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Vote with Your Dollar: Ethical Investing

By August 21, 2020 No Comments

Put Your Money Where Your Mouth Is! 

So, you’re an advocate for transparent governance, sustainability and ethical production chains? This one’s for you.   

If you haven’t heard, Mark McVeigh’s case is making waves in the ethical investing world. McVeigh bought a case against his superannuation fund in 2017 for failing to adequately consider the environmental impacts of their investments.  

McVeigh’s case against his superannuation fund, Retail Employees Superannuation Trust (REST), has caught the attention of many investors and fund managers. It stands to pave the way for further litigation and discussion on ethical investment. 

The case is currently ongoing and can be read about here. If successful, it will be a landmark case. This means it can set a powerful precedent about the types of considerations investment funds must make in its fiduciary duty to its investors. 

As climate change continues to become a pressing issue, many of us are looking for ways to show our concern for the situation and support sustainable practice 

According to the Australian Financial Review, superannuation funds will own up to two-thirds of the Australian share market within the next 20 years. Due to the massive market share of superannuation funds, movements supporting ethical super or ‘ESG funds’ can massively effect the Australian business environment.  

McVeigh’s case could have a massive impact on the operations of investment funds, but in the meantime, I have some reasons why you should consider swapping your super to a more ethical fund. 

Did you know you can vote with your dollar? 

This means much more than ditching fast fashion or buying more oat milk (but keep doing this too)! Students today will have to waiaround four decades before we access our super. Therefore, our money will be invested in these funds for a great deal of time. It’s time to start thinking about what kind of businesses we want to be supporting while we grow our savings.  

Have you ever thought of swapping your super to more ethical fund?  

An ESG fund is a fund that considers environmental, social, and governance factors in its equities or bonds. This means that the companies have positive environmental, social, and governance factors. For example, the environmental considerations invoke questions such as “how do our operational activities impact on the environment through our supply chain?” and “are we aware of our carbon emissions and are we compliant with the regulations?”. 

Holding corporations to account is something most of us support wholeheartedly and what way is more effective than voting with your dollar?  

In June, 2020 the Deutsche Bank published a study that ESG funds have outperformed or showed equal performance as their respective benchmarks during the share market crash in March” as reported by the AFR

There are many resources exploring ethical super such as; Money Magazine’s article on 14 of the ‘greenest and cleanest superannuation funds’ and The Guardian’s ‘Ethical; Superannuation: what is it, and does it actually work?”.  

It looks like the future for ethical super is bright and we hope you’ll join us in taking your finances into your own hands and putting your money where your mouth is.  

 

 

 

Jasmin

Jasmin

Jasmin is a second-year Law and Business student at QUT.

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