One of the easiest entry points in becoming an ethical investor is to make sure that your superannuation is working for you ethically.
Superannuation as an investment class, lends itself perfectly to allow the individual to support the development of a cleaner and more efficient way of doing business, towards true sustainability.
It is a long term investment vehicle, and continuous and ongoing support for super is mandated via the compulsory superannuation guarantee, and through the government co-contribution. Whether an individual has or has no access to money, most at least have access to a superannuation investment, many in fact have a number of super investments.
Much super is currently undirected, its owners taking a passive approach to controlling investment decisions taken by the managers of their funds. Collectively, these funds have an enormous power and ability to make a difference to current and future business practices.
Ethical super is accessible via the following sources:
1. Direct through a commercial Manager.
2. Via a commercial ‘Master Trust’ which offers the ability to invest across different managers and investments under one trustee/platform.
3. ‘Industry’ super funds. More funds are starting to offer a ‘generic’ ethical investment option to members.
4. Self Managed Super a.k.a. Do It Yourself or D.I.Y. Super.
As a member of an externally managed fund you still have the ability to influence your fund Trustees to exercise their right to vote at meetings of companies whom they invest in on your behalf. Positive action can still be driven, and to some extent it may have a greater impact as typically super fund Trustees manage holdings that may carry many votes.
As in traditional investing, it is important to look into the underlying managers’ investment strategy/ies to ensure that you are comfortable with how your money is invested as not all managers have the same idea of what constitutes ethical investment.
