The wave of climate protests (the Climate Strike a few weeks ago, and to a lesser extent the Extinction Rebellion last week) are a good reminder that although our current political masters (especially at the Federal level in Australia) are keen to do nothing, pretty soon a large mass of people who want action will be joining the electoral roll and voting.
Oh, the politicians may claim they’re acting. But the numbers speak for themselves: Australia’s emissions are rising, not falling, and some politicians’ love for coal (including building new coal power stations, even when it makes no economic sense) and the constant criticism of clean power and electric cars makes it obvious which way they lean.
Anyway, if you’re working, there’s something you can do.
Pretty much every working Australian adult has superannuation, your mandated retirement fund, and for most people it’s probably their largest, or second largest asset (perhaps second only to their house, if they own one).
For many people it’s Set And Forget. But you can choose to direct your super fund to put your money into ethical investments.
These can avoid your money going into things that you may be philosophically opposed to: for instance arms manufacturing, gambling companies, and fossil fuels. The precise definition of ethical varies by fund, but I suspect they’re all a step in the right direction.
What’s the financial cost of this? Probably nothing. In fact shifting to ethical might well be financially beneficial, as many of these investment options actually have very healthy returns.
For instance, for some years my own super has been half in an Australian Shares portfolio and half in an Ethical fund. The compound return on the Shares in the past 10 years is 8.8%; Ethical is 10.6%.
(Note: this blog does not constitute financial advice, past performance is not an indicator of future performance, etc, etc.)
The easy option
In many cases your current super fund will already have an ethical option, which makes it easy.
Just log onto your super fund’s portal, and find the setting for investment preferences. In mine it’s called “Future investments”, eg where any future deposits go to.
If you’re lucky, this will take all of a couple of minutes to do.
Different funds decide for themselves what is “ethical”. The above explainer is from Australian Ethical Super, but the bigger funds may not be as fastidious.
If you’re super keen, you can look around at the ethical super fund that best meets your values.
This Choice article is a good starting point.
If you decide to roll your super over into a new fund, this involves a little more work, but isn’t overly onerous these days.
I must emphasise that I’m not a financial adviser, and there is inherent risk in any investment.
But your super is (hopefully) a huge amount of money that is working for you. So why not have it match your values?
- Note: I’ve got no link with Australian Ethical Super, but I am a customer of their Managed Funds. Managed Funds, if you’re wondering, are similar to Super, except the money is not tied up until you retire.