Is your super fund managing its climate change risk?

The urgency of tackling climate change and putting your money into financial products that act to mitigate or adapt to climate change is only getting more important in Australia. But how can you go about finding out if your superannuation fund is investing in line with your expectations?

Stuart Palmer, head of ethics research, Australian Ethical

Australian Ethical Investments, a company which has $2.8 billion in assets under management through its superannuation and managed funds products, has proposed a list of questions you can ask and hopefully find answers for yourself when it comes to assessing your super fund’s actions on climate change.

“The aim here is for people to reflect on their choices and their impacts and obviously to ask them, to suggest that they do this in the context to their investment and superannuation,” says Stuart Palmer, head of ethics research at Australian Ethical. “We think it’s particularly important to send that message with regards to superannuation. People lack engagement with it, distant from them, and obviously that’s right in some sense, but it has an enormous impact on their financial future and the world they’re going to live in in the future.

“More broadly, in terms of what we’re seeing amongst superannuation members generally and our peers in the investment industry, that’s where their experiencing something of an awakening. It’s mixed, and some super funds are being more responsive I think.”

Australian Ethical has proposed four questions that you can answer yourself or through research:

  1.  What companies is my super fund invested in?
  2. How does my super fund decide where to invest?
  3. Does my super fund compromise on financial returns to invest responsibly?
  4. Should I raise investment concerns with my super fund?

While engaging with your super can be daunting, Stuart points out that a lot of power is in your hands, because you’re the consumer and you have a choice.

“I think we all do, as individuals, as private members of organisations, as voters, etc.,  and I think it’s across economy and across society,” Stuart says. “It’s not a big ask and it’s not a surprising ask, but it’s about what we’re trying to achieve w/ our choices, and are we achieving that w/ our choices? Ninety-nine percent people are going to think that impacts on people, animals and the environment are important to them, and those choices are powerful, they determine how the world turns, and we all have a responsibility to turn our minds to those things.”