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Bruce Davis, Abundance: ‘we can do something different with money’

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After helping launch peer-to-peer lending site Zopa 10 years ago, Bruce Davis is now co-founder of renewable energy platform Abundance Generation. Here, in an extract from a recent talk, he looks at why alternative finance is better for everyone.

It’s surprising how long it’s taken for people to get the idea of putting their money into an institution that’s trying to do something different with money. People who don’t follow the herd, or go to the nearest bank, or follow what their parents did.

About 10 years ago, when we thought of Zopa, we were talking in a barn somewhere, and thought, “Can we do this lending and borrowing thing without the need for a bank?” We didn’t used to have banks that managed all our lending and borrowing. Could we make that the norm again?

So we came up with this idea about eBay for money. At that point, it was much easier to get funded to do crazy stuff, because it was 2004 and there was a lot of cash around. So we got given a lot of money by venture capitalists to create Zopa.

Zopa now has done nearly £300m worth of lending and borrowing between individuals without a bank, and has the lowest bad debt rates in the world. It has been created out of a desire to say, “We can do something different with money.”

Quite often, we talk about freeing up money, and actually, we need to free our minds when it comes to money. Zopa is a good example of what you can create if you don’t allow economists into the picture.

The really big thing that people are beginning to realise is that economists don’t have all the answers. Economists are really good at telling you what happened; they’re less good when they start using crystal balls.

No economists actually predicted the crash. Quite a lot of anthropologists did.

But of course, you were a bit of a nutcase at that point if you were telling people the financial system was somehow bad. You were probably a socialist.

I have a very strong view and that comes from the first time I went into a home to look a people’s money. Money was not explained by economists. It was social; it was cultural. Everything that was happening was counter-intuitive and rather challenging if you’ve been working in a bank.

It’s quite important because if you realise that, you realise you can take back ownership over your money. You don’t have to give away ownership. That’s a really powerful thing about the mutuals and other forms of direct finance.

You maintain that sense of ownership over what your money does and where it goes because you’re a member.

If you give it to a bank, technically and legally, you no longer own that money. You’ve handed it over to them and they can do whatever they like with it. They have that privilege. And that privilege is what generates the majority of their profits and the majority of their bonuses. And that’s why they want to defend that privilege at all costs.

On the other side of it, unsustainable lifestyles are sustained by this idea that we can have this sort of market that can grow forever.

Free markets are based on the premise that we can have growth forever, unrestrained, and that’s a good thing. That’s a myth – and one that has a very powerful idea in it about freedom and autonomy, and it’s pinned on something rather silly that markets are somehow a natural phenomenon. That we evolved these things and therefore we should just use them.

Having created Zopa, you can just create markets out of thin air. That’s largely what we did. We invented markets, so you can reinvent and change them.

To misquote someone who died recently, “There’s no such thing as markets; there’s only humans and social relations.” I think this is very important, and we probably lived for 20-25 years thinking the opposite, because actually, it’s society that creates markets.

We make the markets we deserve; it’s not the other way around.

But at the moment, we have this idea that markets make society; that markets will make a fairer society, and that’s just patently not true. The more we create markets, the more inequality we have, the less fairness we have, and the fewer good things we do with money.

So in a sense, the idea that ‘greed is good’ needs to die. We need to move on from this idea, because strangely enough, greed is only good for the greedy. They’re the people who win.

When we created Abundance, we were trying to think of ways that would complement what building societies had done in the previous century. Something akin to a building society, but with slightly different mechanisms and approaches that took advantage of technology and changes in the way you could build businesses. A building society for the 21st century was how we kind of started out.

We were frustrated with the structures and hierarchies of financial institutions that meant that that if you create a bank, you start acting like a banker almost by default. You get told to act like a banker by the regulator.

We saw companies like Ecology Building Society, Triodos and the Co-operative showing that you can do things within the current system; but do it better. So Abundance is a response, within the investment side of things, that we can do it but do it better.

And we don’t have to use the same assumptions as we did before.

Bruce Davis was speaking at Ecology Building Society’s AGM.

Further reading:

Why investing directly in renewables projects is a worthwhile venture

‘A small bit of knowledge can help empower you around your own finances’

How renewable energy can help us beat inflation

Abundance calls on investors to pledge to third renewables project

The Guide to Sustainable Banking 2012

Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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