Rather than just being motivated by making the biggest profit, many investors are now keen to invest in companies that share their values, says long-term financial adviser John Grocke. We asked John, who is also chair of Lutheran Super’s Board of Trustees, to answer some of the big questions about ethical investment.
What is meant by ethical investment?
Investments comprising companies selected based on screening for their environmental, social and governance (ESG) policies and behaviours. There has been a material shift in company boardrooms as directors are now on notice that their behaviours and policies regarding the environment, social outlook and governance need to better reflect Institutions’ and Individuals’ values. For many of us who have a super balance, this means the funds we are part of are already providing a level of screening to ensure the investments we are exposed to demonstrate ESG behaviour.
Why are some people interested in investing their money ethically?
Investors are increasingly concerned about the sustainability of our planet and companies’ efforts to leave a planet healthy for future generations. Historically often the pursuit of short-term financial outcomes took priority over responsible outcomes for our planet. Investors are now seeking to invest in companies that share their personal values.
Do you think Christians who engage in this space do so for the same reasons?
As Christians, we have a responsibility to care for our environment, the world we live in and the people and creatures who share our planet. The planet is a finely balanced ecosystem which we need to consider in all our activities and how we use the resources we are given.
Is ethical investment only something that’s accessible to ‘wealthy’ people?
Ethical investing is available to most of us, with the most obvious access through our superannuation investments.
What would be your general advice for anyone interested in ethical investment?
Superannuation funds provide a simple way for members to demonstrate their support for companies engaged in ESG policies. The majority of funds are actively engaging with companies to encourage these behaviours. Alternately, most major funds offer a range of specific ESG investment options. Talking to your super fund, a financial adviser or both is a great way to become better informed.
Is there only one ‘right way’ to invest ethically or are there many ways?
There are different ways to go about ethical investing, depending on an individual’s preferred emphasis. This can be in the form of an ESG balanced investment which broadly covers all different types of investments, or an investor can select an ESG fund covering a particular segment of the market – for example, renewable energy.
John Grocke has been a financial adviser/planner for more than 35 years and has been a Director at Johnston Grocke for 32 years. He is also chair of Lutheran Super’s Board of Trustees, served as a Director on the LLL Board, retiring after 12 years in 2020, and is a member at Immanuel Lutheran Church North Adelaide.
*The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
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