What is socially responsible superannuation?
Socially responsible superannuation providers consider environmental, social, corporate governance and ethical factors associated with your investment in addition to financial return. Socially responsible superannuation providers will generally have a clear stance on issues such as climate change, animal welfare, human rights and clean energy. They will be transparent about companies they avoid, which may include those involved in fossil fuels, weapons, tobacco, native forest logging and human rights abuses. They will also be clear about companies they support, which may include those involved in clean energy, recycling, energy efficiency, education and sustainable products. In addition to transparency about their stance and investments, responsible superannuation funds might take or fund direct actions such as planting a tree for every new investment or account opened, or owning their own wind farm.
Why invest in socially responsible superannuation?
There are many reasons to invest in socially responsible superannuation funds, including both personal and bigger picture benefits such as:
- investing in line with your values – using one of your largest investments to facilitate positive change
- healthy financial returns
- plenty of choice, including low risk investment options
- facilitating social change as businesses alter their practices to attract your investment.
How to invest in socially responsible superannuation
Choosing socially responsible superannuation might seem like a chore, especially if you are not particularly interested in your superannuation, but it does not need to be complicated.
Step 1: Find out where your money is invested
An easy way to start is by checking your superannuation statement to see where your money is currently invested. If the nature of your investments isn't clear contact your provider for clarification. If your provider is not transparent about where it invests your money, you might prefer to choose one that is.
Step 2: Research your options
If your superannuation provider doesn't offer responsible investment options, there are plenty that do, and moving your money is generally straightforward. Look for financial advisers and investment products with Responsible Investment Association Australasia certification. You might also find the independent Super Ratings sustainability rating useful.
Step 3: Tweak your investments
Whether you shift part or all of your money to a new option with your current provider, or a new provider altogether, a small change to your investments can have a big impact, on issues you care about. There are many options when it comes to socially responsible investment, so think about the causes (environmental, social and so on) that are most important to you and find a provider with practices that align with them.