Guest Blog by Timothy Yee, President of Green Retirement, Inc and Gregory Wendt, a Certified Financial Planner and Director and Senior Wealth Advisor at Stakeholders Capital

Third Act launched its Banking on our Future Campaign to pressure the financial system, especially the big four banks (Chase, Wells Fargo, Bank of America, and CitiBank), to stop financing climate destruction.

The Carbon Bankroll report by Bank Forward makes clear that the biggest environmental decision we make is where we choose to keep and invest our money. How our money and cash are used by big banks has a far greater impact on climate emissions than what kind of car we drive, for example.

Third Act wants the banks to know that if they don’t move their money out of fossil fuels, then we’ll move our money away from them. You can sign the Banking on our Future Pledge to add your voice to the thousands that are already calling for change!

In response to Third Actors’ numerous questions about “how to move your money,” Third Act invited us, Timothy Yee and Gregory Wendt, to help design a 4-part webinar series around Responsible Finance. With decades of experience in sustainable investing and financial and retirement planning, we are pleased to share our approaches to working with clients to develop personal Responsible Finance Plans. At each event, you will hear from certified financial advisors, bank and personal finance experts, experts on investment and retirement, and advocacy experts that are  leading campaigns to reform the financial system. You’ll learn both practical approaches and big-picture strategies to help you design your personal Responsible Financial Plan. The goal is to provide you with some resources that allow you to make choices that are good for you and good for the planet, while also seeking good financial performance.

To help you better understand how to get started, in this blog we provide:

  • Key questions to ask yourself and a worksheet to assist you with identifying your values, priorities, needs, and challenges;
  • An introduction to personal financial levers – personal banking, personal investing, and corporate and non-profit retirement plans – that we will explore more deeply in upcoming webinars; and
  • Additional reading and resources, including how to find a financial advisor with expertise in sustainable investing.

This blog accompanies the first webinar in the series: Responsible Finance: An overview of how to align your money with your values. You can access a recording of our first webinar here. Subsequent webinars will cover personal banking (checking and savings accounts and credit cards), investing, and corporate and non-profit retirement plans.

1.  Articulate Your Values, Needs, and Challenges

While it is tempting to immediately dive into practical solutions and changes in each of the primary areas of personal finance levers (banks and credit cards, investments, retirement plans), it is a vital and foundational step to first identify your values and what is most important to you. Typically, when we first meet a new client it may take 3-4 meetings with interview questions and discussion to articulate your values, your financial priorities, your risk tolerance, and more. There’s no easy “one-click” answer. Financial advisors may also use a scenario planning model to assess whether your financial plans and investment strategies will achieve your financial goals.

The first question to ask yourself is: What do I have and what are my priorities and needs for my money over the years to come? 

We recognize that that is a massive question, so we broke it down into smaller questions, listed below, in hopes that you will take some time to reflect, journal, and discuss your answers with your loved ones and financial advisors:

  • What is your view of a better world?
  • What are your priority interests and concerns (climate, prison reform, human rights, etc..)
  • What inspires you to make the world a better place?
  • Beyond wealth and financial solutions, where do you spend your time serving others?
  • What is the way you want to invest your time and energy in the most important relationships?
  • What are the organizations or groups you admire the most?
  • What do you see in your community and your world that you want to help or support?

This is not an esoteric or philosophical exercise but rather an important way for you to be able to evaluate financial solutions, be they banks, investment funds, or individual companies. These questions are clues to discovering more about what is most important to you and to find the themes where you want your dollars to help the world.

In addition to these questions about values, it is helpful to do a short inventory and analysis of your various financial services, advisors, and accounts. You can evaluate the benefits and challenges of switching your money away from an advisor or financial institution that doesn’t match your values and towards one that is a better match, as well as evaluate tradeoffs.

You can download and adapt this simple table template to help you compare the pros and cons  of making the switch.  It will be helpful if you complete this table before the next webinar on better banks and credit cards, investments, and retirement funds.

Note: We have given some hypothetical examples of accounts or services and reasons you may be “For” or “Against” switching. If you want to use our Table Template, go to File > Make a Copy and then save this file on your own computer or Google drive to edit the file with your own personal evaluations, questions, ideas, and concerns.

2. An Introduction to Your Personal Financial Levers

Green America – a Third Act partner organization that has been working on sustainable finance for decades – has a wonderful Guide to Socially Responsible Investing and Better Banking (2021). This Guide provides a great orientation around the key levers of personal finance – better banks, investing, retirement, and shareholder activism. Green America also certifies banks, credit unions, and credit cards that meet their environmental and social justice criteria. However, Third Act requests that you do not yet close your bank or credit card accounts until we announce our collective day of action so we can have a greater impact together.

A. Personal banking

Do you know where your money sleeps at night? In other words, where is your bank investing the money you have deposited with them and the profits earned from your credit cards? It’s important that you ask your bank directly about their investments and how they use your money (learn more about how to write a letter to your bank here and here), as well as your financial advisors and doing your own research on your issues of concern.

