How to Divest from Fossil Fuels and Fund a Greener Future
- Rachel Bailleau
- Jun 5
- 7 min read
If you care about climate change, where you put your money really matters. Divesting from fossil fuels isn’t just something for big institutions or finance experts. It’s something anyone can start doing, even with small savings or everyday choices. And the best part? Every step you take to move your money away from fossil fuels and toward cleaner, greener projects is like casting a vote for the kind of world you want to live in.
Let's explore some simple and impactful ways to take your money out of fossil fuels, while boosting your health and bank balance.
5 ways to divest from fossil fuels
1. Switch to an Ethical Bank
Most high street banks are still heavily funding fossil fuel projects. Between 2016 and 2023, the world’s 60 largest banks poured over 6.9 trillion dollars into fossil fuels. Bear with me.
Project Drawdown estimates that fully scaling existing climate solutions by 2050 would cost around 23 to 26 trillion dollars and could generate up to 145 trillion dollars in savings.
In other words, not only would solving the climate crisis save us an enormous amount of money in the long run, but we already have the money. If banks had redirected just their fossil fuel financing into climate solutions, nearly a third of the global investment needed to reverse climate change could already have been made. The financial resources are there. It is a question of priorities.
Ethical banks avoid funding fossil fuels, arms, and other harmful industries. Instead, they invest in renewable energy, community housing, organic farming, and social enterprises. Choosing where your money sleeps at night is one of the most powerful actions you can take in divesting from fossil fuels and investing in a more stable future for your loved ones.
If you're in the UK, you can consider:
Triodos Bank – Fully transparent about how your money is used. Funds only ethical, sustainable businesses and social projects.
The Co-operative Bank – Guided by a long-standing ethical policy that excludes fossil fuels, animal testing, arms trade, and more.
💡 Is Your Bank Funding the Climate Crisis? You can find out in seconds at bank.green, Just type in your bank’s name to see whether it funds fossil fuels and discover greener alternatives you can switch to today.
2. Check your pension fund
Where can we find the rest of the money to tackle climate change? Pension funds hold trillions globally, yet many still invest heavily in oil, gas, and coal.
According to Make My Money Matter, there’s over £3 trillion in pensions in the UK. That's a huge amount of money, and it belongs to ordinary people like you and me who worked hard for it! Yet 88 billion pounds from our pensions is directly invested in fossil fuels, and that's not including other unethical investments like weapons, deforestation and ultra-processed food driving the obesity crisis.
The impact of switching to a green pension is huge. Switching can cut your carbon footprint 21 times more than going vegetarian, giving up flying, and switching energy providers combined.
So, what are your rights when it comes to your pension? If your pension is through work, your employer usually chooses the provider. You can’t legally demand a different one, but you can influence the conversation. Many employers are open to greener providers, especially when staff collectively raise the issue. In some cases, they may even allow you to opt out and choose your own scheme.
Start by asking:
“Does my pension invest in fossil fuels?”
“What ethical or climate-conscious options do you offer?”
You can also transfer old pensions from previous jobs into a climate-friendly fund you control. Providers like Nest, PensionBee, and Cushon offer greener investment options.
To find out how ethical your pension is and what you can do about it, you can hop over to My Money Matters.
3. Review your investments
If you have a stocks and shares ISA, savings, or other investments, it's worth checking where your money is going. Many mainstream funds include fossil fuel companies, arms manufacturers, or other industries that may not align with your values. But there are better options.
You don't need to be an expert to make a change. Start by asking yourself questions like:
"Does this fund invest in fossil fuels or arms?"
"Is there a greener or more ethical alternative?"
If you want to start more ethical investments, you can head over to platforms like Ethex and Abundance Investment. These UK-based platforms focus on renewable energy and community-led projects. Ethex has been praised for its accessible platform and positive impact investments. Abundance Investment offers a range of green initiatives, though, like all investments, returns are not guaranteed.
Are ethical investments riskier? Not necessarily. Many ethical and ESG (Environmental, Social, Governance) funds have performed as well as, or better than, traditional funds. As the world shifts away from fossil fuels, investing in coal or oil is becoming riskier.
