Australia’s First Pension Fund That Does Not Invest in Fossil Fuels

Established in September 2014, Future Super is Australia’s first pension fund that does not invest in any fossil fuel companies. Nor does it invest in companies that provide any significant financing or services to fossil fuel projects.

Future Super is intended for Australians who want to shift their superannuation (pension) investments away from activities and businesses which are harmful to the environment and society and instead to want to see their money make a positive and sustainable impact. Approximately 70% of the fund is invested in growth assets such as shares and property while the remaining 30% is invested in defensive assets like fixed interest and cash.

Approved investments for the Future Super pension fund include companies that are actively engaged in renewable energy, recycling, healthcare and wellbeing, efficient transport, sustainable products, community finance, the production of healthy foods and social wellbeing.

Excluded investments for the Future Super fund include companies that are actively engaged in fossil fuels, gambling, tobacco, live animal export, old growth logging, environmental destruction, social harm and harmful financing.

The fund has been set up to support Australia’s clean energy transition and to provide some of the financing required to enable this transition. Still considered a medium to high risk investment decision, it is estimated that there is estimated that there may be a negative annual return three to less than four times out of twenty years. The recommended minimum investment timeframe is therefore four to six years.

Transitioning from an economy that is founded on fossil fuels to a sustainable one that is powered by renewable energy technologies will require significant financing and investments. A wide array of approaches, financing techniques and government policies will be required. Greater awareness around what sustainable approaches and platforms are available are also required so that people are able to make informed choices around what to invest in and whether or not their investment decisions support the environment and contribute to its protection.

The Future Super fund is just one example of an innovative financing strategy and platform that has been established to support the protection of the environment. When you consider that as of March 2017 there was a total of AUD 2.3 trillion worth of superannuation assets according to The Association of Superannuation Funds of Australia this could be a hugely significant platform for informing investment decisions and supporting Australia’s renewable energy transition.

[Cover Image: Flickr/Takver]