How to tell if your super is sustainable
Lots of super funds talk about having ethical, ESG, green or sustainable options. So how can you tell what actually sits behind those claims?
A good place to start is with the evidence: clearly defined objectives and criteria, processes that ensure the underlying investments comply with those rules, transparency about what a fund invests in, and scrutiny from outside the organisation.
That’s where independent certification can help.
All five options have received Sustainable Plus certification through the Responsible Investment Association Australasia (RIAA).
Certification isn’t a reason to take every sustainability claim at face value. What it does provide is another way to examine whether the processes and evidence behind those claims stack up.
What evidence to look for
‘Sustainable’, ‘responsible’ and ‘ethical’ are terms you’ll see across the investment industry. A label on its own, however, doesn’t tell you much about what happens to your money. It’s worth a closer look – Moneysmart has some guidance on how to assess environmental claims and avoid greenwashing.
RIAA’s certification process offers a way to take a peek under the hood. Before an investment product can receive one of RIAA’s Sustainability Classifications, it must first meet RIAA’s Responsible Investment Standard. RIAA assesses investment strategies, processes, practices and disclosures, including whether responsible investment strategies are formal and auditable, whether labels are clear and not misleading, disclosure of holdings and sustainability outcomes, and stewardship practices.
RIAA’s certification governance also includes an arm’s-length Certification Assessment Panel and an external Independent Verification Panel, which verifies that procedures are in place to deliver the responsible investment strategies a product publicly describes.
In other words: there needs to be something behind the words.
What Sustainable Plus means
RIAA has three Sustainability Classifications: Responsible, Sustainable and Sustainable Plus. They distinguish certified investment products according to their approaches, claims, processes, stewardship and disclosures, and the extent to which sustainability is built into investment decision-making.
RIAA’s Sustainable Plus classification is applied only to products described as having ‘embedded, measurable and reported sustainability objectives’ aligned with their portfolio holdings and stewardship practices. Investment selection and management activities need to align with those objectives, and performance against stated sustainability objectives and targets must be tracked and reported.
This can provide greater accountability when a sustainability commitment is connected to documented criteria, investment processes and reporting, rather than existing only as a marketing statement.
That level of independent scrutiny is important to us. Because when an investment option is described as sustainable, you should be able to understand the approach, processes and reporting behind it.
“RIAA certification gives external validation that what we say about responsible investing stands up to scrutiny,” says Project Manager Matt Middleton.
“Future Group has held RIAA certification since 2019, with the latest recertification reflecting work to strengthen our investment disclosures.”
What sits behind sustainable investing at Future Super
This classification is just part of the story. What matters more is what sits behind it. Future Super’s five sustainable investment options use a range of responsible investment strategies, including screens that exclude fossil fuel companies, weapons manufacturers, and more.
Our investment manager considers sustainability-related risks and opportunities because the financial system operates within the real world that hums around it. Climate change, social instability and other systemic risks can affect economies, companies and, ultimately, long-term investment outcomes.
Doing sustainable investing well isn’t simply about whether an investment sounds ‘good’ or ‘bad’. It means having a clear process for identifying and managing sustainability-related risks and opportunities and providing a clearer view of the future. It’s about investing in members’ best financial interests.
Future Super’s approach includes investment screening, stewardship and seeking opportunities to invest in climate solutions and impact investments. The details matter – and we think members should be able to inspect them.
Can you trust sustainable super claims?
No certification can answer every question about an investment product for you.
RIAA Sustainable Plus does not guarantee investment returns, prove that every investment produces a positive impact, or mean every sustainability claim a fund could make has been independently endorsed.
What it does tell you is that Future Super’s five sustainable investment options have been put through RIAA’s certification and classification process and meet its requirements for the Sustainable Plus classification – including documented sustainability objectives, aligned investment processes, and tracking and reporting against those objectives.
For us, certification is another layer of accountability as we work to deliver a future worth retiring into. And it’s part of a bigger commitment: being clear about how we invest, explaining the thinking behind our approach, and giving members the information to inspect our approach for themselves.
Want to see what’s behind our approach? Learn more about how Future Super invests sustainably and what we mean by fossil fuel companies.
Resources & next steps
Sustainability claims: FAQs
Does Sustainable Plus mean a super fund doesn’t invest in fossil fuels?
Not necessarily. A Sustainable Plus classification assesses a product against RIAA's certification and sustainability classification requirements, but you should still look at the screening criteria (if applicable) and holdings of the super option you're considering. Different sustainable investment products use different screens, thresholds and investment approaches. Checking a fund's published exclusions and holdings list can help you understand how its sustainability commitments apply in practice.
How can I check what a sustainable super fund actually invests in?
Look beyond the fund's sustainability label and check its exclusions (if applicable), including specific definitions and revenue thresholds, and published investment holdings. You can also look for information about its stewardship approach and sustainability reporting. Independent certification can provide another source of scrutiny. RIAA's certification requirements include disclosure of holdings and sustainability outcomes, as well as assessment of responsible investment strategies and practices.
Does RIAA certification mean an investment option is right for me?
No. RIAA certification assesses a product against its Responsible Investment Standard and, where applicable, its Sustainability Classifications. It doesn't mean RIAA recommends the product for an individual or guarantees investment returns. Choosing a super investment option involves other considerations as well, including your objectives, financial situation and needs.
See Sustainable Investing for information about screening and investment processes, and what we mean by fossil fuel companies. Investments may be held directly, or indirectly through Exchange Traded Funds (ETFs) and other managed investment vehicles.
Future Super has been certified by the Responsible Investment Association Australasia according to the operational and disclosure practices required under the Responsible Investment Certification Program. Certifications are current for 24 months and subject to change at any time. Certifications are only one factor to consider when investing.