Ethical retirement: matching your money to your values


PHYSICIANS who want to ensure their retirement pension is invested in accordance with their personal values ​​and ethics are encouraged to put the hard word on their super fund.

With a record number of Greens and a new wave of climate-conscious independents elected to federal parliament on May 21, the environment has never been more of a priority.

A group of doctors are about to put their money where their mouths are. Disappointed with the response from the HESTA pension fund about their investment in fossil fuels, the doctors plan to divest in mid-June.

The country is supported by Market forcesan organization that denounces institutions that fund environmentally destructive projects.

According to Market Forces’ Rachel Deans, many HESTA members don’t feel their demands are heard.

“Members feel that HESTA is not listening to their demands…to divest from companies that develop fossil fuels, companies like Santos and Woodside, for example. And as a result, more than 100 members are planning to divest from HESTA,” she explained.

Kim Farrant, Managing Director of HESTA – Responsible Investments, said Preview+ that 3.89% of their total portfolio was exposed to the production or sale of fossil fuels or their use in power generation. However, despite this, they are trying to use their influence to push for climate action and have pledged to achieve ‘net zero’ in its absolute carbon emissions in its investment portfolio by 2050.

“The effectiveness of this approach was demonstrated more recently when HESTA stepped in to publicize our perspective on AGL’s proposed split,” she explained.

“That’s why we use equity voting and engagement to push companies to appropriately manage climate risk,” she said.

Ms Deans appreciated the move but hopes for more.

“It was good to see HESTA speaking out against AGL’s split,” she said.

“But what members would really like to see is for HESTA to show climate leadership by divesting from companies that develop fossil fuels, because that’s ultimately the biggest impact the fund can have.”

However, a doctor who plans to step down in June, Dr Rosalie Schultz, doesn’t think that’s enough.

“It is not enough to reduce investments in carbon bombs. Less bad is not good enough. We should actively invest in clean industries that desperately need it,” she said. Preview+.

According to William Ezzy, Director of Client Services at DPM, a financial services company for doctorsthey have a conversation about ethical investing with every client and it is now gaining popularity.

“It’s a growing amount. Probably four in five would say, yes, I want to have a say in how this investment is undertaken,” he said.

Unless you have a self-directed super fund or a master trading account, where someone handles the financial management, you don’t have much choice in what investments your super fund makes.

Mr Ezzy said that historically the Australian equity market has been driven by resource and energy companies.

“I think as a result, the majority of super funds would have a position in fossil fuel producers,” he said.

However, Mr Ezzy said doctors need to think about their values ​​and what matters most to them. When he thinks about ethical investing, he asks his clients to think about whether they want to do a negative review or a positive review.

“A negative screen is like saying, ‘I specifically want to exclude something.’ And then, how well do we execute this negative screen? Is it only the producer of fossil fuels, or is it also the lender of this company or the distribution arm of this company?

“More and more people will say, ‘I’m going to run a positive screen that says I’m going to invest in companies that are rated on their environmental, social and governance (ESG) factors.’

“To run a positive screen really means I’m going to invest more in companies that have a better environmental record or have lower fossil fuel production, for example,” he explained.

If you want to learn more about your pension fund’s investment options, Ezzy said the first step is to visit your pension fund’s website.

“Try to get as much information as possible from the super fund’s website. The fund should have some sort of responsible investment policy or philosophy that will give the member an idea of ​​how they are investing their money. Then , many super funds, including HESTA, will have a specific environmental or sustainability investment option,” he explained.

According to Mrs. Farrant of HESTA: “We offer an investment option, Sustainable growth which is aimed at members wishing to minimize their exposure to fossil fuels.

Affected pension members can also visit the Responsible Investment Association website to better understand in which funds to invest.

Ms Deans from Market Forces said if you don’t like what you see, it’s important to let your super fund know.

“If a group of people decided they were unhappy with how their fund was investing their retirement savings, but didn’t tell their fund they were leaving because of it, it wouldn’t make as much difference. compared to someone who talked a lot about why they were leaving their fund,” she said.

For Dr. Schultz, the argument is simple.

“It shouldn’t be all about the money, we should always think about how we can use all our resources to ensure the best results, for everyone,” she said.

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