If combating climate change is important to you, the “Banking on Climate Chaos” report details which banks are financing fossil fuel companies and projects. You can investigate which banks are involved with modern-day redlining, an insidious practice started in the 1930s and continuing today where banking institutions discriminate against Black and Brown customers and home mortgage borrowers. If your bank’s commitment to racial diversity is important, you can research that here. The FAIRR Initiative evaluates the environmental and social impacts of the world’s largest livestock producer companies. You can do similar research around each of your priorities, and work to move your money away from banks that invest your money in ways that undermine your values.

Responsible Finance Webinar #2: Personal Banking (date to be announced soon) will include speakers who can help guide you to better banking solutions and credit card options and describe the steps needed to open new accounts.

In the meantime, you can start exploring other banks or local credit unions to see if they align with your values and/or can meet some or all your financial needs.. You can also look into one of the fossil-free credit cards from online banks. Note that it is unlikely that a single financial institution will meet all your needs. Please see pages 11-13 of Third Act’s Banking on our Future Toolkit for some tools to explore in advance of Webinar #2, including Green America’s map of certified banks and credit unions and a list of credit cards, Bank for Good’s searchable database, and Mighty Deposit’s database.

B. Personal Investing

The beauty of personal investing is that you have control over where your money is invested. Again, start with identifying your values. Next, ask your financial advisor directly if they (a) understand your values and priorities, and (b) can translate them into appropriate investments. Finally, evaluate your financial advisor’s responses.

If your advisor’s responses are not satisfactory – does not meet with “a” or meets “a” but not “b” – then you might need to find a new advisor. There are a few directories that can help you find an advisor knowledgeable about sustainable investing, including:

A simple way to start considering how to align your values with investment options, you can visit the Forum on Sustainable and Responsible Investment’s listing of Sustainable Investment Mutual Funds and ETFs chart and click on “screening and advocacy”. This website gives you an idea of some of the ways you can screen investments based on your values as well as a starter list of investments to consider.

Remember to evaluate any proposed investment for alignment with your values (i.e., how much financial risk you are willing to take, whether it matches your time horizon, and whether any underlying investments are OK with you). A financial advisor will also help you consider investment and mutual fund fees, tax implications, active versus passive strategies, index funds, and other considerations. Lastly, make sure that any investment you like is something your advisor can obtain.

Responsible Finance Webinar #3: Personal Investing (mid-November 2022, date to be announced soon) will include speakers who can help provide information about how to identify environmentally and socially responsible investment funds, as well as other investment approaches, such as impact investing, and advocacy efforts to influence funds and large asset managers.

C. Corporate and Non-profit Retirement Plans

What does your 401k really invest in? As You Sow provides information about Fossil Free Funds and lots of assessments of other funds at Invest Your Values, including tobacco, gender, deforestation, social justice, and weapons, to better help you understand the stock market based investments in your plan.

If the investments aren’t fully reflective of what you and/ or your employer believe in and value, you might consider this actions recommended by As You Sow here and here to help start an internal discussion at your workplace about making investment changes to retirement plans.

Be aware that this change can take a fair amount of time depending on the size of the plans and number of interested parties. At the same time, there is $39 trillion in retirement plans as of 12/31/21. Moving these assets can have a tremendous impact on the fight for a sustainable future. .

Responsible Finance Webinar #4: Retirement Plans (date in December to be announced soon) will include speakers who will help you dig into the 401K or 403B retirement options that you are invested in and show you alternative choices that align with your values.

About the authors:

Timothy Yee is the President of Green Retirement, Inc., a founding B-Corporation and a minority and woman-owned financial advisory firm. Timothy focuses on sustainable, responsible, and fossil-free investment options in corporate and nonprofit retirement plans. He serves as a fiduciary for his clients, among them 350.org and Trillium Asset Management.

Gregory Wendt is a Certified Financial Planner and veteran wealth advisor on capital markets, sustainability, and new economic thinking. He is currently Director and Senior Wealth Advisor at Stakeholders Capital, a Registered Investment Advisory Firm. Since the 1980s, Greg has worked in sustainable and regenerative economics, finance, portfolio management, economic strategy, and responsible investing, and is a leader in the evolving field of sustainable and responsible investing and green economy solutions. Greg can be reached at greg@stakeholderscapital.com.

Educate Yourself with Additional Reading

And for some more advanced learning:

Note: Third Act is legally prohibited from giving investment advice as we are not certified investment advisors. We have invited financial planning professionals to share their expertise. Please note that Third Act does not have any contractual relationships with the speakers and blog authors, and we are not endorsing their services. These are educational events and resources where we are sharing information for you to implement in your lives in ways that fit with your personal strategies, risk tolerance, and financial needs.

Ways to get involved

All the different ways you can get involved with Third Act: