Money
How tobe super ethical E D I T E D by GENEVIEVE GANNON
The growth in ethical super funds means it’s easier than ever to do good while saving for retirement.
Is ethical investment riskier?
There has long been scepticism around ethical investing, Effie says. “There always was a fear from a consumer perspective, is there a trade off? Do I get less return? That’s definitely
not the case. When you look at the past performance of ethical super funds they’ve done really well.” Part of what shocked Dr King when she learned she was investing in tobacco was that it seemed like bad business. “Declining returns and growing business threats present a clear and present financial risk for investors in tobacco,” she says. Ethical investment is normally directed towards sectors with longterm growth, Effie says. “Renewable options, that’s a growth sector so they’ve got long-term growth prospects.”
Where is your money?
Start by looking at your product disclosure statement. Even if you have an “ethical” fund, it’s worth taking the time to understand what you’re actually investing in. “Ethical” has unfortunately become a bit of a buzzword in the financial sector, Effie explains. “Some of the unethical investments that are screened out are fossil fuels, weapons, tobacco and logging. But is animal cruelty? You’ve got to actually see where they’re investing and where they’re not.” Your fund manager should be able to provide you with a breakdown of the companies your fund is currently
178 The Australian Women’s Weekly | FEBRUARY 2020
investing in. The Responsible Investment Association Australasia provides a wealth of information about navigating this complex area.
Look before you leap
You can then speak to your fund manager about what options they have. They may be able to offer you an ethical option. Yet if your fund has one “ethical” option but maintains holdings in areas that are not meeting your ethical standards, you may want to consider looking elsewhere, Effie says. She cautions again being rash. “Don’t rush straight out of your super fund because there are so many things attached to it. You may be on a very lucrative insurance policy. There may be exit fees,” Effie says. “Get some expert advice before you run.” One thing she does advise is letting the fund know why you’re leaving. “Ethical investment has been around for a long time but it’s gaining momentum because people are starting to realise that if the government’s not going to fix these issues we as investors can, and that’s a very powerful thing.” AWW
GETTY IMAGES. ALWAYS CONSIDER YOUR PERSONAL CIRCUMSTANCES BEFORE ACTING ON FINANCIAL ADVICE.
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ncologist Bronwyn King always wanted to save lives, but she never expected the best way to do so would come from examining her finances. When she discovered the default setting on her superannuation fund meant she was supporting the production of cigarettes, she was horrified. She now heads Tobacco Free Portfolios, a company that has driven a significant reduction in investment in cigarettes. But tobacco isn’t the only questionable product super funds invest in, she says. Weapons, slavery, pornography and logging are just some of the industries Australians may be supporting without realising it. Canstar Editor-at-Large Effie Zahos says there is a growing appetite for ethical investment but most people don’t know where to start. Legislation that requires super funds to make their investments more transparent has been deferred until the end of next year, so we spoke to experts about what you can do to ensure your hard-earned salary is not supporting industries you ethically oppose.