Looking forward: setting sustainable 2022 resolutions

There are dozens of keywords and definitions when it comes to responsible investing, but at the heart of it all is our shared dedication to making an impact with our money. To me, this goes hand in hand with a very timely concept: new year's resolutions. Today, I want to talk about how you can combine sustainability with your resolutions to have a positive impact on both your personal, day-to-day life, and on the world around you. Joining me to discuss how you can start setting sustainable resolutions is the team from Clim8 Invest, an investment platform focused on sustainable growth and impact.

What does 2022 hold for sustainable investing?

As we look ahead to the new year, I've found it interesting to read what experts think will be the 'popular' aspects of sustainable investing in 2022. A couple that stood out to me included:

Focus on data and transparency

The first trend should come as no surprise to anyone, especially if you've kept up with past issues of Money's Impact - the need for greater transparency in this industry becomes more and more essential, especially on an individual investor level.

'When we say we only invest in the most climate-positive companies and funds, we don't want our investors to take our word for it. We want to actually show them where their money is going, as well as the impact they're having - which we do inside of our app.' - Ekaterina, Clim8 Invest

The good news is, it will become easier for you and I to know exactly where our priorities are invested, how they are performing, and what this means for our ESG goals and values. Clim8 Invest are particularly known for the transparency they provide with their investors, and they put this down to the fact that they 'want to empower investors by being open and transparent. This way, investors can become better informed about the incredibly complex world of climate solutions, as well as the scale of opportunity that is emerging in the markets today'.

Net-zero vs. Climate-positive

Throughout 2021, 'net-zero' goals have come under criticism, especially when used by companies who contribute large volumes of carbon emissions. The recent Emissions Gap Report, for example, found that updated Nationally Determined Contributions (known as NDCs) would currently only lead to 'an additional 7.5% reduction in annual greenhouse emissions by 2030'. Many of the targets outlined, according to the UNEP, are 'vague and inconsistent with most 2030 national commitments' - in other words, these 'net-zero' pledges are well-dressed, but ultimately empty, promises.

It is for this reason that experts are predicting the rise of climate-positive targets as an alternative. What this means is that instead of aiming for 'net-zero' (where the amount of greenhouse gases produced is balanced by the amount removed from the atmosphere), companies and organisations will go further, removing more carbon dioxide from the atmosphere than they may have produced.

How can you make an impact with your resolution?

I can't talk about setting new year's resolutions without mentioning that for many of us, they are short-lived. In fact, in 2020 just 26% of Brits managed to keep every resolution that they made, whilst 48% managed to keep 'some of them'. Whether your 2022 resolutions are related to your money or not, I thought I would share a couple of tips from the world of financial education, all about how you can try your best to actually keep and achieve your goals.

The first aspect of goal-setting is all about your mindset. If you set a target that you don't actually care about achieving, you're far less likely to put in the necessary effort to achieve it. Start by sitting down with a pen and paper, or even juts opening your notes app next time you're commuting somewhere, and think about past resolutions you've made. Which were the most successful? Were there any that you had given up with by the second week of January? Why do you think that was?

Once you've done the initial brain-dump of your thoughts, you can then begin to reflect on why certain goals were (or weren't) successful. Try and separate reasons from excuses, and focus on how you can solve these setbacks. For example, if your 2021 resolution was to stop buying single-use water bottles, a 'reason' for failing might be that you don't drink enough water as is, so when you do remember to hydrate, you go for the easiest option. Instead, you can pre-empt these problems. For example, you can make sure you're always carrying a reusable bottle, or try using apps such as Hydro Coach or WaterMinder, which send you reminders throughout the day. Taking 10 minutes to set up helpful actions for your resolutions makes you far more likely to stick to them when January 1st comes around.

One goal-setting tactic that I find super helpful in my own planning is the S.M.A.R.T method. When you're setting up your resolutions, ask yourself:

• Specific: is my goal clear, with outlined targets and actions?
• Measurable: how will I track my progress?
• Attainable: is this realistic to the time or energy I have available?
• Relevant: will this goal have a positive impact on my life right now? (For example, a common resolution is to travel more, but in the midst of a pandemic, is this the best goal to aim for?)
• Timely: how long will it take me to achieve this goal? How will I know I've achieved it?

The reason that I believe sustainability goes so well with setting up new year's resolutions is because, although planning S.M.A.R.T goals can help you to stick to them, one of the most powerful motivators is the feeling you get when you have achieved your target. Sustainable investing, and daily sustainable activities, prove that you having a positive impact on the world, and it is not selfish to appreciate and feel good about yourself for it. This all circles back to your mindset - the best way to have an impact with your resolutions is to consider how they can best impact you.

Setting sustainable new year's resolutions

How to have a personal impact

Type 'sustainable resolutions' into your search engine, and you're sure to find hundreds of activities and options. A couple popular habits which are fairly easy to implement and stick to include:

• Cutting down on single-use plastic
• Turning off tech devices, rather than leaving them on standby for long periods of time
• Switching to electronic bank statements
• Investing in multi-use products, such as beeswax instead of cling-film
• Start a compost bin and up your household recycling

I also made sure to ask the entire team at Clim8 Invest what their 2022 resolutions are, and many of them also want to make 'small, incremental changes rather than big, sweeping ones'. Their answers ranged from reducing the amount of plastic they use, to flying less, or buying more second-hand clothing. Ekaterina put it best when describing the opportunities available for making sustainable choices:

'There's a wealth of start-ups that are operating in the circular economy space right now, so we're really spoiled for choice when it comes to living more sustainably' - Ekaterina, Clim8 Invest

How to have a wide-scale impact

Asides from small, personal actions that you can incorporate into your daily life, there are also ways to introduce much bigger sustainable resolutions. If you don't already invest, for example, maybe this is the moment to begin - or, at least, to begin learning more about the process.

If you're new to investing, or maybe you didn't have a great experience the first time round, this is a great time to give it another go. Surrounded by the energy and motivation of friends and family who are also trying to achieve new goals and targets, you can begin to move on from the past, and focus on the future.

'It's understandable to feel wary if you've been burned by investing sustainably in the past', Ekaterina explained. 'Until recently, investors have really had to choose between their head and their heart - that is, between returns and climate impact. [Clim8 Invest] exists to show that you can have both'.

As Clim8 Invest explained, 'investment in climate positive companies is going through the roof, and the climate sector as a whole is set to grow by several orders of magnitude in the coming years, so now's the perfect time to start aligning your financial goals with your values'.

If you're already an investor, have a look into the shareholder reports which your portfolio has published. If you believe a company could be having more of an impact, consider your options for making your voice heard. Perhaps other investors have already raised these issues, and have already established an advocacy group which you can support.

Finally, you could make a resolution about how you want your own investment strategy to progress over the coming year. Maybe you currently invest in 60% sustainable and 40% unsustainable funds. Do you want to see different percentages by next December? How can you map out this journey to suit your needs and restrictions?

At the end of the day, your new year's resolutions are the perfect way to start 2022 off with a real impact. As Ekaterina summarised, 'January is the time when most people set strong intentions to live by their values. By investing sustainably, you kill two birds with one stone, by addressing your financial wellbeing as well as doing your bit to save the planet'.

Be sure to share your sustainable resolutions in the comments below, and let me know what you'd most love to see from Money's Impact in the new year!

• Article: PlanA Academy, 'What is the difference between carbon-neutral, net-zero, and climate positive?'
• Report: Sustainable Fintech, 'ESG Credit Trends 2022'

A huge thank you to Clim8 Invest for their contributions to today's issue of Money's Impact. You can visit their website to learn more here*

* With investing, your capital is at risk