Top 3 Ethical Investments in 2017

Written by:

Michael Bones

6th of February 2019

Ethical superannuation is not just about avoiding harmful industries. It’s also about investing to make a positive impact and generate a strong return. Here’s how Future Super’s top 3 ethical investments for the 2016-17 financial year stack up for investment impact and return potential.

It’s powerful statement to move your money out of coal, oil, gas and the banks that fund fossil fuels.

With ice caps melting, oceans rising and the Great Barrier Reef bleaching, it’s important to take meaningful action on climate change.

Future Super members get this. That’s why they’ve joined Australia’s first 100% fossil fuel free super fund.

However, ethical superannuation is not just about avoiding harmful industries. It’s also about investing to make a positive impact and generate a strong return.

Want your super invested in clean energy and other ethical industries? Switch to Future Super in just 2 minutes.

Here’s how Future Super’s top 3 ethical investments for the 2016-17 financial year stack up for investment impact and return potential.

Future Super image of solar panels and wind farm

1. IIG Solar Income Fund

Thanks to renewable energy, humanity is finally breaking its addiction to burning fossil fuels.

Through the Impact Investment Group Solar Income Fund, Future Super members are investing in Australia’s transition to clean energy.

7 new solar farms

The $100 million Solar Income Fund will finance up to 7 new solar farms across the country. Some solar farms have already come online, like projects at Mt Majura in the ACT and Karratha in WA.

Powering 9,000 homes

Here are just some of the positive impacts to come from these solar developments (according to research by IIG):

  • Reduction in carbon dioxide emissions by 1.2 million tonnes
  • Power 9,000 homes with clean energy
  • Save 16,000 Australians from pollution-related disease and generate $57 million in health and environmental savings by displacing harmful fossil fuels

Target return of 10% per annum

Renewable energy infrastructure developments stack up ethically and financially. The IIG SIF has a target rate of return of 10% per annum.

Each solar farm has long-term, reliable revenue streams at fixed prices from counterparties of high credit quality including territory and local government.

2. Artesian Clean Energy Seed Fund

While the Solar Income Fund is building new renewable infrastructure today, we know that’s not enough. Climate change is a complex problem, and new solutions are needed quickly if we’re to keep warming below 2 degrees.

That’s why we’re also investing in the clean tech businesses of tomorrow through the Artesian Clean Energy Seed Fund.

30 to 50 clean tech startups

Through the Clean Energy Seed Fund, Future Super members will invest in 30 to 50 clean tech startups that have completed reputable incubator and accelerator programs.

Check out EnergyLab, hosted by the University of Technology Sydney, to get a feel for how these incubators help startups grow.

Wide range of clean tech solutions

Australians pollute more than anyone else in the world on a per capita basis. Thankfully, there’s lots of passionate Aussies who are tackling climate change through innovative businesses solutions.

Image of Australian clean energy ecosystem

source: Artesian Venture Partners

Emissions come from a range of industries. That’s why the Clean Energy Seed Fund will invest in a suite of clean tech startups working on climate solutions across sectors, including: renewable energy (solar, wave, geothermal, wind), energy storage, biofuels, metering and control, green buildings and biomaterials, transport technologies, the internet of things, water and waste.

By investing in new clean tech startups challenging the business-as-usual approach to pollution, Future Super members are supporting home grown solutions to the global climate challenge.

Strong investment potential

The Clean Energy Seed Fund is unique in offering a broad exposure to the early stage clean energy industry in Australia. There is likely an early mover advantage to access premium deals and conditions with the incubators. However, given the current rapid evolution of energy technology, picking winning technologies is inherently difficult. The Seed Fund’s diversification across 30-50 startups spreads this risk, as does the structure of selecting opportunities that have already passed through an incubation period with Australia’s leading start-up labs. This structure is an optimal method for controlling risk and supporting the growth of Australia’s clean energy industry.

3. Aspire Social Impact Bond

While other super funds invest in fossil fuels, tobacco and poker machines, Future Super looks for investments that have strong return potential and do good.

That’s why we’re investing in innovative social impact bonds, where your super can make a competitive return while supporting programs that address critical social issues like homelessness.

On any given night in Australia 1 in 200 people are homeless, according to Homelessness Australia.

By investing in the Aspire Social Impact Bond, Future Super members are making a lasting difference in the lives of people experiencing homelessness.

Stable accommodation and job readiness

The $9 million Aspire Social Impact Bond funds the Aspire Program. The bond was created by Social Ventures Australia, a social purpose organisation committed to investing in improving people’s lives. The Aspire program will be delivered by Adelaide-based homelessness services specialist Hutt St Centre, and is backed by the South Australian government.

Image of a car and a man in the foreground

The Aspire Program is based on the ‘housing first’ intervention model, and has been designed to focus on strengthening community engagement and employment participation.

Under the Aspire service model, participants are provided stable accommodation, job readiness training, pathways to employment and life skills development. Importantly, they also have the long term support of a dedicated ‘Navigator’ to help them connect with wider support services and identify and achieve their aspirations.

It is anticipated that around 600 adults who are experiencing homelessness will be referred to the Aspire Program over a four year period. Each person will be offered support for up to three years.

Direct positive impact for 600 Australian’s needing help

The Aspire Social Impact Bond will have a direct impact on the 600 adults who will participate in the program, as well as their families and local communities.

The causes of homelessness are complex. It can result from childhood or adult trauma, domestic and family violence, addiction or mental health issues. Homelessness can also come from a bout of bad luck, from too many things going wrong at the same time.

Image of a rustic older man

The ‘housing first’ intervention model will give participants a safe and professional environment in which they can, one step at a time, address the specific issues that contributed to their experience of homelessness. Qualified staff will work with participants to address any health concerns, develop their sense of self worth, and engage them in community life and job training.

While the biggest positive impact will be for the 600 program participants, taxpayers, governments and society-at-large will benefit too.

The more effective the program is, the higher the investor return

People experiencing homelessness visit hospitals and get caught up in the criminal justice system more frequently than others. Reducing their need to access these services, as well as other homelessness programs, results in measurable savings to governments and taxpayers.

By funding programs to reduce homelessness, investors can earn a return by creating savings for the government. That’s why the Aspire Social Impact Bond is backed by the South Australian government. Through the bond, investors like Future Super provide up-front capital to help the Aspire program expand. The more effective the Aspire program is at reducing homelessness, the higher the return to investors.

Another exciting thing about social impact bonds is that they help money flow to social programs that work. As the benefits of healthy people and a healthy society are more widely recognised, the social services sector will be able to unlock more investment. This will lead to increased innovation in social programs, and an incentive to find ways to genuinely improve people’s lives.

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