Ethical Investment

LFF also encourages members to consider the impact of their investments. A range of ethical investment options currently exist which enable investors to use their money to further environmentally friendly practices.

Ethical investment:

  • provides funds to new companies or existing companies developing new projects (where the investment is in venture capital or direct share purchases) to fund research & development, or the distribution of new environmentally sound products, or purchase of natural resources to be conserved, for example.
  • it raises the share price of the companies you invest in if sufficiently many people invest in them (high demand increases the sharemarket price), and this sends a message to other organisations that they will need to clean up their acts if they want to attract funds in the future, and remain competitive on the stockmarket.
  • now that superannuation is compulsory, all workers are owners of funds which are being invested for us in superannuation funds. In addition, many investment funds offer savings plans such as a $1000 initial amount with regular monthly top-ups of a little as $100 a month. We have the option to ensure that our funds are being invested in companies which have a positive impact on the environment, and in particular, on Victoria’s native forests.

Three main options for ethical investment:

1. Invest in an ethical investment trust
Ethical investment, or SRI (socially responsible investment), has become a growing element of the already large managed funds market in Australia and overseas. There are now a number of funds managers in Australia which pool together investors’ money and invest it only in companies which are environmentally or ethically sound. They follow a charter for deciding where to invest, and will only invest in companies that meet this charter. Some actively seek out companies that develop sustainable land use and food production, preservation of endangered eco-systems and other ethical objectives, and others seek to avoid companies that pollute land, air or waters or produce products or services that harm the environment or humans, or have other negative features.
Fund managers in Australia that offer ethical investment funds include Australian Ethical Investment Limited, Future Super, Hunter Hall, Bendigo Bank, Community Aid Abroad, and Westpac Bank (the Australian Eco Share Fund).
The international ethical investment market is also taking off. Dow Jones & Co has teamed up with Sustainable Asset Management to establish the Dow Jones Sustainability Group Index, which is an index of the top 10% most sustainable companies in each industry sector.  Further information about the index can be found at its website:

International ethical investment fund managers can be found at links including:
The Forum for Sustainable and Responsible Investment
Ethical Funds

2. Invest directly in environmentally sound companies
You can apply similar ethical criteria to your own investments and choose organisations which you have researched and invest in them without going through a trust.

Be proactive about your superannuation fund. Investigate the portfolio of companies that your superannuation fund money is invested in. If you are not happy with what you discover, then let the fund manager know your concerns and make a recommendation to them.