Your money could have the power to make a positive impact on people and the planet.
Canstar’s Green Finance page is a place where you can find information about sustainable financial products – from banking to superannuation to investing.
Find out more about how you can go green with your finances.
What is sustainable finance?
Sustainable finance is when a bank, super fund, insurance provider or other financial institution takes into account environmental, social and governance (ESG) considerations when making business or investment decisions.
Here’s what each factor typically involves:
Environmental – consideration of the environment, which may include addressing issues such as climate change and pollution.
Social – consideration of people, which may involve issues such as human rights and diversity.
Governance – consideration of how the company is run, which may cover issues such as the management structure of the company and how much executives are paid.
Why is sustainable finance important?
Financial institutions have the ability to lend to and invest in businesses that are generally seen as harmful to people and the planet, like fossil fuel companies. But on the flipside, they can also invest in businesses that are doing good in the world, like renewable energy companies. Sustainable finance involves a financial institution aiming to minimise its negative impacts and/or to encourage positive ones.
Consumers can play a role too, such as by making conscious decisions about where their money is invested and what it is being used for, whether that’s with their bank, super fund or other investment product provider.
What is ethical investing?
Ethical investing is about investing in line with your ethics and values, rather than focussing purely on monetary returns. It’s sometimes referred to as responsible investing or sustainable investing.
There are a number of different ways you can invest ethically. For example, you may use negative screening. This involves checking where your money is likely to go by looking up the investment disclosure materials of any financial institutions you’re considering, and excluding those that invest in industries that you don’t agree with. Some common examples of industries or practices subject to negative screening include fossil fuels, tobacco, weapons and animal testing.
You might also use positive screening and actively invest in industries or companies that you think are making a positive difference in areas that matter to you. For example, these could include renewables, education, health care and affordable housing.
Latest in Green Finance
Last updated: 22/07/2021
About Tamika Seeto
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