Skip to main content

Ethical Investing for Australians

Image
By

I write about investing, because it's a key part of life. Spending less and investing means an automatic income. An automatic income means we can work less (if we choose) and definitely stress less.

But where to invest? What to invest in? Many people expect their money to be invested responsibly and ethically - rather than making money through things like cigarettes, weapons, casinos, adult entertainment, environmental destruction, and pollution from fossil fuels. Those are all things we could probably do with less of.

So how do we invest to get good returns - and to have a positive effect on the world? Here are some sources I've seen:

Ethical Investing in Australia

At Frugality and Freedom, Michelle has done a fair bit of research into Ethical Investing in Australia.

For herself, she's chosen Bank Australia for banking, Australian Ethical for superannuation, and two exchange-traded funds (FAIR and ETHI) for her share investing outside of super. She also gives details of 'runners-up' - investments she likes but didn't end up choosing.

If you're looking to invest in individual companies (rather than funds) looking at what companies these funds invest in can also give you some ideas.

(Update: More recently, Vanguard Australia have started an ethically conscious Australian shares fund, VETH)

Leaf ratings

This quick guide gives each ethical investment option a rating (from one leaf to five) based on the ethics of their investments. See how each of the ethical investment options rate (including superannuation) or go straight to the top 5 investments.

Save the planet with your super

In this free one-hour event on 29 October, Craig Reucassel will be joined by a range of guests to unpack the role our super can play in creating the world we want to live in and the simple steps to align your money with your values.

While 86% of Australians expect their super to be invested responsibly and ethically, the reality can be quite different. This event is good for you if you're keen to invest ethically but need to know more.

(Update: the event has passed, but the replay is available from the event page)

Choose your passion

If you are looking for a particular activity to invest in (or to avoid) then you may want to use the extensive database at Responsible Returns. You can choose your most important aspects of ethical investing and it will find the companies that suit your stated preferences.

Going global

One of the easiest way to invest outside of Australia is through ETFs. Here is a detailed comparison of three of the major ethical global shares funds available in Australia.

It compares what companies they invest in, their ethical screening processes, what countries they invest in, their financial performance and their fees.

If you want to go really deep it's a good resource. As the author points out, all three have different advantages, so it comes down to which you prefer in terms of what constitutes an ethical company, what you're looking for in terms of performance and what fees you are willing to pay. The author also states a preference, but it's unclear why he chooses that particular one.

In short

There are many ways to invest ethically. Whether it's in a bank, direct shares in ethical companies, an investment fund or your superannuation - there are options for you to invest well - both for you and for the world around you.

PS. In doing my research, I found this graphic on Australian Ethical's website. It's a good summary of some of the benefits of investing ethically.


The webinar that I mentioned included this graphic from a study done in 2019. It seems responsible / ethical investing also has other advantages. The funds that invested responsibly financially out-performed the others. The most responsibly-invested funds did even better.

Read more about:

Comments

Post a Comment

Popular posts from this blog

Simple phone

By
I get my fair share of teasing for still using a Nokia phone. So I feel quite vindicated that someone has now invented a new non-smartphone . It's pitched for those who want a decluttered life. Instead of features, its selling points are things like "reclaim a little quietude from the constant intrusions of technology", "no internet connection, no app store and definitely no camera for taking selfies". One quote from the article said "as smartphones get bigger and bulkier, there is a place for something small and simplified, without all the functions." That kind of statement resonates with me. Not just for phones, but for so many areas of life - including the houses we live in.
Post a Comment
Read more

Why own a car, when you can go get?

By
That's the slogan of one company providing an alternative to car ownership. Here's our experience with them. Why not just have our own car? Another time I'll write a full post about that, but suffice to say that car ownership is a pain in the neck. The servicing, the maintenance, the repairs, the parking, the traffic, the registration, the insurance, the cleaning... For my wife and I, about 98% of our transport needs can be done on foot, by bike, by train, bus or ferry. Maybe 99% if you include rideshare. So we choose to avoid the pain (and cost) of car ownership. However, car use (I think of it separately from car ownership) can be handy in certain situations. We had one of those situations last weekend. Here's how it went. Booking a car My wife signed up for GoGet , and booked the car online for the time window she needed it. As a first-timer, she received her little membership card in the mail. On the day of the booking, GoGet sent her a reminder email about 20 minut...
Post a Comment
Read more

Too Much Stuff

By
"Why is it so hard to resist new things even when we know we already have too much. Can we find an alternative to the more, more, more mentality?" That promo got me hooked into the half-hour doco "Too Much Stuff". Australian viewers can see it online . Otherwise, here are some of my highlights. Host Sarah Wilson sums up the problem right at the start. "At every turn we're urged to possess the next thing that will make us feel smarter and more desirable. Anything we want is available with just one click. We're filling up our lives with stuff; yet ultimately, many of us feel empty, guilty and stressed out by our consumption." She sets out to explore an alternative. To see if "radically reducing our consumption" can lead to a better life. (Spoiler alert: Yes) Sarah says many people call her a minimalist but she's not so much about getting rid of things, more about not buying stuff. What's wrong with the Marie Kondo approach? Each ep...
Post a Comment
Read more