A growing cohort of super funds is offering genuine options for consumers who don’t want to support the fossil fuel industry and would like to support the renewable energy industries for the future.
“This is not just for philosophical and good moral, it’s also a smart way to invest,” says Stuart Barry, practice principal and senior financial adviser, Tas Ethical.
According to an ethical financial adviser co-operative, EthicalFundRatings.com, Future Super is the leading fund when it comes to ethics and climate change considerations, as voted by a group of specialist financial advisers around Australia. Australian Ethical Investments is the number two fund.
The fund doesn’t invest in any primary fossil fuels globally or locally, or the big four banks, which lend to companies with exposure to coal, gas and oil. Over a four year period, the fund has attracted 12,000 members.
“This exodus to ethical funds has never before happened in the history of Australian superannuation,” says Barry.
Research by the Responsible Investment Association of Australia (RIAA) backs this up. According to its latest benchmark report, “there has been a 188% increase of AUM subject to core responsible investment strategies.”
The same report shows responsible investing also delivers outperformance. It notes, “as in the previous year, core responsible investment Australian share funds outperformed the average large cap Australian share funds over three, five and ten year time horizons.” This figure is net of fees.
Consumer preference to invest in super funds that don’t support environmentally-harmful practices looks set to increase, so you may well see funds offering investment options in this area proliferate as time goes by.