Maria Loyez

Switching your superannuation or investments to an ethical fund delivers one of the largest impacts that an individual can make towards reducing their carbon footprint, according to a new whitepaper published by Australian Ethical yesterday.

Financial advisers have reported a growing appetite from their clients to invest responsibly, with a recent survey showing 52 percent of clients in 2022 requested that environmental issues be considered for their portfolios. Renewable energy, climate change and reducing carbon emissions were the three most recurring themes in these conversations.1

A little goes a long way: how to reduce your carbon footprint includes research from the UTS Business School that measures and ranks the most effective actions that individuals can take to fight climate change, and Lonergan Research provides insights on Australians’ attitudes towards climate change.

Switching $50,000 of your super or investments to a responsible fund with a low carbon footprint was ranked third in a wide list of actions that clients can take to reduce their individual carbon footprint, behind only installing solar panels and switching to a renewable energy plan.

Surprisingly, the research revealed that only two in five Australians identify as an investor, despite 86 percent having their retirement savings invested in a superannuation fund.

Taking a close look at super fund holders, one in five (19 percent) haven’t switched funds due to concerns about greenwashing, a figure which increases for high value investors, and one in four (25 percent) say they do not understand the impact super funds and investments have on climate change, and this holds them back from switching.

Chief Customer Officer, Maria Loyez commented on the findings, “Australians care deeply about fighting climate change, so much so that 96 percent of them are already taking action to reduce their carbon footprint.  More and more Australians want their capital invested in line with their personal values, and many of them are looking to their advisers on how to do this.

“Many people are not sure about the amount of CO2e emissions generated through various everyday actions and are unaware that investing their superannuation in an ethical fund can have a significant impact by directing money away from companies that are contributing to climate change.

“When enough people invest responsibly, this collective action can act as a powerful signalling mechanism for change in the industry whether that’s through public pressure or shrinking access to capital and insurance.”

Australians on average produce a staggering 15.4 tonnes of CO2e per person each year, which is among the highest in the world, and more than seven times the two tonnes of CO2e per person needed to reach in order to prevent catastrophic carbon change.

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