Money

Banking and superannuation: why it’s important to make the switch to an ethical fund.

The money that we earn, save and invest has so much power.

Article by
Emily Kratzmann
Female hand holding a brown leather wallet.

The money that we earn, save and invest has so much power. The choices we make when it comes to where we bank and who holds our superannuation is one of the most powerful steps we can take when it comes to fighting the climate crisis.

Most people don’t think too much about their money, other than whether or not they have enough of it. Once it’s in the bank or our super fund, it’s reasonable to assume that our money is stored in a secure vault, waiting for us to make a withdrawal or reach retirement age.

But that’s not how money works. In fact, the majority of Australian banks and superannuation funds invest your money in harmful industries – namely those relying on coal mining, oil drilling and gas fracking – that are sending us further down the path towards detrimental climate change.

It’s not all doom and gloom though. Ethical banks and superannuation funds do exist, and by switching your money you’re actively making a positive impact on the health of the planet, and using your hard-earned cash as a force for good.

What is ethical banking?

Right now, the term ‘ethical’ sits in a pretty grey area. Any company can slap some clever marketing on their activity and claim to be ‘green’ or ‘sustainable’, so finding a fund that’s actually doing good can be slightly tricky. Some super funds may claim to divest money from fossil fuels but still earn revenue from coal, oil and gas. At the time of writing, all of the Big Four banks invest in fossil fuel projects.

How to find a the right fund

The best – and clearest – way to check your fund is through the RIAA, a non-government body promoting sustainable investments. When a fund volunteers for accreditation, the RIAA will go through that fund’s investments and provides a database of what they do and don’t do.

What to look for in a new financial institution

Banks are typically privately owned and operate for profit, so it’s good to look for a customer-owned organisation or credit union. Bank Australia is one great option, however it’s important for you to do your own research, and figure out what is best for you.

The organisations we suggest switching to are clear about divesting away from fossil fuels, logging, human rights abuses and animal cruelty, instead investing in renewable energy, recycling, affordable – and sustainable – housing, education and healthcare.

The process of switching

Changing to a new bank and rolling over your super into a new fund is a simple process. Setting up a new account takes a few minutes, while switching your direct debits might take a couple of hours.

Tell your bank/super fund why you’re leaving

When you shut down your old accounts, make sure you let your bank and super fund know why you’re moving. There’s power in money, sure, but there’s power in numbers too. The more people your former bank hears from about why they’re switching away from fossil fuels and, instead, investing in the environment, the more likely they are to start making changes from within.  

Educate others on making a sustainable switch

This is one of the most important steps you can take. Once you’ve made the switch, share what you know about banking, super and investments with colleagues and senior staff in your workplace, letting them know why using your money as a force for good is so important – not to mention how easy it is it change.

These conversations should include talking about switching your company’s default super fund, banking and investments to an ethical option. If your company’s default super is investing in fossil fuels, ask why? Question the logic. Push for change. Share this article. The more businesses who change their default super fund to a provider investing in renewable energy, affordable housing, education and healthcare, the closer we get to a healthier, more sustainable planet.

Do you want to help your company switch their super fund or bank to a more ethical one? Get in touch with us by emailing info@workforclimate.org and we can help you make the change.

Image via Unsplash Emil Kalibradov

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