From the products we purchase to how we manage our money, aligning our financial actions with our values has never been more important. Welcome to the world of ethical super funds - a way to responsibly invest in your future while positively impacting the world around you.
Whether you're a seasoned investor or just starting, let's explore the world of investing with a purpose. It's time to put your money where your values are!
So what is an ethical super fund?
Unlike conventional super funds that invest in a wide range of industries, ethical super funds proactively invest in industries that have positive impacts and focus on improving environmental, social and governance (ESG) issues.
Ethical super funds may allocate investments towards industries such as renewable energy, sustainable technologies, healthcare, sustainable water, employment and education, just to name a few. In line with their commitment to social and environmental investment practices, many ethical super funds avoid investing in industries associated with fossil fuels, animal cruelty, alcohol, gambling, tobacco or labour rights violations.
Australian Ethical provides ethical superannuation, pension and managed fund services. Established in 1986, Australian Ethical is one of the country's original ethical investors and was the first publicly listed company in Australia to earn a B Corp-certified status. By applying a comprehensive set of ethical criteria, Australian Ethical purposely directs capital towards companies that engage in positive initiatives such as renewable energy. We use Australian Ethical for our Super.
2. Future Super
Another ethical super fund isFuture Super which strives to create a future free from climate change and inequity. With a 0% threshold for fossil fuel, Future Super screens out investments that have direct exposure to fossil fuel companies. Being a big believer in transparency, Future Super provides a thorough list of everything that they invest inand how much money they allocate to each investment.
3. Verve Super
Verve Super is an ethically focused super fund and was the first Australian super fund to be founded by women and tailored for women. Operating as a partner of Future Super, Verve Super is committed to creating a community that is supported to grow their retirement savings without having to compromise on their values. Verve Super seeks ethical investments in companies that are identified as drivers in gender equity, carbon efficiency and have a positive impact on the environment. They also provide transparency with an extensive list of unethical industries that they avoid investing in.
4. Aware Super
AwareSuper is one of Australia's largest profit-for-members super funds. Aware Super has a focus on long-term investments that have positive impacts. This means that they invest for strong outcomes whilst also considering the environmental, social and governance impacts of all their investments. Aware Super has a company-wide exclusion on investments in the tobacco, controversial weapons and thermal coal mining industries.
How to choose the right ethical super fund for you?
When it comes to choosing an ethical super fund that is best for you, there are heaps of factors to consider. These considerations might include your values, the performance of the fund, fees, costs and of course, where the fund invests your money.
It’s also important to remember that just like any other super fund, ethical investing will always have its ups and downs. No one is perfect and some funds may be indirectly involved in industries that you want to exclude, so don't forget to do your research.
A great resource to assist you in finding and comparing ethical super funds within Australia and New Zealand is the Responsible Returnsinitiative by the Responsible Investment Association Australasia (RIAA). Responsible Returns provides information about independently certified ethical, sustainable and responsible superannuation options so that you can make an informed decision about where you invest in your future.
In a world where conscious consumerism extends to your financial choices, ethical super funds are a powerful way to align your money with your values to invest in a better future for both yourself and the planet.
I hope this was helpful! If you are keen to look more into Green Energy in Australia, we also did our research and wrote a blog about it here.