Super funds untapped opportunities for ethical investing

Although Australians declare that ethical investing matters to them, the majority lack knowledge on how their money pooled in superannuation funds can be leveraged to help make a positive impact on the environment, according to Australian Ethical research.

What is more, 83% of Aussies believed that climate change was triggered by human activities, however only 2% thought that investing with an ethical super fund would have a better outcome for the climate crisis.

This also meant there was an immediate need to address an education problem around how Australian dollars currently invested in super, which amounted to $3 trillion, could be used as a vehicle for positive change given that, according to the study, 67% of Australians had never heard or not understood the concept of ‘ethical investing’.

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Additionally, only 5% of respondents, out of more than 1,000 surveyed Australians, were less likely to select a super fund that demonstrated it invested in a socially, environmentally and ethically, responsible way, and had a history of investment returns that were the same as other funds.

At the same time, Australians cared about many issues in their everyday behaviour and purchasing power they were still more inclined to rank as environmentally friendly toilet paper, furniture and cleaning products than ethical super, the research found.

“Our individual money choices have far greater power than we realise. By collectively moving our money, we can restrict the capital available to unsustainable business, such as coal mining and fossil fuel production, and make it more difficult for these types of companies to expand,” Stuart Palmer, head of ethics research at Australian Ethical, said.

“By both reducing demand for their shares and drawing attention to the harm they cause, individual investors can create powerful incentives for unsustainable businesses to do better.”

Australian Ethical’s chief customer officer, Allyson Lowbridge, added: “we know that the global issues we face can’t be fixed overnight and that the everyday actions Australians are already taking are vitally important.

“But this research tells us that people want to do more and through ethical investing they really can. It is possible to generate financial returns for themselves and positive returns for the planet.”

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