Many of us are keeping our food waste out of landfill or driving less to reduce our carbon footprint, and in turn, play our part in tackling climate change. However, you might not know that ensuring we have an ethical super fund is one of the most effective ways to reduce our carbon footprint.
You might not view yourself as an investor, but your retirement savings are actually being invested for you by your super fund! So how does it work? Super funds are designed to generate long-term returns for your retirement funds. To achieve this, super funds will invest their members' money in infrastructure, banks, fossil fuel companies, equities, and more in Australian and international markets.
An analysis by The Australian Conservation Foundation reveals that 15 of Australia's largest super funds have collectively invested more than a whopping $25 billion into new and expanding fossil fuel projects. Essentially, you could unknowingly be funding fossil fuel projects with your retirement money if you're not across your super's portfolio. If you're someone who doesn't want to see more fossil fuel projects, you can make sure your money isn't being invested in just that!
How can we make sure our super funds align with our values?
There are many factors to consider when choosing the best super fund for you, including the fund's performance, fees, cost, and your values. We're focusing on whether or not your fund invests your money in fossil fuel companies but this doesn't mean you shouldn't consider all factors when making your choice.
Since portfolio-holding disclosure statements from super funds can be overwhelming and difficult to navigate, we've rounded up a list of super funds that contribute to the problem and those that are ethical and are striving to make a positive environmental impact. You can choose to send a message to your super fund if they are unethical by divesting your money in support of no fossil fuels!
Australia
If you're in Australia, you can check if your super fund is actively funding environmental destruction on the Market Forces website. It will tell you if your super fund is investing in companies with the biggest plans to expand the scale of the fossil fuel industry, and if so, to what extent.
At 1 Million Women, we love Verve Super, where your retirement money is invested in companies that support gender equity and climate action.
Funds/options that don't make investments in fossil fuels
- Australian Ethical
- Aware Super (Diversified Socially Responsible Investment Option)
- Catholic Super (Positive Impact Option)
- Cruelty Free Super Growth
- Future Super
- Hesta (Sustainable Growth Option)
- Uni Super (Sustainable Balanced Option)
- Verve Super
This list is via Market Forces.
If you don't want your retirement savings to be invested in fossil fuels, here are some funds to avoid
- Active Super (High Growth Option)
- AMP (MySuper Option)
- Australian Super
- Aware Super (High Growth Option)
- Australian Retirement Trust (Lifecycle Balanced Pool Option)
- Brighter Super (MySuper Option)
- Care Super
- Cbus Growth
- Commonwealth Super
- Colonial First State
- Equipsuper (MySuper Option)
- ESSSuper (Growth Option)
- GESB (My West State Super Plan Option)
- Hesta (Balanced Growth)
- Hostplus Balanced
- IOOF (Balanced Investor Trust Option)
- Mercer
- Mine Super
- MLC
- NGS Diversified
- Rest (Core Strategy)
- OnePath ANZ
- Spirit Super
- State Super
- Super SA
- Telstra Super
- Unisuper (Balanced option)
- Vision Super
US
The 401(k) savings plan in the US is a similar scheme offered by employers to employees, where your savings can be invested for your future retirement.
You can consult this list of ethical investment firms or use As You Sow's or Fossil Free Funds'free online tool to analyse how your 401k or personal investments contribute to climate and social impact.
UK
If you're in the UK, you can use these tables from The Good Shopping Guide and Ethical Consumer to compare different pension funds in terms of how ethical they are and whether or not they are involved in unethical environmental practices. Make Your Money Matteralso published a 2024 report that ranks pension providers based on their climate action plans. It would also be wise to seek guidance from a financial advisor at Ethical Investment Association.
Pension providers offering ethical funds
- Pension Bee
- Aviva
- Nest
- Legal & General
Pension providers with unethical funds
- Mercer
- The People's Pension
- Nutmeg
- Hargeaves Lansdown
- SEI
Sources: The Good Shopping Guide; Ethical Consumer; Make Your Money Matter
Reminder!
Moving to an ethical superfund means that you are giving support to essential sectors leading progressive change – such as healthcare, renewable energy companies, etc. Remember, there is no single best super fund that will work for everyone, so it's important to seek financial advice and weigh your options. When you make a switch to other superfunds, let your superfund know why you're leaving them!
Note: This article is simply a guide and does not constitute financial advice. Please do your own research into superannuation and seek professional advice if needed. Superannuation is a personal choice
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