Nine in ten Australians expect their super to be invested ethically
Millennials are the most likely to invest in an ethical superannuation fund.
There's a huge demand among Australian consumers for more ethical investment options, with nine in ten consumers expecting their super or other investments to be invested responsibly and ethically. Plus, four in five Australians would consider switching their super if their current fund's investment strategy didn't align with their values, according to new research released today by the Responsible Investment Association Australasia (RIAA).
The report revealed that millennials are the most concerned about ethical investment, with 75% likely to invest in a super fund that considers environmental, social and governance issues. They are also the most likely to consider making ethical and responsible investments in the future.
Postgraduate student Lachlan Martin, 28, says it's important for him to understand where his superannuation is invested. Like many millennials, until recently, Lachlan had several super funds due to working across a few different industries, but has since switched to an ethical alternative.
"I decided a bit later to look into whether ethical investment was an opportunity and saw some ads for it around. I did some research and ended up with Australian Ethical based on some of the reports that they brought out about their investment choices. I’ve always been a bit of a nerd for these things. I’ve looked into where things go and I like reading statements on investment decisions."
When asked if he thinks millennials are more concerned about investing ethically than other generations, he said, "I think they would be if they were aware. The barrier for entry and barrier for knowledge for superannuation is quite high. It really feels like people are sitting back and letting the compulsory nature of superannuation do a lot of the work, which I think is a bit of a loss. I think people probably do care quite a bit about superannuation, but they just don’t know that they do yet."
RIAA CEO Simon O'Connor said the responsible investment industry is growing in response to consumer demand. "Consumer sentiment mirrors the continuing growth in the sector with responsible investment more than quadrupling over the past three years and nearly half of Australia’s assets under management now being invested through responsible investments. As more Australians show a desire for their investments and savings to align with their values, those already investing their money responsibly are enjoying strong financial performance."
However, while the ethical investment industry is growing, there is still a lack of consumer understanding as to where their super is invested. To meet this demand, RIAA has launched an online tool, responsiblereturns.com.au, which enables consumers who care about responsible and ethical investing to find products and funds that align with their personal values.
“From investing in sustainable transport and education, to avoiding investing in armaments and fossil fuels, Responsible Returns allows users to filter products based on their areas of interest and location,” said O’Connor.
- QSuper best performing growth super fund in 2018
- Here’s what the Productivity Commission’s proposed changes mean for your super
- Recent share market falls will impact superannuation returns this year
- “Most Australians will be comfortable in retirement,” Grattan Institute
- Online retailer Kogan to launch ultra-low-fee super product