“Green” Super Could Halve Australia’s Entire Household Carbon Footprint: Australian Ethical & Zali Steggall

Australia’s original climate-friendly super fund manager, Australian Ethical (ASX:AEF) and Zali Steggall OAM are urging Australians to open their eyes to the power of their super, after new calculations revealed Australians have an unprecedented opportunity to address climate change through their super savings.

The average Australian might feel their super can’t make a huge difference, but super is often the largest lump sum of savings many of us hold at any given point, with the average Australian balance ranging between $24,000 (25 years old) and $523,000 (65 years old).

And new calculations now show that if every single person in Australia put their super into a climate-friendly fund, it would collectively result in a carbon footprint reduction that is equal to half the household emissions across all of Australia.

Australian Ethical calculated that the difference between putting Australia’s $3 trillion pool of super into a climate-friendly fund, versus one that was not, was equivalent to a lower carbon footprint of around 78 million tons of carbon (CO2e) per year, or the same as:

• 4.6 million average Australian households (half the total number of households in Australia),
• 16.9 million cars on the road (close to the total number of cars in Australia of 20 million),
• 1 million tankers of petrol, or
• 3.3 million garbage trucks of waste being recycled instead of going to landfill every year (the equivalent of 3 tonnes of waste per Australian household).

Australian Ethical pointed out that ceasing to invest in carbon-intensive companies does not actually mean the emissions produced by those companies will stop occurring overnight.

However, taking money away from these companies sends a strong signal and hurts their back pocket, which can drive a positive change in their behaviour, or even render them unviable if they continue to pollute at the same levels.

This could turbocharge the impact of other efforts, such as recycling, saying no to plastic, or reducing meat consumption, says Australian Ethical.

John McMurdo, CEO of Australian Ethical, said: “It’s an alarming truth that many - if not most - Australians don’t actually know what their super funds are invested in. This means that your money could be supporting companies that completely undermine your values, like those related to climate change.

“Opening your eyes to where your money is being invested and making a change could be the fastest and most impactful thing every Australian can do, right now, to help solve the climate crisis.

“It can sometimes feel like the fate of our planet rests on individual people taking lots of small actions. But instead of just saying no to using harmful products and services, we can also use our money to remove support for their production in the first place, creating an enormous collective difference.

“And while climate change may be one of our planet’s biggest challenges right now, we’d love to see Australians opening their eyes to the way their money can either help or hinder issues in so many different areas like human rights, gender equality, and animal protections.

“An added bonus is that it doesn’t require making any personal or financial sacrifices. Ethical funds can also be some of Australia’s best performing.”

Zali Steggall OAM MP believes that leveraging money to combat the greatest challenge of our times is the most sensible thing individuals can do.

Zali Steggall OAM, Federal Member for Warringah, said: “Transferring funds to an ethical funds manager is a clear way for individuals to reduce their own emissions and broader environmental impacts whilst at the same time benefitting from these funds high average performance. It’s a win-win.”

“As a component of Warringah’s Roadmap to Zero, an initiative of my office, I encourage my constituents to consider which super fund they are with and look at all available options to make the shift. There is no doubt that if they and other Australians moved their money, we could have a tremendous impact on when we reach net zero emissions.”

To reach the above figures, Australian Ethical calculated the difference between the carbon footprint of investment in the MSCI World Index and the MSCI World Climate Paris Aligned Benchmark Select Index.

Case study

Adam Hall is a 36-year-old lifelong “greenie” who does his bit for the environment as often as possible.

At home, he recycles religiously, says no to plastic straws and other plastics, has chosen an environmentally-friendly energy supplier for his home, composts, went vegetarian for 5 years, and even calculates his carbon footprint and pays a third party (Ecologi) to offset what he emits.

At work, he manages restaurants that he ensures use carbon neutral power, never supply plastic straws or takeaway containers, and only list organic or biodynamic wines.

But despite all of his excellent efforts, it was only recently that Adam actually realised his super fund was undermining all his great work.

Quotes from Adam:

“I've been using one of the bigger industry funds for a while, as they have low fees and come recommended by budget-conscious experts such as the Barefoot Investor. However, when I actually looked at where my money was going, I realised they have no option that is authentically ethical and climate-friendly. This is just not good enough anymore, in my opinion.

“Since realising this, I've been researching new ethical super funds, as I’m definitely looking to change funds as soon as possible.

“It doesn’t make sense to be putting so much effort into ensuring my actions are as environmentally friendly as possible on a daily basis, then having my money achieving the exact opposite. I want my hard-earned cash to align with my morals, not work against them.”

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Australian Ethical (www.australianethical.com.au) is Australia’s original responsible investment and fastest-growing super fund manager, with a 34-year track record, over $6 billion in Funds Under Management (FUM), and above-market returns in its premium products.

Australian Ethical offers eight managed funds and 13 investment options in its superannuation fund. These are managed by an in-house team of investment professionals consisting of sector specialists with an average of over 16 years’ experience, and an internal ethics team with a separate reporting line. Every decision made by both teams is guided by the Australian Ethical Charter and its responsible investment philosophy. The investment team combines the most comprehensive ethical assessment process in the market with fundamental bottom-up stock analysis that goes far deeper than generic ESG investing.

Australian Ethical is rated as one of the top-performing super fund and investment managers by Super Ratings, Chant West, Morningstar, Money Magazine, Rainmaker, Forbes, and Financial Standard.

Recently, Australian Ethical was awarded:

• 1 of just 6 global leaders for ESG commitment, and the only Australian asset manager, by Morningstar
• Australian Ethical Australian Shares option is 1st over 1 year, 3, 5, 7 and 10 years in the SR50 Australian Shares Index in the SuperRatings Fund Crediting Rate Survey as at 30 June 2021
• Australian Ethical Balanced option is 2nd for 3 years (9.99%) in the SR50 Balanced (60-76) Index, and has outperformed the SR50 Balanced (60-76) Index over the 5 and 7 years in the SuperRatings Fund Crediting Rate Survey as at 30 June 2021
• Emerging Companies Fund (Wholesale) and the Diversified Shares Fund (Wholesale) 5-star rating by Canstar
• Money Magazine Best of the Best Award: ESG Trailblazer
• Finder.com.au Green Superannuation Fund of the Year
• SuperRatings Infinity Award for best sustainable super fund, best performing SR50 Australian shares option over 5 years and Gold for MyChoice Super and MySuper++
• Financial Standard Investment Leadership Award: ESG - Australian Equities

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