Strewth! Australians are surprised to find out where their super is invested: New research shows a large gap between public expectations and investment patterns.
The New Zealand charity, Mindful Money today released a new report in Australia revealing that billions of dollars of Australians’ superannuation is invested in industries linked to issues of public concern. This report, under the brand of Mindful Investing, summarises data from a pilot project, analysing the portfolios of 15 large super funds with Funds under Management of A$2.1trillion.
Barry Coates, Mindful Money Founder and Co-CEO explained: “This move into Australia comes after years of Australians asking us to provide transparency along the same lines as we do in New Zealand. We are particularly proud to be offering this information for free to the Australian public. Everyone should be informed about where their investment money goes.”
The report also draws on new research conducted by Lonergan Research on Australians’ attitudes to superannuation which found that 84% of respondents expect their super fund provider to invest ethically/responsibly. In a similar pattern to New Zealand, Australians want to avoid investing in issues such as fossil fuels (69%), human rights violations (87%), and environmental damage (85%).
Yet Mindful Investing’s analysis found that super fund managers have significant investments in the issues that Australians want to avoid. The listed equity and fixed income portfolio holdings of 31 MySuper and sustainable investment options from 15 major super fund providers have over 10% of their portfolio in those issues.
Mindful Money Co-CEO Barry Coates commented: “There is a significant gap between the expectations of everyday Australians and the reality of where their super fund is invested. We have seen this gap diminish in New Zealand, at least partly as a result of portfolio transparency. We hope that this analysis will inform and empower Australian investors and persuade fund managers in Australia to raise their ethical standards.”
The stakes are high. When scaled across the entire superannuation system, the findings suggest up to $450 billion could be invested in companies found to be linked to issues of concern, including human rights violations, animal cruelty, environmental damage, weapons, social harm and fossil fuels. These flows of capital are globally significant. The Australian superannuation sector is projected to soon be the second largest in the world behind only the US.
Mindful Money’s Co-CEO, Kate Vennell concluded: “The Australian super funds are foundations for the public’s wealth and retirement income, important for the local and national economy, and influential across global capital markets. A switch of their investment choices away from companies that contribute to harm towards climate solutions, sustainability and social inclusion could make a huge difference.”
Notes:
Mindful Investing’s report Inside Australia’s Superfunds: An ethical review of investment can be accessed atwww.mindfulinvesting.au.
Mindful Investing is a programme of the New Zealand charity, Mindful Money, which provides portfolio disclosure on more than 400 KiwiSaver funds, the superannuation equivalent and around 600 managed investment funds, updated in December and June each year.
The methodology used in Australia draws from seven years ofMIndful Money’s methodology development in New Zealand.
Mindful Investing is a small Kiwi charity that has made a big step into Australia with this pilot project. We aim to extend the range of super funds analysed, undertake two updates per year, build a large base of informed investors and work constructively with super funds to raise ethical standards.