Feature

Smarter superannuation

G Magazine

What is your super supporting?

Piggy bank

Credit: iStockphoto

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Most people don't think about the power of their superannuation portfolio, says Anne O'Donnell, managing director of Australian Ethical Investment.

"Capital is what makes the world go 'round and if you want to change something, the way to do that is through the direction of your superannuation"

"If you can target and change the course of where your capital goes, you can get action," O'Donnell says.

Superannuation funds around Australia are starting to sit up and take notice of the backlash financial institutions are facing when they fund environmentally irresponsible ventures.

And with the amount of money in Australian superannuation passing the trillion-dollar mark in 2007, and set to reach $2 trillion in the next few years, the potential for super funds to change industries is enormous.

"If you want more focus on renewable energy, if you don't want dirty industries, think of what you can do," O'Donnell says.

Which funds are green?

Many Australian super funds already consider responsible investment principles in their approach.

At 30 June 2007, the United Nations Principles for Responsible Investment (UNPRI) group - which requires super funds and fund managers to consider environmental, social and governance (ESG) issues when making investment decisions - had 183 signatories representing $11 trillion globally; 50 were from Australia and New Zealand.

To find out just which funds have ESG principles, the Web is the best place to start.

The Responsible Investment Association Australasia site details how much money member funds have put into responsible investment (as a proportion of their total funds size) and also looks at their investment approach.

SuperRatings ranks the environmental, ethical and sustainable credentials of the different funds. The Ethical Retail Superannuation Fund won SuperRatings' inaugural Infinity Award for its ethical and sustainable policies.

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