Can you use super to make a positive difference in the world?
Super could be the biggest amount of money you’ll ever have. Choosing how you invest it can have a positive impact on the world you live in.
Are there ethical investing options in super?
Ethical investing has really taken off in recent years. It’s now far more common for all sorts of investments – including super – to offer ethical options that invest in assets doing less harm and more good for people, animals and our planet.
Is ethical investing a big thing for people like me?
This doesn’t mean all super funds offer ethical or sustainable options. But as more members are looking for this from their super fund, it’s definitely something you can expect to see in your choice of investment options. In fact, most Australians – as many as 86%1 – expect their super balance to be invested ethically, even when they’re not choosing an ethical investment option. And around two thirds of people surveyed (67%) who don't currently invest in ethical companies, funds or superannuation funds are thinking about making a switch to ethical in the next five years1.
Are these options better for my super balance too?
This growing interest in ethical investing isn’t just motivated by doing good with our money. 62% of Australians believe ethical or responsible super funds perform better in the long term1 . So can investing for the greater good be good for your super balance too?
As with all investments in super, you can’t be 100% certain of getting a better outcome just by choosing ethical options. And it’s certainly the case that investing in ethical assets narrows down the range that options investment managers can choose between. But whether they call themselves ethical or not, many options in super already consider environmental, social and governance (ESG) issues as part of the whole picture for investment risks and returns. If a company isn’t taking steps to cut carbon emissions for example, this could impact their growth and profits in a low or zero carbon economy.
"These days I don’t need to ask my clients if they’re interested in ethical options for their super. They’re telling me that they are and they’re very certain about making sure their super is invested according to their values. Of course it’s important for me to make them aware that ethical investing means reducing the choice of assets they can invest in. And in the past you might have been giving up some returns as a result of limiting your options. But today ethical choices can be on a par with many other options in super."
What should I be looking for in an ethical investment option?
As with all super investments, you need to be confident you’re choosing options that suit your situation, timeframe and risk profile. And with the growing number of ethical options available, it’s also important to understand if investments you’re choosing in super match your priorities for making a positive difference. Perhaps you’re looking to avoid investments in weapons and fossil fuels and support progress towards social justice and renewable energy. It’s also important to understand that not all ethical investment managers operate the same. Different investment managers will use differing criteria for determining their ethical investments, with some being more strict than others.
Get help with making investment choices
If you’re keen to do more good in the world with your super savings, getting in touch with us can point you in the right direction. We can help you take steps to change your investments or direct you to where you can find a financial advice professional who can talk through your goals and options for making the most of your super.1 Responsible Investing Association Australasia, From Values to Riches 2020 report