Latest news with #AustralianEthical
The Guardian
21-05-2025
- Business
- The Guardian
It's time to ask: do you know what your super is really supporting?
Almost every Australian has money in superannuation. With a total of $4.2tn held in super at the end of 2024, ours is one of the world's largest pension markets. That's some serious buying power, and therefore influence, that super funds have. But is that money doing harm or doing good? Will van de Pol pays close attention to the actions of super funds. As the CEO of Market Forces, he helps hold Australian financial institutions to account for their roles in practices that harm the environment and exacerbate climate change. 'Unfortunately, most super funds don't make it easy for the average punter to wade through the thousands of lines of data to get to the truth,' van de Pol says. To counter this lack of transparency, Market Forces analyses how much Australia's big super funds are investing in the world's biggest climate wreckers. At the end of 2023, more than $39bn held in the default or largest investment options with 30 of Australia's largest super funds was invested in companies that were driving climate damage with their coal, oil and gas expansion plans, Market Forces research found. However, van de Pol says, it doesn't have to be this way. The eight largest super funds manage the majority of our retirement savings, and in March 2024 they collectively owned almost 25% of Australian listed shares. This is our money being invested. And by extension, we have a role in what happens to it. Alison George is the chief impact and ethics officer at Australian Ethical, a Certified B Corp super fund that believes in steering capital towards companies that are doing good and away from those that aren't. Its ethical charter governs where and how it invests, with guiding principles that align with UN sustainable development goals. 'For most people, it might be difficult to touch those issues,' George says, 'but their superannuation money is one of the things that lets them have some power.' With so many shares under their control, van de Pol says, Australia's big super funds have significant power to influence how companies act. 'That's where our power comes in,' he says. 'Our power as a collective community that is ensuring that our retirement savings are being used in a way that shepherds our economy to a stable warming outcome and provides a world worth retiring into.' George says: 'Large investors, like super funds, do have quite a lot of power. As an individual or a shareholder, you don't have the ability to open all the doors that a big investor can. When [large] investors then also collaborate and align around things that matter and work with civil society and not-for-profits, they can take that even further.' In listed companies, every shareholder typically has the right to one vote per share, so if a super fund holds lots of shares, it may be able to sway a company's decisions. However, shareholders – including super funds – can abstain from voting, allowing choices to be made without challenging them. Van de Pol says: 'The vast majority of funds are failing to use that power to push polluters far enough and fast enough on climate action. We can see that by the fact that companies are continuing to drive up real-world emissions by pursuing new oil and gas projects.' Withholding votes against actions such as these, he says, effectively constitutes an endorsement. When members challenge their super funds over fossil fuel investments, the most common response is that the funds are hoping to change big-polluter behaviour from the inside. 'That's awesome and great if they're delivering on that promise, but it is not how we are seeing things play out at the moment.' Since 2022, Australian funds have been legally required to disclose their investment holdings, including the name, market value and proportion of assets in each portfolio. This information is usually listed on funds' websites, though there's no requirement that they make it easy to find. If you want easy-to-access information, Market Forces research is a good start. Many of us try to do the right thing about our consumption choices George says: 'It's important to recognise that it's your money and it's a big choice. Many of us try to do the right thing about our consumption choices. You may as well put it into something that's a big choice that maybe makes a difference.' George says a lack of clear information from some funds can itself reveal something about their actions. If your fund is making ethical investment decisions, they'll be upfront about it, she says. 'They will want to talk about it, because it's something that they're committing business resources to doing.' When we start working, our employer has to make super contributions on our behalf, and may use a default fund if we don't nominate one. That means many Australians are put into a fund, and may never have taken a close look at it. The good news is almost all of us have the right to choose a different fund – and it's easy to switch. Using an analysis tool such as Market Forces or Responsible Returns can help members find out what their super funds are doing and find funds that better suit their ethical positions. The process of switching is relatively simple. At any time, you can choose to join a new fund and notify your employer so they can pay contributions to your new account. If you have accounts with multiple super funds, you also have the option to consolidate them into a single account. You may want to seek independent financial advice to help with your decision-making. Van de Pol says the degree and ease of choice should give Australians hope that their super can do good. 'That hope comes from the power that we have as individuals,' he says. 'Collectively, making decisions to align our finances with our values has the power to shift the entire superannuation industry into gear.' Super funds have an obligation to act in the best financial interests of their members, van de Pol says. 'So, it is really up to all of us to make our voices heard and ensure that that giant multi-trillion-dollar pot of money is held to account and is directed in a way that delivers us a stable and clean world to retire into.' Learn more about how Australian Ethical can invest your money to help build the future you want for yourself, your family and the world. This information is general in nature and is not intended to provide you with financial advice or take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the PDS and TMD at Issued by Australian Ethical Investment Ltd (ABN 47 003 188 930, AFSL 229949)
The Guardian
07-05-2025
- Business
- The Guardian
Ethical super fund says QBE ‘not joining the dots' between fossil fuel projects and rising premiums
