Ethical funds register helps avoid profit without honour
Australian Financial Review - SPECIAL REPORTS - YOUR SUPER
If you want your super to go into a fund that invests in things you care about, help is at hand, says Miriam Hechtman.
“The earth is the Lord’s and everything in it, the world, and all who live in it.” Psalms 24:1Investing your money according to a psalm from the Bible may seem strange to some but “Putting your money where your faith is”, is a growing industry. Combining your personal values with investment options can be tricky but there is advice on offer.
The term SRI refers to sustainable responsible investment or more broadly, ethical investment. This approach to investing considers the investment’s social and environmental repercussions, as well as the likelihood of it making a profit. In response to the growing request for assistance in investing ethically, in September last year the Ethical Investments Association introduced the SRI industry certification program, in partnership with the NSW Department of Environment and Conservation and the Victorian Government.
EIA executive director Louise O’Halloran says the purpose of the certification was “to make a place where people can go and find lots of information”. The SRI Superannuation Centre (located on the EIA website) gives people access to information on each fund, including the methodology of a particular ethical investment option and what makes that ethical investment option worthwhile. Similar to the Heart Foundation’s “tick” symbol, licensees of the SRI certification are able to display the SRI symbol. Since its launch, the number of licensees using the symbol is rising.
“Each category has different criteria and that’s what makes it such a robust system. We tried to find the kind of behaviours that we wanted to see happening that would make it easier at the end of the day for people to make informed choices about investing ethically, says O’Halloran. A good way to get into SRI is via an industry fund, says O’Halloran, because you get a good combination and somebody has put together a mix for you. “Above all I would really advise people to go to see an adviser that specialised in giving SRI advice because of the amounts of money involved. It’s a significant amount of money and it should warrant having a proper adviser helping you.”
One industry fund that has received the SRI tick of approval is Christian Super, which “aims to invest in accordance with biblical principles to ensure that member funds are managed responsibly while growing for their future needs.” The industry and multi−employer fund was set up in 1984 (as Christian Schools Superannuation Fund) to serve the staff of Christian schools around Australia. It later became open to any Christian ministry organisation, and introduced ethical investment as an option in 2001. “We did that because we progressively wanted to start to take ethics into consideration,” says chief executive Paul Beckmann.
The fund did not go in “boots and all” as it did not think either the market or the regulator were ready for such a step. But it made its default option an ethical option, thereby increasing the chances of members remaining with the ethical option. The fund has undergone various changes in reviewing its investment options, especially in the past year. The most fundamental change is moving to a fully ethical investment structure from February 1 this year. Prior to this move the fund had ethical investments as options. “We built up over the period to have over 50 per cent of our members in the ethical options and so from February 1 took the position that we’d go completely ethical and so that has effectively happened with one or two small exceptions.”
As of April 1, Christian Super obtained its public offer licence. This means that the fund will shortly be open to anyone who wishes to join and have their super invested with ethical focus. “We looked at what value we can add and we saw ourselves having a unique opportunity to provide ethical investment into the Christian sector and we felt that public offer will allow us to reach that Christian community in a total sense rather than just through Christian ministry organisations. So we actually see public offer as an opportunity to grow quite strongly on the back of our approach to ethical investment.” Christian Super has only had the certification for a short time but Beckmann hopes it will guide people and ultimately help them make a decision. “For us the value of the symbol is an endorsement from a reputable organisation that we are very much going down the ethical investments route.”
