We’re claiming 2022 as the year we all move from climate anxiety to climate action. To get you started, we are publishing a series of articles guiding you on the small changes that have largest environmental impacts.
Some changes are little clicks of a button on your computer! Let’s dig in!
In this Edition, we’re talking superfunds. We’re not claiming to be investment experts and this is by no means financial advice, but we are urging you to consider how your money affects our planet.
Understanding the role of your superfund on climate change.
Think of your dollars as a vote. The Australian super industry manages over $3 trillion dollars worth of assets (or votes), and many use their funds support the fossil fuel, mining, mass agriculture, and gambling industries.
Luckily, there are a handful who’ve committed to giving you returns as well as ethics.
If you're with a fund that hasn't committed, you can either campaign them to divest or simply switch.
Understanding Divestment
Divestment is the selling of assets that support industries such as fossil fuels, mining, mass agriculture, to reinvest in mores sustainable areas.
These divestments from fossil fuels are an important medium in order to foster low energy transitions, as we have seen that the funds have decreased to expand the industry which is harming our planet, and instead - money starts to be reinvested into earth-friendly assets like the renewable industry, and innovative technologies. That’s where you and that individual power of yours, comes in!
Australian Ethical Super in June of 2020 divested $5 million of their shareholding in Marsh & McLennan because it provided insurances to Adani, which if you haven’t heard - is developing the largest coal mine in Australia in the Galilee Basin, Queensland on Wangan and Jagalingou land. By divesting this money, this superfund made a public statement to Australia and the world - that the future of investments is in renewables - and that’s where the ripple effect comes in. According to Science Direct studies, the financial benefits that we see from superfunds such as Australian Ethical, can incentivise investors to put more money into ethical assets, and therefore reduce the amount given to fossil fuel industries.
Making the Switch
Switching to a sustainable superfund creates a ripple of change for the better.
Do you know what your fund supports? Most funds list their investments directly or the most relevant industry those investments comprise. Hot tip, the less detail your fund provides into the actual investments, the more likely they're invested into something a bit dicey: intensive animal agriculture, animal export, tobacco, old growth logging, or the fossil fuel industry.
Here's a little screen shot of a typical non-transparent "balanced" fund breakdown (fund not to be named). On scrolling through the website, you'll find no other information on the investments.
A more transparent fund might offer information that looks a little more like this:
Let’s take a look at the three sustainable superannuation funds with conscious investment policies covering healthcare, renewable energy and innovative technologies.
Each of these companies has a fund-wide comprehensive policy - which means that they manage their funds by excluding coal, oil and gas from their investments. Good for your wallet, good for the planet!
Australian Ethical
“Collectively, we have the power to change the world by investing in the good.”
|
Fund Options |
Fees (p.a) |
3 year returns |
|
Defensive |
0.20% |
0.2% |
|
Conservative |
0.63% |
4.0% |
|
Balanced |
0.64% |
10.2% |
|
Growth |
0.99% |
11.0% |
|
High Growth |
0.99% |
11.0% |
|
International Shares |
0.89% |
15.3% |
|
Australian Shares |
1.20% |
15.6% |
Administration Fees: $97 + 0.29% of your account balance
Note: Other fees may apply.
Future Super
“We seek impactful investments creating systems change. We exclude investments with harmful impacts on people or the planet."
Image source: Future Super
|
Fund Options |
Fees |
3 year returns |
|
Balanced Index |
0.885% + $60 $502.50 per year on a balance of $50,000 |
11.67% |
|
Balanced Impact |
1.501% + $60 |
10.95% |
|
Renewables Plus Growth |
1.501% + $60 $810.50 per year on a balance of $50,000 |
11.92% |
Note: other fees may apply.
Verve Super
“Verve is Australia's first superannuation fund for women, by women. Our mission is simple, to build the financial power of all women.”
Fees:
Administration Fee = $1.15 p/week = $60 p.a. (Balance below $5000? This weekly fee won’t be charged) + 0.775% p.a.
Investment fee - 0.300% p.a.
Note: Other fees may apply.
Returns:
3 year returns = 10.84%
Have you made the switch to an ethical superfund recently, or has this article sparked motivation to do more research? Share your experience with us via @tripod_coffee, we would love to hear your stories!
Remember, when you make the switch to invest responsibly and ethically - tell the company which you are switching from the reason why you are divesting your funds. Make sure it is recorded on the phone or via a feedback form that you are making the conscious choice to invest in positive change for this planet.
If you've stumbled across this and you aren't familiar with Tripod Coffee, we're Australia's most responsible online coffee brand. Beyond delicious coffee (Nespresso® compatible pods and specialty instant coffee), we offer compostable pods with a complimentary composting program for used pods, as well as various tree planting programs with all your purchases. Shop here (https://www.tripodcoffee.com.au/products/nespresso-compatible-coffee-sample-pack-60-capsules).
Learn more about your super fund and if their policies invest in coal, oil and gas via Market Forces comparison table.
Resources:
https://www.choice.com.au/money/financial-planning-and-investing/superannuation/articles/australian-ethical-super-funds
https://www.marketforces.org.au/campaigns/super/
https://www.sciencedirect.com/science/article/abs/pii/S004016252100860X https://www.news.com.au/finance/superannuation/what-information-you-should-be-demanding-from-your-super-fund/news-story/2d88c769f235dbd0b90d21fd70d6cab6
https://www.news.com.au/finance/superannuation/what-information-you-should-be-demanding-from-your-super-fund/news-story/2d88c769f235dbd0b90d21fd70d6cab6
https://www.crueltyfreesuper.com.au/https://www.australianethical.com.au/blog/weve-divested-from-marsh--mclennan-for-supporting-adani/?fbclid=IwAR33ep8cb7Ye9fUjxkhSed3EgN6Hw6TC8dU4R2peAHssYQtYc7cS6pMn2mw
https://wanganjagalingou.com.au/
https://vervesuper.com.au/
**As a final note, these are just a few of the more ethically minded superfunds. Please do your own research to better understand financial products, fees and benefits, associated.