An ethical super fund is pushing for QBE to overhaul its coverage policies amid criticism the insurer can underwrite fossil fuel projects without restriction while blaming the climate crisis for steep premium rises. The critique comes ahead of QBE's annual general meeting in Sydney on Friday, and against a backdrop of rapidly rising premiums that has priced some households out of insurance coverage altogether. Homes in flood and fire-prone areas have been subject to huge insurance cost increases, and in some cases homes have been deemed uninsurable, as climate-driven disasters hit more frequently and with greater intensity. Australian Ethical's Amanda Richman said QBE's policies allow it to underwrite new oil and gas projects without any restrictions to at least 2030, and in some cases out to 2040, making it an outlier among insurers. She said while QBE says it engages with its fossil fuel clients, the approach appears to be 'little more than a data collection exercise that serves to delay accountability'. 'We're not seeing any suggestion that QBE is prepared to escalate where there is a lack of progress,' Richman said. Bar chart showing contribution of insurance to CPI calculations She said the Australian-based global insurer 'was not joining the dots' between support for fossil fuel projects and the need to reduce climate risks. Australian Ethical held $56m worth of QBE shares at the end of January. There are no resolutions listed at QBE's upcoming AGM specifically targeting the insurer's underwriting policies. Fund managers often publicly raise such issues to gauge support from other investors, before taking more forceful action such as seeking the removal of directors, or voting down remuneration arrangements. Insurance premiums for numerous categories, including house, home contents and motor vehicle insurance, have rocketed in recent years with near annual double-digit increases, pressuring households and fuelling inflation. Insurers have blamed extreme weather events, increasing home values in high-risk areas, high inflation and rising reinsurance premiums for some of the steep increases. skip past newsletter promotion Sign up to Breaking News Australia Get the most important news as it breaks Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion A QBE spokesperson said the insurer regularly assesses a range of material risks, including global heating. 'Our approach to addressing key environmental and social risks across our underwriting and investments activities is set out in our environmental and social risk framework,' the spokesperson said. 'Engagement remains a key component of our climate strategy as we seek to understand our stakeholders, and we continue to support their transition through existing products and services and offering new ones.' QBE said in its annual report that climate change is one of its top risks. While a growing number of insurers, lenders and coal, oil and gas companies state their support for the landmark 2015 Paris agreement, many policies allow for the development of new fossil fuel reserves. According to Intergovernmental Panel on Climate Change analysis, greenhouse gas emissions from existing fossil fuel infrastructure are more than enough to push the world beyond its climate goals. To improve the chances of limiting global warming to 1.5C above preindustrial times, emissions need to be reduced by 45% by 2030 and reach net zero by 2050. A parliamentary committee recommended last year that the government create a levy on coal and gas extraction to be invested in disaster mitigation and used to offset the cost of rising insurance.
The Guardian
17-04-2025
- Business
- The Guardian
Can your super be good for you and the planet?
Australian superannuation funds invest trillions of dollars held in 22.2m member accounts. Our money makes things happen. It's invested in everything from infrastructure, equities, property, retail and banks to gambling, tobacco and fossil fuels. Anyone concerned about social harm, human rights, environmental degradation or climate change might want to look closely at how and where their money is invested. If you're making choices in your everyday life to do better, such as by choosing certain brands, recycling or using renewable energy, consider how this could be amplified by directing your retirement savings into projects and businesses that do good on a bigger scale. Funds differ in their approaches to ethical investment. One fund, or investment option, might only screen out certain sectors, while another might also look for companies and projects that do good, and allocate capital towards them. Lots of different labels are used to describe investment approaches, which can make it difficult to assess at a glance how ethical a fund is. The lines are blurred between the terms ethical, sustainable and responsible. Some approaches sound good but may not be what you are looking for. Applying an ESG (environmental, social and governance) filter, for example, is about assessing financial risk rather than making judgments based on ethics, and could lead to portfolios containing companies you don't approve of. It's also worth noting that ethics vary from one individual to the next. What you consider ethical and what a fund considers ethical may not be the same thing. Look at the investment options in most super funds and you'll find a range of categories to choose from. These categories are often focused on your stage of investing and appetite for risk, rather than the ethical nature of the investments. Even when super funds offer choices, most are primarily focused on returns. You'll find high-growth (and high-risk) investment options, or more conservative options with lower risk, often favoured by people close to retirement. Some funds also offer ethical investment options. Australian Ethical specialises in them; investments in sectors such as fossil fuels, nuclear energy and tobacco are restricted, while investments in sectors such as renewables, healthcare and IT are supported. How ethical investments are chosen varies between funds, and between investment options within funds, but the goal is always to get good returns as well as invest ethically. Since March 2022, super funds have been obliged to provide publicly accessible twice-yearly portfolio holdings disclosure statements, which outline the composition of the investment options they offer. However, if you're not a finance nerd, these statements can be overwhelming. Luckily, they are not the only tools at your disposal. You may find reports on ethical funds in the media. The funds themselves can also be a source of information; many are keen to explain their different approaches to investing, and offer detailed information about their ethos and investment choices. The Responsible Investment Association Australasia (RIAA) ranks ethical super funds on an investment scorecard in its annual responsible leaders report. Organisations such as Market Forces, which exposes institutions financing environmentally destructive projects, or Choice, can also help you determine if your super fund or investment option is the right one for you. Research has found that many ethical funds or investment options perform just as well as, if not better than, standard superannuation offerings. The fund researcher SuperRatings benchmarks the performance of super funds with ethical options, and in 2024 ranked Australian Ethical's Australian shares option number one for returns over 10 years out of 39 funds. The ATO, Canstar and Finder all offer comparison tools through which you can see how your fund is performing. If you're unhappy with the ethics of your fund's investments, the Responsible Returns comparison website can help you find an ethical super fund that meets your criteria. Learn more about how Australian Ethical can invest your money to help build the future you want for yourself, your family and the world. This information is general in nature and is not intended to provide you with financial advice or take into account your personal objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances and read the PDS and TMD at Issued by Australian Ethical Superannuation Pty Ltd (ABN 43 079 259 733, RSE L0001441, ASFL 526 055).
