If you'd like your super money to make a difference to the world as well as to your future, ethical investing may be for you.
Almost 7 in 10 people want the environmental, social and governance issues of the companies their super is invested in to be considered along with maximising financial returns. In 2013 the figure was closer to 5 in 10, indicating that Australians increasingly like the idea of ethical investment1.
You may be among them, but do you understand what it is and how it works?
Ethical investing explained
In broad terms, ethical – or responsible – investing is when an investment is selected based on its financial performance as well as its position on environmental, moral, social, health, or political matters. Some examples of factors companies might be screened for include:
- Human rights abuses and worker exploitation
- Testing on animals
- Environmental pollution
- Selling harmful products such as tobacco, alcohol or weapons
- Corporate governance issues such as gender diversity at board level and transparent executive pay structures.
1 Responsible Investment Association Australasia, From values to riches: Charting consumer attitudes and demand for responsible investing in Australia 2017, pg. 6, figure 2.
2 Responsible Investment Association Australasia, Responsible Investment Benchmark Report 2016.