A new research report from Australian Ethical has found an overwhelming majority of Australians (83 per cent) consider climate change is occurring, and that it is being contributed to by human activities.
The effect is that Australians are becoming more conscious of where they are putting their money.
Six in 10 Australians (60 per cent) reported purchasing services or goods in a more socially or environmentally friendly way in the past 12 months alone.
Only 25 per cent indicated they had funds in a “sustainable” super fund.
Perhaps it’s due to their tangible nature, but the report revealed respondents were more likely to rank environmentally friendly toilet paper, furniture or cleaning products as having a greater positive impact than ethical super.
Furthermore, just 2 per cent expressed the belief that investing with an ethical super fund is the way they can have the biggest positive impact on the environment.
Despite the low statistics, uptake might improve in the foreseeable future, with a gauge on attitudes showing only 5 per cent of those surveyed would actually be deterred by a fund that invested ethically.
Another 39 per cent said they would be inclined to select a fund that aligned with environmentally friendly values.
For Australian Ethical’s chief customer officer, Allyson Lowbridge, the findings reaffirm “that most Australians are concerned about the climate crisis and are taking everyday actions to reduce their impact on the environment”.
“And yet these actions are so much more impactful when they’re not undermined by where their superannuation and other savings are invested,” she continued.
“For example, according to the results, Australians think more about the environmental and ethical considerations of their toilet paper than about how their superannuation is invested.”
Ms Lowbridge said that “it seems that Australians are simply unaware of the power of their money”.
“And with trillions invested in superannuation in Australia on their behalf, the potential here for transformative climate action is enormous,” she considered.
Australian Ethical noted that while a perceived lack of financial performance has often been a barrier to green finance, RIAA’s Benchmark Report 2019 did demonstrate that super funds investing ethically and responsibly can achieve the same, if not better, returns.
Explaining how a movement away from non-ethical funds could help the environment, the head of ethics research at Australian Ethical, Stuart Palmer, said “people who invest ethically are investing not only for their financial future, they’re investing for a future worth living in”.
Alarmingly, the report revealed that nearly seven in 10 Australians (67 per cent) have never heard of, or don’t understand, the term “ethical investing”.
This is despite only 5 per cent of Australians indicating that they would be deterred by a fund that invests ethically.
“By collectively moving our money, we can restrict the capital available to unsustainable business, such as coal mining and fossil fuel production, and make it more difficult for these types of companies to expand,” Mr Palmer outlined.
“By both reducing demand for their shares and drawing attention to the harm they cause, individual investors can create powerful incentives for unsustainable businesses to do better.”
The researcher highlighted on the flip side: “Ethical investors also invest in the many opportunities to protect the environment and improve people’s wellbeing.
“Not only do these investments offer great growth potential, they also have a positive impact.”
This helps all investors, he suggested, “by reducing the risk of inevitable global economic disruption if we fail to address systemic challenges like climate change”.
