Unleash Your Super Power: Navigating the Complexities of Green Superannuation
The Power to Change the Future Lies in Your Hands
Imagine if every Australian could wield the power to shape a sustainable future with their retirement savings. But here's the catch: many superannuation funds are still investing in fossil fuels, which could hinder our progress towards net zero emissions. So, how can you ensure your superannuation (super) is working for the environment and not against it?
The Scale of the Issue
Australians have a collective $4.5 trillion invested in superannuation, according to the Australian Prudential Regulation Authority. This is a significant pool of capital that can influence the real economy, from energy transition to infrastructure and industry. However, many super funds are still investing in companies with plans to expand coal, oil, and gas production, which can harm the climate and environment.
The Controversy: Greenwashing
Aware Super, Australia's third-largest pension fund, recently announced it would lift restrictions on investment in carbon-heavy companies. Meanwhile, UniSuper was accused of greenwashing after halving environmental criteria for its 'sustainable' investment option. This raises questions: how can we trust that our super funds are genuinely committed to sustainability?
The Power of Individual Choice
Australians have the power to make a difference. They can choose where their savings are invested and engage with their super funds to understand the impact of their investments. By prioritizing environmental and climate action, individuals can influence the direction of super funds and drive change.
Prioritizing Environment and Climate Action
A recent global study suggests younger generations are increasingly interested in fund options that prioritize environmental and social issues. Nearly all surveyed Gen Z (99%) and millennial (97%) investors said they were interested in sustainable investing. This highlights the importance of super funds aligning with members' values and the need for funds to prioritize environmental and climate action.
Taking Action: Screening and Voting
Super funds can influence companies in two main ways: screening and voting. Screening involves using criteria to choose which companies to invest in, such as excluding investments in fossil fuels or proactively investing in the energy transition. Voting at annual general meetings allows funds to raise issues and vote on behalf of members.
The Role of Members
Members play a crucial role in driving change. They can contact their super funds directly to find out what they're invested in and put pressure on funds to take bolder climate action. Every time a member calls, emails, or tags their super fund in a social media post, it has an impact. With super balances adding up to hundreds of thousands of dollars, it's worth taking the time to ensure investments align with values and financial objectives.
The Way Forward: Transparency and Engagement
Super funds are required to disclose their investment holdings every six months, and from July, the sector will be incorporated into Australia's mandatory climate reporting. This provides an opportunity for members to understand the impact of their investments and engage with funds to drive change. By checking green claims and engaging with super funds, individuals can ensure their retirement savings are working for a sustainable future.
