The COVID-19 pandemic has had a tremendous effect on the economy, businesses and household incomes are undeniable. It’s a time of uncertainty because no-one knows how life after the coronavirus pandemic will look like.
We caught up with Viviana van Agtmaal, Conscious Capitalism Diplomat, who is in the financial space for more than 25 years. She tells us about Conscious Capitalism and how it can help individuals and companies tighten up their finances and investments.
What is Conscious Capitalism and who drives it?
Conscious Capitalism is about using the capitalist principle to make and utilise money but without doing any harm to human beings, society and the environment. Conscious Capitalism has three main drivers. The first driver is Conscious Investment Funds choosing Environmental, Social and Governance (ESG) principles in their investment choices to not allow their financial gains to do harm elsewhere, for example shifting away from investing in fossil fuels or tobacco companies. There are increasing investment governance guidelines and mounting global pressure on investors to consider Environmental Social Governance (ESG) risk factors. The second driver is Conscious Companies which are corporates that are no longer just exclusively focussing on making money for shareholders at the cost of others. Instead, they equally concentrate on the wellbeing and gains for everyone involved in the business as well as their communities and environment. The third, and probably the most influential driver is consumer spending. Individuals being conscious about with whom and on what they spend their money. These Conscious Consumers are the biggest influencers for change on Conscious Investments and Conscious Companies. In turn, Conscious Investment Funds drive Conscious Companies as they no longer want to invest in companies that are not conscious and ethical.
What sparked your interest in Conscious Capitalism?
I was aware of the enormous power that our spending habits have and the general lack of recognition the consumer has of this power. I realized that a lot of people are not conscious when it comes to spending their money. Individuals make purchases but do not take time to do research on the product or where they are spending or investing their money.
What does this mean for local businesses during Covid-19?
Local business could consider and concentrate on what their unique appeal is to customers, what sets them apart, and very importantly, how they can add value for ALL their stakeholders including customers, employees, suppliers and communities. Consumers are looking for ‘feel-good’ companies that realise we are all in this together and are giving back at this time as well. Local businesses could also consider their own ESG factors and promote these behaviours. Many aspects of globalisation are being questioned now and there are many advantages to being local, like a lower carbon footprint and less interruption to the supply chain.
How can we avoid overspending during the lockdown?
Saving money and checking up on your investments during this time would be the best thing to do right now, for those who are in a position to do so, but we should all be more conscious about the power of money and try to shift our efforts to spend money wisely.
We need to consider where we are spending our money. Overt consumerism is killing our planet. We need to start asking ourselves every time we spend if we really need that product or service or if we just want it and if we do need it, does the brand we are purchasing align with our values. For instance, a trip to the hairdresser could give us an opportunity to check if our service providers are using shampoos that are tested on animals if testing on animals does not align with your values. Money has an energy, it is a reward for the energy we put into our work, and we should control where that energy goes and what it gives further energy to.
What would you say to the next generation to help them make better choices financially?
Money management should be taught at a young age as part of the school curriculum. Try to save a small portion of everything you earn, from your very first paycheck. Try to put 10% aside every time you are paid. No matter how small or large it is. Nowadays, young people are also increasingly interested in ethical ESG (Environmental, Social and Governance focussed) investments, I encourage them to ask questions concerning their investments and to actively engage with their financial advisors to find out where what and with whom their financial advisers invest their money.
Source: KREDD Communication