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Innovation with super highly valuable

The innovative investment decisions of super funds have a flow-on effect on social and environmental outcomes that ultimately benefits wider society, an Australian community leader has said.

During the first day of the SMSF Association National Conference 2018 in Sydney, association patron Reverend Tim Costello urged the industry to take note of the shift in Australians becoming increasingly mindful of where their super funds were investing money.

“We should be leading, we should be innovative with our super funds, we should be saying we can solve some of our social problems, and it can be a model for other governments to solve theirs,” Costello told delegates.

He referred to research by environmental finance campaigner Market Forces that found 86 per cent of Australians believed super funds should be more transparent around where their contributions were going.

In addition, almost two-thirds of Australians believed their super fund should be proactively reducing its exposure to fossil fuel investments, and one-third would switch funds if they discovered their current super fund supported coal or coal-seam gas extraction.

Costello added new research showed responsible or ethical investments in Australia had more than quadrupled over the past three years to roughly $622 billion.

“All economic choices have impact whether as consumers, producers, investors, innovators or whatever. And this means we all have a certain amount of power as economic actors over not just economic but social and environmental outcomes as well,” he said.

“In other words, when we all take steps to reduce the gap between the rich and the poor, and when we look after those who are devalued, the whole society benefits. And becomes more trusting.

“I would encourage all super funds to move into areas of shared value such as impact investing. Be engaged in the community. Encourage clients to invest ethically.”

According to a recent Australian Centre for Financial Studies study, 70 per cent of super funds had made some form of public commitment to responsible investing, and about half had in place dedicated socially responsible investment options, with the most common product exclusions being tobacco and uranium.

“When we have a choice of where we invest our super, it not only works to improve the quality of life in retirement, it can also generate positive benefits along the way too, if it’s invested in a socially conscious way,” Costello said.

“It can generate value for us and the wider society.

“Many people like the sense of control that an SMSF gives them – the ability to choose where the money is invested.

“It allows a bigger purpose to feeling financially secure. It is a time to serve the community.”

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