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Byron Shire
April 21, 2021

Strike a blow for the planet with your super

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Paul Bibby

It seemed like a fairly reasonable request.

I just wanted my superannuation provider to tell me how they were investing my money.

But Brad* from Mercer Super Australia said it couldn’t be done.

‘Um, sorry, I can’t give you that information,’ he said.

‘I can tell you about your returns?’ he added, hopefully.

I declined.

The next day I switched to an ethical super fund.

What can we do?

As the bushfire crisis worsens, many northern rivers residents are asking the question ‘What can I do to save the planet?’.

And it appears a growing number are questioning how their money, whether it be superannuation contributions or bank savings, are being invested.

Frustratingly, superannuation providers are not required by law to disclose their investment portfolios, even to their own customers.

But there is plenty of evidence that the mainstream funds are far more interested in their own profits than in saving the planet.

‘The mainstream investment world will invest across the economy – that includes coal, fossil fuels, weapons manufacture, and many other industries that their customers may be quite opposed to,’ says the head of ethics research at Australian Ethical Investment, Stuart Palmer.

‘Even their “ethical” portfolios tend to exclude only the worst industries such as cluster munitions (land mines) and tobacco.’

The only way to ensure that your money is not being invested in an industry that is destroying the planet or its inhabitants is to divest from the mainstream super funds and choose an ethical fund.

A growing number of northern rivers residents appear to be doing just that.

Locals making the switch

‘Money talks,’ is how local tradie Ben put it to Echonetdaily.

‘You can post on social media, you can do all of that, but if you’re serious about making a difference, take your money out of fossil fuels.’

Another local, Tirza Abb, made the switch last Friday.

‘I’ve been feeling really powerless and very negative about the environmental situation, and I’ve been thinking about ways to make a difference,’ says Ms Abb, who works for The Echo as a graphic designer.

‘Not giving my money to those companies that are destroying the planet is one way I can make a difference.

‘It was really easy to switch – it took about two minutes. Next I’m going to switch banks.’

Despite the relative ease in divesting from a mainstream super fund, many people hold back from doing so.

This is partly owing to inertia, but there are also a number of common misconceptions about the difficulties and penalties involved in switching funds.

Answering some common questions

Here’s are Stuart Palmers responses to some of these issues:

  1. I’ll have to pay exit fees:

Historically there have been exit fees which many funds have charged, but as part of the Protect Your Super changes that went through recently, super funds are no longer able to charge an exit fee.

  1. My returns will be lower:

That’s not born out by the analysis. The most recent report from Responsible Investments Australia shows that responsibly invested funds out-performed the mainstream ones over three, five, and seven years.

  1. I don’t think my (mainstream) super fund is that unethical:

The mainstream investment world looks at things through the lens of returns. That’s their primary focus. So they may exclude the most unethical industries like tobacco but they rarely look at whether a specific company engages in ethical sustainable practices.


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2 COMMENTS

  1. Dear Paul,

    Please tell us who these ‘ethical funds’ are, as I’d like to invest in a fund that has ethical investments.

    Could you also please provide the data behind the statement that: “responsibly invested funds out-performed the mainstream ones over three, five, and seven years.”, including which funds are included in the comparison?

    Also, these “ethical funds” too are not required to disclose what makes up their investment portfolios. If that’s the case, how do you know which companies you’re actually investing in?

  2. Dear The Gofer, thank you for your questions

    The main ethical fund in Australia is Australian Ethical.

    Here’s the link to the report which shows that responsibly invested funds outperformed their rivals. The relevant table is on p17:
    https://responsibleinvestment.org/wp-content/uploads/2019/07/RIAA-RI-Benchmark-Report-Australia-2019-2.pdf

    Even though the ethical funds are not required to disclose their portfolios, they do anyway. That’s how we know what they’re investing in.

    Cheers, Paul

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