Ethical funds not ambitious enough: Future Super

Future Super's new Impact Report has revealed two of the funds three investment options abates more carbon dioxide per investor than if that person were to go vegan and live car-free.

Speaking to Financial Standard, Future Super founder and managing director Adam Verwey said the fund expects its portfolios to be significantly less carbon-intensive than other super fund portfolios, because it excludes fossil fuels. But the portfolios actually went further than that.

"Our portfolios abated more carbon than was produced. When you look at our impact report and then you look at supposedly ethical funds who are hoping to de-carbonise their portfolios by 2050, you start to think those superfunds don't look very ambitious in the targets they've set," he said.

Verwey believes the ability for super funds to de-carbonise their portfolios already exists and they could act on these environmental principles much more quickly.

The Future Super Impact Report used polling to find out how people wanted their super to be invested and found that a majority of Australians expressed concerned about their money being invested in fossil fuels, gambling, weapons and live animal exports.

Future Super offers members three investment options.

The balanced index option excludes investments that don't meet the fund's ethical requirements and has a 3-4% exposure to renewables; and the balanced impact option actively invests in renewables, healthcare and IT and has an 8-10% exposure to renewables.

At the most environmentally friendly end of the scale, the renewables plus growth option has a stated focus on investing in the transition from fossil fuels to renewable energy and has 20% exposure to renewable energy.

Verway revealed he has his own super invested in the renewables plus option.

"Climate change is what's really important to me, climate change is the reason I founded Future Super in the first place. So it's very natural for me to choose that option and put my super towards funding the clean energy transition," he said.

In urging more super funds to create investment options that save carbon emissions, Verwey was critical of those who stay invested in fossil fuel companies while claiming to impact the corporate behaviour of those companies positively by being active investors.

"It's not true that through corporate engagement you can turn a fossil fuel company into an environmentally friendly company. Fossil fuel companies are actively engaged in destroying the planet and no amount of shareholder engagement will change that," Verwey said.

Read more: Future SuperAdam VerweyFuture Super Impact ReportEthical SuperRIAA
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