The Power of Ethical Investing: Insights from Lisa Hardman of Investing Ethically

Financial security is a key concern for conscious entrepreneurs, yet many overlook the deeper impact of where their money is invested. Our recent guest speaker, Lisa Hardman from Investing Ethically, shared invaluable insights into financial planning, ethical investing, and business protection. The discussion covered pensions, savings, and how small shifts in financial habits can lead to long-term stability while aligning with ethical and sustainable values.

Whether you’re a business owner looking to de-risk your future, considering ethical investment options, or simply seeking financial clarity, Lisa’s advice provided a roadmap to a more secure and conscious financial future.

Why It’s Important for Business Owners to Start Saving Early

A key takeaway from Lisa’s talk was the necessity of early financial planning, even when saving small amounts. Many business owners assume their business itself will be their pension, but Lisa emphasised the risks of relying solely on this approach.

Key insights from Lisa:
✔ Saving even £25 a month into a pension builds long-term security.
✔ Separating personal finances from business assets de-risks your future, ensuring stability beyond your business’s success.
✔ Pensions provide tax-efficient ways to save, and businesses can pay directly into them without personal taxation.
✔ Investing ethically through pensions ensures your money is working for causes you support, not industries you oppose.

Understanding Where Your Pension is Invested & Why It Matters

Many people don’t realise the power their pension funds hold. Pensions are often the biggest financial asset after a home, and where they are invested can have significant ethical and environmental consequences.

Lisa explained how pension providers invest money into a range of industries, sometimes including arms, tobacco, fossil fuels, or companies with poor human rights records. Yet, many pension providers now offer ethical, sustainable, or impact-driven funds.

How to check your pension investments:
✔ Log into your pension provider’s website.
✔ Search for “ethical,” “sustainable,” or “responsible” funds.
✔ Review the top holdings in the fund and request a full breakdown from your provider.
✔ Switch to an ethical fund if needed—it’s often free to do so!

Why this matters:
✔Ethical pension funds actively shape the corporate world, pushing for more sustainable practices.
✔Investing consciously sends a strong message to fund managers about what people value.
✔Many sustainable funds are performing as well as, or better than, traditional funds, meaning ethical investing can also be financially rewarding.

Regular Financial Reviews: A Business Owner’s Best Habit

Lisa encouraged all entrepreneurs to take a financial health check at least once a year. Many people lose track of where their money is, especially with multiple pension pots from past jobs.

Steps to conducting a simple financial review:
1. List all your financial assets – pensions, savings, business accounts, personal accounts.
2. Check your pension balance – understand how much is in it and where it’s invested.
3. Review monthly savings and investment contributions – can you afford to increase them?
4. Consider your future plans – when do you want to start drawing down?
5. Track National Insurance (NI) contributions to ensure you qualify for the full state pension (35 years required).

Key insight: People often don’t know how much they have saved or where it’s invested. Keeping track allows you to adjust and plan proactively rather than reacting when it’s too late.

Practical Ways to Begin Ethical Investing Beyond Pensions

Many entrepreneurs want to align their financial choices with their values but aren’t sure where to start. Lisa provided practical options for making ethical financial decisions before even reaching pensions or investments.

Simple ethical financial actions you can take today:
✔ Choose an ethical bank – Triodos, The Co-Operative Bank, and some building societies offer ethical banking options.
✔ Switch your business savings account – get interest on savings while ensuring your money isn’t funding harmful industries.
✔ Review business expenses – where does your money flow each month? Could it be directed towards more ethical suppliers?
✔ Consider ethical ISAs and bonds – these provide savings while ensuring your money supports sustainable projects.

Key insight: You don’t have to be a big investor to make a difference—your everyday financial choices impact the world.

Business Protection: Why It’s Essential for Entrepreneurs

One of the most overlooked aspects of financial security is business protection insurance. Lisa explained how income protection, shareholder protection, and key person insurance can safeguard a business owner’s financial future.

What business protection can cover:
✔ Key Person Protection – covers financial loss if a crucial team member becomes unable to work.
✔ Shareholder Protection – ensures business partners can buy out shares in case of a co-owner’s death.
✔ Income Protection – replaces personal income if you become unable to work due to illness or injury.

The Importance of Lasting Power of Attorney & Wills

A crucial yet often neglected part of financial planning is lasting power of attorney (LPA) and wills.

Did you know? Even if you’re married or in a partnership, your spouse cannot access your individual bank accounts or make financial decisions on your behalf without an LPA.

What entrepreneurs need to do:
✔ Set up a Will – ensures business assets and personal wealth are distributed according to your wishes.
✔ Create a Lasting Power of Attorney (LPA) – allows a trusted person to manage your finances if you become incapacitated.
✔ Nominate pension beneficiaries – ensures your pension is passed on seamlessly.

Key insight: Wills and LPAs prevent unnecessary financial and legal complications during difficult times.

Final Takeaways: What’s One Simple Financial Habit to Start Today?

Lisa wrapped up the session with a simple yet powerful habit that every conscious entrepreneur can start today:

Create separate savings accounts for different needs (e.g., business growth, tax, rainy day fund, holidays).
✔ Emergency fund – aim for at least £10,000 for unexpected costs.
✔ Long-term savings – consistent saving, even in small amounts, creates financial security.
✔ Review & track finances annually – keeps you informed and in control.

Conclusion: Building a Secure & Ethical Financial Future

This conversation with Lisa Hardman was a goldmine of financial wisdom, from ethical investing to business protection. Conscious entrepreneurs have the power to shape industries through their financial choices, and taking control of pensions, savings, and insurance is key to long-term stability.

What’s your next step? Will you review your pension? Set up a business protection plan? Move your savings to an ethical bank? Whatever it is, taking action today ensures a financially secure, values-aligned future for you and your business.

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