Know your boundaries!

Today I am bound to my bed. The tail-end of a dose of COVID and the eye of Storm Eunice are the universe’s way of telling me I should hunker down and embrace the four walls of my bedroom. There’s some pleasure to be had from knowing that you can’t really do anything much and, while the novelty of such a passive existence would no doubt wear thin after a while, it can be good to have boundaries.


Good boundaries, excellent boundaries

For example, the wind is doing its level best to breach the boundaries of my brick-built house. I consider those good boundaries. The teenager, who has been given a day off school because of the storm, has work to do on line so as not to fall into the tempting lair of the ‘time-wasting’ monster. Again, good boundaries. I’m not allowed in the kitchen until I get a negative LFT so can’t possibly cook food for the family. Excellent boundaries.


Unbridled nature…

And yet. That free-wheeling wind out there is kinda thrilling. Pictures of ginormous waves disrespecting the boundaries of the seaside promenade excite us (as long as no one is hurt in the taking of the photograph, obvs). And we lap up the stories of the havoc being wreaked out there from the safety of our homes because we are somewhat in thrall to the power of unbridled nature.


…within the bounds of normal

But it’s wrong to think of nature as having no boundaries. There have been a number of reports this week of scientists explaining that storms like this are part of a ‘normal’ meteorological pattern and not caused by climate change. Apart from the worry about how many people can turn that statement into something that means that climate change is not a thing, I think this illustrates how we understand even extreme events within the bounds of something that we call normal.


Planetary boundaries

In my studies to better understand the issues around sustainable investing, I found the most helpful handle on the environment question to be the concept of planetary boundaries. This is the notion that, in order for the planet to survive, there are limits to how far we humans can push it. Nine areas affecting the planet, including climate change, ocean acidification and biodiversity loss, have been identified by a body known as the Stockholm Resilience Centre who work on quantifying exactly where the boundaries for each of these areas lie. In other words, people are calculating how much the climate can change, how much biodiversity can be lost, how acid the oceans can become before everything that we know about how the planet works unravels. They reckon that four of these nine boundaries have already been pushed to what is ominously (and grammatically challenging-ly) named the ‘Beyond zone of uncertainty’.


Doughnut Economics

On this subject of planetary boundaries, a pleasing sugary-snack-related diagram has been developed by an economist called Kate Raworth, dubbed Doughnut Economics. Think of a doughnut, and think of its outside edge as being the limit of how much we can plunder the earth’s resources and interfere with its ecological balance. Now work back towards the hole in the middle and think of that inner circle of the doughnut as marking the minimum amount of looting and interfering that we humans need to do in order for us as a species to survive. In an ideal world, we could work with the planet and all it has to offer in that fleshy part of the doughnut so that Earth and Humans live together in perfect harmony. Take too much and the Planet is in danger. Take too little and the People starve and die out.


A pot of resource

What I love about this is that it is so bloomin’ obvious. It is the exact same message we give to clients who have a pension pot full of ‘resource’ at the start of their retirement. Here is a sum of money. It has to last you at least until you die – or maybe beyond that if your partner is relying on it. Use it wisely. Enjoy it. Don’t overspend ‘today’ because ‘tomorrow’ it will be too late. But also, do take enough to feed, clothe and house yourself – otherwise, you won’t survive.


Not a bottomless pit

On a personal level, the message ‘this is all you’ve got, don’t blow it’ is relatively straightforward. But it can still prove problematic. A huge sum of money in a pension pot – like a huge planet full of potential riches – might seem like a bottomless pit to someone who isn’t used to setting themselves boundaries on their spending. Without good advice, they might forego the budgeting and just dive on in there whenever the fancy takes them. Equally, someone who is constrained by internal behaviours that keep the budgeting too tight might forego necessary spending and live like a pauper, only to leave an embarrassment of riches to the next generation (who might then blow it).


Planet Earth: our collective pension pot

So perhaps it is no surprise that, collectively in the developed world, we struggle with this same message when it comes to the great big old pension pot that is Planet Earth. Maybe that’s because the advice hasn’t been communicated clearly or loudly enough. Maybe we didn’t believe it was a thing. Or maybe the catastrophic events of too much resource-taking were always far enough down the line for us to think it wasn’t our problem. It can be hard to stick to boundaries when the consequences of overshooting them are out of sight.


Boundaries don’t get the party started

I think also at play here is the fact that concepts like Boundaries – along with their goody-two-shoes classmates Moderation, Compromise, Budgeting and the like – are never going to be the ones to get a party started. More likely they will come in at the end, shuffling on their sensible shoes, toting a mop and bucket and tutting loudly. We don’t always want to be around them when flashier, headline-grabbing attractions like Pleasure, Excitement and Adventure are in town and so we pretend they don’t exist. Until, that is, we notice that the resources are dwindling and then we panic and wish we’d listened earlier.


The neat logic of sustainable investing

So where does sustainable investing fit in? The very definition of sustainable is ‘able to be maintained at a certain rate’. We can apply this in the investing world both to the companies, products and services that the managers of our pensions and ISAs invest our money into – and to the way we take money from our retirement pot. There’s a neat logic to wanting to invest in companies that will be around for a long time to come because you want your money to last … for a long time to come.


Screened out for overstepping the boundary

Investing sustainably is as much about avoiding putting your money into companies that will be ‘losers’ in a world that needs to stop spewing out carbon and chopping down rainforests as it is about backing companies that will be ‘winners’ because they offer solutions to the climate challenge, inequality and poverty that can threaten the world’s stability. Investment managers will use boundaries to help them decide who is in and who is out – companies responsible for too much carbon, plastic waste, wage inequality etc will be ‘screened out’ because they overstep the mark. Companies that tick boxes in problem-solving, longevity, inclusion and diversity will be ‘screened in’ and possibly get an investment if the price is right. It’s not always a perfect approach. But it’s a start.


Women and sustainable investing

I keep seeing surveys suggesting that it is women who are most likely to want to ‘do good’ with their money. These surveys are often aimed at the investment industry itself – more specifically at their marketing departments. I’ve written about this before but I reckon it is more to do with fact that fewer women than men are already investors than it is to do with our ‘womanhood’. If you are starting from scratch and someone offers you something that is billed as responsible, sustainable and having positive impact, of course you’re going to say yes to that.


A bandwagon of greenwashing

Investment managers around the world are currently falling over themselves to tell us how responsible they are in the way they manage our money. Cynics can call this a bandwagon of greenwashing (what a lovely combination of words) and it might turn out to be true that some managers are pushing the boundaries of what they actually offer here. But public scrutiny has got so intense, I suspect they won’t get away with it forever. The way I see it is that managing investments responsibly and sustainably will encourage our faithful old friends Boundaries, Moderation, Compromise and Budgeting to have their day in the sun.



On a more mundane note, my food delivery has been cancelled due to the storm and I can’t go to the shops due to COVID. First world problems. Guess we’re just going to have to be resourceful and use what we have. Carefully.

Talking Finances is a trading name of Talking Finances Ltd. Talking Finances Ltd is an appointed representative of Beaufort Financial Planning Limited, Kingsgate, 62 High Street, Redhill, Surrey, RH1 1SH, which is authorised and regulated by the Financial Conduct Authority, FCA Registration No. 583233

This article represents the personal opinion of Carole Haswell only and does not represent any opinion of Beaufort Financial Planning Limited. Financial decisions should not be made on the basis of this article