The world has woken up to ethical investing.
Businesses, consumers and investment funds are increasingly striving to make a positive impact on our planet and the people living on it – not just making mountains of money.
Driven by a new generation of ideological investors, growing awareness of social and environmental issues, and the promising performances of ethical funds, it’s now easier than ever to align your values with your investments.
In this article, we run the numbers, break down what ethical investing might mean to you, and give you some pretty compelling reasons why you need to get involved with the ethical business boom.
Green is the new black
Ethical investing is coming of age. With a growing awareness of climate change and broader environmental, social and governance (ESG) issues, investors are much more discerning when it comes to what their money is supporting. These days, there are more ways to invest ethically, responsibly and sustainably than ever before. Funds like Cruelty Free Super are taking a more proactive approach to screening their investments to avoid companies that have a negative impact on society and the environment (see Cruelty Free Super’s investment screens here).
And the numbers add up. According to the Responsible Investing Benchmark Report 2022, most Australians expect their superannuation or other investments to be invested responsibly and ethically.
In the past three years, it’s also been reported that investments in funds with a ESG considerations has grown to well over $1,500 billion.
But where is all this growth coming from? The ethical investment boom has been spearheaded by a new generation of savvy investors – particularly gen Xers and millennials – who are aligning their investment choices with their personal values.
But it’s not just the younger generations who are citing the importance of sustainable investing, 74% of investors say that sustainable investing is so important to them that they would consider changing providers if they learned their super fund was investing in companies inconsistent with their values.
And while millennials seem to be leading the charge (86%), Gen X-ers (79%) and Baby Boomers (67%) are also jumping on board the ethical investment bandwagon, with the percentage of each generation rising considerably in the past five years.
Around the world ethical investing and ESG is clearly in a boom. Ethical super funds are increasingly gaining popularity, and there are more opportunities than ever to incorporate your ideologies into your investments.
And thankfully, there are funds out there who are going a step further than taking just a broad-brush ethical approach to their investments.
What does ethical investing mean to you?
Ethical investing means different things to different people. It could mean avoiding companies that have a negative social or environmental impact. This is called “negative screening” and it might mean screening companies involved in animal cruelty, coal-seam gas, gambling, tobacco, detention centres, or uranium mining.
You could also take a more proactive approach and invest in companies you believe have a positive social or environmental impact. This is called “positive screening”, and would involve purposefully selecting companies doing good things - like recycling, waste management, renewable energy, or animal rights.
If you’re like most of us, and you don’t have the expertise or time to analyse and select companies yourself, you can invest in an ethical listed investment company (LIC), or an exchange-traded fund (ETF) with a basket of assets picked by a professional manager.
Choosing a fund that cares about animals
We all have superannuation, which means we’re all investors. Importantly, this means we all have a choice in where our investments go and what they support.
If you’re ready to align your super with your ethical values, Cruelty Free Super might be your answer.
Cruelty Free Super was created a decade ago as the first super fund to avoid harm and exploitation of animals by not investing in companies that are involved in animal testing. Today we have added to this with a broader range of ethical screens, excluding companies involved with live animal export, mandatory detention centres and gambling on horse racing. See our ethical investment screens for more information.
When you switch to us, you can rest easy knowing your super is being screened from supporting these harmful industries. No more animal testing for cosmetics, hunting, animals in sport, or live animal exports.
But it’s not just ethical investing we’re passionate about. We’re also committed to doing everything we can to grow your super, helping you take more control of both the planet’s and your future. Make the switch to Cruelty Free Super now.
Disclaimers
We love writing about cruelty-free investing and creating a kinder world, but please be aware that the information provided is general in nature, not personal or financial advice. When we discuss companies, it's not a recommendation to buy, hold or sell shares in that company. If we mention returns, please remember that past performance isn't a reliable indicator of future performance. Before acting on any information provided, you should consider if it's appropriate to you.
About the author: Noelle Greenwood
Noelle has been a passionate advocate for human rights since she walked her first 'walk against want' as a 10 year old. Her formative years were spent under her parent's wing in rallies, marches and kazoo-bands. All of this in the fairly conservative region of North Queensland, it's needless to say that activism is in her blood. As she's transitioned into making more conscious consumer choices across different aspects of her life, she's become more and more interested in the plight of creatures who are systematically harmed, exploited and killed for no good reason. Noelle likes to write about human rights, animal rights, climate change, feminism, indigenous issues, LGBTIQ issues, and generally anything that will spark a healthy argument with some of her right-wing acquaintances (the ones that are up for a healthy argument, anyway!).