Ethical funds still diversify across various sectors, not just renewables. Some community-based investments may carry slightly more risk, but they also offer direct impact and greater transparency.
Start small, ask questions, and explore options that align with your values. In this way, you're not just making financial investments. You're also investing in a safer, healthier world for your family and future generations.
4. Support Clean Energy in Daily Life
You don’t have to be a millionaire or a policymaker to shift money away from fossil fuels. You can divest in your everyday life too:
Switch to a green energy provider like Octopus Energy, Good Energy, or Ecotricity. These companies offer 100% renewable electricity and are committed to building a cleaner grid. To switch, just compare providers on websites like Big Clean Switch or Uswitch — look for those with strong green credentials. The switch usually only takes a few minutes, and your supply won’t be interrupted.
Install solar panels if you own your home, or join a community energy scheme if you rent. Community energy projects let you invest in or benefit from local renewable power, like solar panels on schools or wind turbines owned by local cooperatives. To find one near you, check sites like Community Energy England, Energy4All, or ask your local council or climate action group.
Consider an electric vehicle (EV) if you’re in the market for a new car. Despite the headlines, EVs are much cleaner than petrol or diesel cars over their full lifespan — even when you include battery production. They also reduce air pollution, which causes millions of deaths globally each year.
Yes, we’ll still need to mine for precious metals to make the batteries, turbines, and solar panels we rely on for clean energy. But here’s the thing: we already mine massive amounts of coal, oil, and gas. The land footprint and pollution from fossil fuels is far greater. Clean energy systems need fewer resources long term, and they keep giving back.
5. Simpler Everyday Divestments
You don’t have to make big financial changes all at once to start making a difference. Small, everyday choices add up. The following tweaks help reduce your personal dependence on fossil fuels while supporting a cleaner, healthier planet.
Choose to cycle or walk instead of filling up your car’s petrol tank. This saves you money on fuel and parking, boosts your physical health and mental wellbeing, and reduces greenhouse gas emissions and local air pollution.
Carpool or use public transport when you can. Sharing journeys means fewer cars on the road, less pollution, and lower fuel costs for you. It can also reduce stress from driving and helps cut the huge demand for fossil fuels in the transport sector. I’ve taken a few successful cross-country trips with the “BlaBlaCar” app. It’s a great way to travel more sustainably and meet new people.
Reduce flying when possible. Flights produce a large amount of carbon emissions, often far more than other forms of travel. Choosing to fly less or taking trains and buses for shorter trips can significantly shrink your carbon footprint. If you do need to fly, consider offsetting your emissions through trusted schemes. Offsets should never be seen as a free pass to fly more. The best way to reduce your carbon footprint is to fly less whenever you can, and choose lower-carbon travel options like trains or buses. If you do fly, offsetting can be a way to contribute positively, but only when combined with real efforts to reduce air travel overall.
Buy less “stuff.” Fast fashion, cheap electronics, and throwaway products might seem affordable, but their production and disposal create a heavy carbon footprint. They are often intertwined with human slavery, pollution, and biodiversity loss, too. Buying fewer, better-quality items or shopping secondhand saves you money, reduces waste, and helps protect natural resources. And it shows a clear signal to the fast fashion industry. You can download the “Vinted” app for pre-loved clothes with just a click.
Sure, these small shifts won’t save the planet on their own. But knowing they’re often better for your health or your wallet makes them worth doing. Plus, by making these changes, you can inspire others around you. This means you're contributing to the culture shift that creates momentum for bigger policy changes to follow naturally.
All these choices are more than just personal wins. They are powerful steps towards a resilient, sustainable future. Each action helps build the systems and communities that support clean energy, reduce waste, and protect the planet for future generations.
By making simpler, everyday divestments, you’re not only lessening your environmental impact. You’re investing in your health, your wallet, and the well-being of your community. You’re becoming part of a bigger movement that can truly move the needle on climate change.
Remember: your money is power. Use it wisely.
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