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We all have big, aspirational financial goals. You might also feel connected to your personal environmental responsibility. From owning a vacation home to traveling the world, some of your long-term goals may feel at odds with your commitment to reduce your carbon footprint. Even the way you save for retirement could indirectly affect the earth. Fortunately, there are ways to balance lofty financial goals while minimizing the environmental impact. Let's explore how.
Owning Large or Multiple Properties
Homeownership can take many forms. You may want your primary residence to be a large home that you and your family can grow in. Others might have their sights set on a vacation home or investment property.
However, having an additional home increases your carbon footprint. New construction may be especially problematic in terms of greenhouse gas emissions. Constructing a new house likely emits 15 to 100 tons of carbon dioxide, according to the Massachusetts Institute of Technology. If demolition is involved, that can cause additional pollution and waste.
Larger homes also tend to use more energy. Because traditional power plants burn fossil fuels that release greenhouse gases, reducing energy usage is an important part of combating climate change.
How to Own Property and Be Environmentally Responsible
It's possible to make your real estate investing dream a reality in a more environmentally friendly way.
- Consider downsizing. Some folks may opt for a second home that's smaller than their primary residence, or vice versa. This allows them to enjoy the benefits of owning multiple properties while minimizing their carbon footprint.
- Invest in energy efficiency. Renewable energy systems provide natural sources of electricity. That can include a mix of solar and wind technology. Beyond that, a home's insulation, appliances, lighting choices, windows and thermostats can all affect energy usage.
Traveling Frequently
If traveling the world is on your bucket list, you might feel conflicted about the environmental impact. According to the Environmental Protection Agency, commercial planes and large business jets account for 10% of all U.S. transportation greenhouse gas emissions—and 3% of total U.S. greenhouse gas emissions. Air travel aside, tourism can affect local ecosystems. Hotels and resorts can deplete natural resources and contribute to the degradation of land and wildlife. More travelers moving in and out also means more waste, pollution and energy consumption.
How to Travel and Be Environmentally Responsible
Here are some ways you can enjoy your travel experiences while doing your part to protect the environment.
- Plan longer trips. Frequent back-and-forth flying and driving translates to more carbon dioxide emissions. Taking longer trips can help minimize these effects.
- Look for eco-friendly certifications. You'll see this designation on tourism products that prioritize the environment. That can include tours, attractions and lodging. Australia's certified tourism products, for example, are committed to sustainability and focus on nature-based tourism. Google also puts an eco-certified label on hotels that meet certain sustainability standards.
- Seek out an eco-conscious travel agent or booking site. If you go with a travel company that has B-corp certification, that means they demonstrate a commitment to the environment, local communities and their employees. That goes hand in hand with sustainable tourism.
- Be mindful when you get to your destination. Travelers can plan activities that involve walking, biking or public transportation, instead of renting a private car.
Growing Your Wealth Through Investing
Investing is often a core part of saving for retirement and increasing your net worth. You might avoid buying individual stocks from companies that exploit the earth—but it's still possible to invest in larger funds that support environmentally reckless companies.
Mutual funds and exchange-traded funds (ETFs), for example, allow investors to buy baskets of investments with a single trade. That's good for diversification, and it's also considered a less risky way to invest in stocks, but mindful investors will want to pay close attention to their holdings.
How to Invest and Be Environmentally Responsible
If environmental sustainability is important to you, ESG investing may be a good option. It allows investors to buy into eco-conscious companies that also offer potential financial returns. Think of it as values-led investing. You might zero in on companies with renewable energy programs, climate-friendly practices or responsible waste production initiatives. Many brokerage firms offer access to ESG mutual funds, ETFs and individual stocks.
The Bottom Line
You don't have to choose between your long-term financial goals and environmental sustainability. There are ways to check items off your bucket list while being mindful of your carbon footprint. If your goals feel out of alignment with what's best for the earth, ask yourself if there are any compromises you can make—some may be surprisingly simple.
The good news is that managing your credit health won't put the environment at risk. A crucial step is staying on top of the information on your credit report. Free credit monitoring with Experian makes that part easy.