If your super fund invests heavily in fossil fuels, you may be missing out on higher returns, with new figures showing investments in renewables performed better than average in 2015.
New estimates from superannuation research firm Chant West show that balanced investment funds returned around 5.7 per cent on average in 2015, with Future Super, a fund that avoids any investment in fossil fuels, returning 7.04 per cent. Another such fund Australian Ethical, which also limits investments in fossil fuels, returned 6.5 per cent over the last calendar year.
These figures illustrate how investments in renewables may not only be an ethically or environmentally responsible move for our future, but also a financially prudent one, given the higher returns.
“Fossil fuel-free investment strategies continue to prove themselves as the responsible investment strategy to protect and grow members’ retirement savings,” said Future Super’s Managing Director Simon Sheikh.
According to the Thomson Reuters/Future Super Australia Fossil Free Index, fossil-free investment strategies returned 4.96 per cent in 2015, whilst the broader share market returned only 2.12 per cent.
Tom Swann, a researcher at the Australia Institute, says funds that invest heavily in the fossil fuel energy sector have lost money over the last three years.
“A lot of the large funds are doing next to nothing and that’s just not doing their job properly,” he said. “That’s putting people’s retirements at risk.”
To illustrate this further, Swann pointed out that the Bill and Melinda Gates Foundation would have been $1.9 billion better off if it divested from fossil fuels earlier. He added that fund managers should consider divesting from fossil fuels or at least try to change fossil fuel companies’ behaviour in order to better look after retirees’ futures.
“But most are doing nothing and assuming it will all be good,” he said.
Read more at The Guardian
Read more about the top 10 super funds ranked by known fossil fuel free investments
To find out more about switching to fossil-fuel-free super, please visit Super Switch.
Does your super fund invest in the fossil fuel energy sector? Would this information make you think twice about where your money is invested? Is it time to change where your money is being invested, not only for future posterity, but also for your own prosperity?