in the form of “favors”. This could be credit for an hour baking a birthday cake that you later redeem for 1-hour fence painting. Trading skills can increase positive social impact and reduce demand for one-time-use products.
There’s enough clothing on the planet already for everyone on it. Some argue that the second-hand clothing industry exists because of our global consumption problems. Purchasing an item already in circulation helps prevent it from ending up in a landfill and reduces your contribution to the company it was manufactured by. The working conditions of garment factories are notoriously poor. While charities like Labour Behind The Label are doing incredible work to get justice for garment workers, purchasing second-hand clothes avoids your dollars funding sweatshops as items are already off the original market shelf. Pre-loved is also great for when you’re on a budget – ignore the trendy “vintage” or “thrift” stores that have been given a hipster makeover and head for places like Goodwill, Depop, Facebook marketplace, and charity stores that are a bit more rustic. Spending in charity stores doesn’t just mean your dollars avoid unethical companies but actually go somewhere doing good. When you have items to spare or move on, you can donate them too.
4. Buy Ethical
We can be socially and environmentally responsible consumers every day by addressing our shopping list. Buy from ethical businesses, purchase locally and shop with co-operatives where possible. Spend money on products put out by businesses that demonstrate their brand values through their production practices. Suppose a company says it is LGBTQ+ friendly but donates to charities that fund conversion therapy. Does that align with your values? If a company supports BIPOC equality but has an all-white board of governors, does that align with your values? There are so many ways to buy ethically. It all depends on what you prioritize: fair trade, zero-waste, plastic-free, vegan, animal cruelty-free, local-owned, sustainably sourced, and repurposed. Some of these things impact globally (fair trade) while others have closer proximity impacts (local-owned); all have the power to make a change. Spend intentionally to vote with your dollars actively.
Voting with your dollars is just as much about where you don’t put your dollars as where you do. Send companies you disagree with a message by removing your subscription or refusing to buy their products and send a letter explaining why. Suppose data collection on their end suggests that the top reason people leave is ethics-related. In that case, this makes it clear what changes they need to make to continue customer engagement. Be loud about who you are boycotting; often, a boycott can be a bigger threat in terms of reputation than in terms of money. But remember, be aware of the parent company and whether the alternatives are still owned by the same parent company. Perhaps even boycott in your career: who is paying your bills? Refuse to work for companies that don’t align with your values. Make it part of the job search phase to check the sustainability policy or the diversity and inclusion schemes. Quitting your job or avoiding industries is not the most accessible for everyone, and maybe you’ve finally achieved your dream job, but instead, you could participate in unions and strikes and make an impact that way. Stage a walkout and boycott your employers for a day to demand change. Work is a financial transaction and, therefore, has financial power.
Take your boycott to an even larger scale and remove yourself from entire industries causing social, environmental, and humanitarian harm. By clearing up your investments, you make it clear that you are serious about your future and can make waves in reducing your negative impact. You can divest in multiple ways, including your investment portfolio and retirement plant, but what you divest from is also key. The biggest divestment movement of today is fossil fuels, but there is growing momentum for divestment from the arms trade, civilian arms, and private prisons. It’s all about where you want your dollars to go. Divestment immediately freezes, and new ties are being made between your dollars and that industry directly. If you want to show your commitment, you can also join the individual pledge at DivestInvest. Additionally, see how you can participate in the divestment movement by supporting NGOs and other initiatives that put pressure on policymakers.
7. Financial Literacy
Know what’s what. How does the world of money work, and how does our money work in the world? Increasing your financial literacy and of those around you is vital to understand what voting with your dollars can mean on a meta-scale. It can start with effective money management and setting SMART financial goals but can also move on to include understanding where your pension goes and the difference between a savings account and an investment account. It’s time to start talking about money. The taboo around money keeps us from talking about wealth gaps, reinforces privilege, and limits the scope of your financial activism. At FLIT Invest, we are deeply passionate about financial literacy. You may find many of our previous blog posts helpful: How to Budget Like a Pro, What is a rainy-day fund and why do you need one?, How to Set Your Financial Goals. Be sure to check those out to position yourself in the best place to start casting big votes with your dollars!
8. Ethical Banking
By choosing an ethical bank, you are part of collective enabling banks to fund projects that benefit society and the environment and avoid funding industries you don’t agree with, like fossil fuels, arms trade, or mass incarceration. Our decisions on banking, pensions, savings, and investments can also drive positive change. We need to move to a model where making money is also creating value for people and the planet in our direct dollar votes but also indirect. Refer to the Global Alliance for Banking on Values for reputable banking societies. Alternatively, opt for community banking. This is particularly good for serving social justice issues. Smaller community banks may provide financing to those marginalized communities bypassed by the big banks but require capital to do so. You can also check your bank account’s rating at Rainforest Action Network. Some of the world’s most prominent financial institutions have been key financiers of fossil fuel projects, yet their customers have no idea! This is your opportunity to “store” your money in a place that will do good on your behalf.
9. Shareholder Advocacy
Take a seat at the table and make changes by being a shareholder. To be a shareholder is to own a piece of a company, even though that piece may be small. It is an opportunity to engage with an organization to promote practices you value. Taking action through shareholder positions can take two forms. The first is to get on the board of a company you disagree with and change from the inside out. Second, if you already hold a position as a shareholder, you can advocate for others. The first one is an intense process and is considered a great success if achieved (see climate activists on Exxon’s board). The second involves those holding board positions recognizing their power and providing allyship to social justice causes, whether voting for BIPOC C-suite positions or proposing sustainable in-house practices. This impact can be significant in the right places.
For the long term, wide-scale, and high-impact financial activism, investing is the way. There is a number of ways to invest sustainably (see What is Sustainable Investing? for a thorough breakdown). Part of impact investing is avoiding companies that don’t represent your values and supporting companies that do (negative screening). The flip side is investing in funds that are performing well according to specific frameworks (positive screening/ESG). To achieve this, financial institutions must be transparent about the projects they fund, and you must be careful with greenwashed funds. This is where your financial literacy will come in handy! Ethical investing has a range of techniques, each with its strengths and weaknesses, but impact investing is the future. It is very specific and targets selected issues often aligning with the UN Sustainable Development Goals, such as Gender Equality, Climate Action, No Poverty, and Zero Hunger. Start investing now; it’s time for the age of financial activism!
And what about FLIT Invest? We know that voting with your dollars through your investments is a powerful tool. We also know that investing can be overwhelming, let alone trying to do it sustainably! We’ve built an easy-to-use automated impact investing app for all investors. Tell us your financial goals and the causes you care about, like Climate Solutions or Gender Equality, and the industries you’d like to avoid, like Fossil Fuels or the Private Prison Industry. We’ll create and manage a portfolio customized for you and your values. The best part is that you don’t have to sacrifice financial returns to do well and do good. Make an impact today with your dollars and join the community of financial activists holding companies accountable for their actions.
Footnote 1: Content is for informational and educational purposes only. Any views, strategies or products discussed may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. The information contained herein should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing.