Over a decade after GESB closed their ethical option*, GESB is finally now offering members a dedicated ethical fund, the Sustainable Balanced Investment Plan.
This fund was made available to members of GESB Super, West State Super and Retirement Income Allocated Pension members on September 27, 2023.
Finally GESB clients can invest in an ethical option, and for those of us that campaigned GESB about this over the last decade, it’s good news. But how does it stack up?
The option invests in the Pendal Sustainable Balanced Fund. It invests in Australian and international shares, Australian and international listed property, Australian and international fixed interest, cash and alternative investments. See details HERE.
All of GESB’s investment options exclude tobacco, controversial weapons, and nuclear weapons. GESB also excludes any equity securities or debt issued by Russian companies or the Russian government. This option goes further, excluding fossil fuels, alcohol, pornography, uranium, logging, gambling, animal cruelty, predatory lending, or ‘companies found to have significantly breached social or environmental norms or regulations’.
These exclusions are subject to a range of specific limits – for example, with Australian shares, the option will not invest in companies that produce tobacco, derive 10% or more of their gross revenues from the distribution of tobacco, or derive 10% or more of their gross revenues from the supply of goods or services specifically related to the tobacco industry. Meanwhile, in fixed interest, the option only excludes tobacco in so far as excluding producers.
For a GESB Super member with a $50,000 balance, the annual fees and costs of the option are $421, while a West State Super member will pay $361, and a Retirement Income Allocated Pension member would pay $335.
Does GESB’s Sustainable Balanced Plan match my Ethical Criteria?
Only you will be able to answer that question – although we can certainly assist. You can see the investment holdings here and read GESB’s ESG policy. For example, some investors who want to invest in line with their ethics may not be satisfied with this portfolio holding the Big 4 banks (ANZ, CBA, NAB, and WBC), Macquarie, Rio Tinto, Coca-Cola, and Meta – for several reasons:
Environmental Concerns:
Rio Tinto: Rio Tinto, a multinational mining company, has faced criticism for its environmental practices, including allegations of environmental damage and cultural insensitivity related to the destruction of ancient Aboriginal caves at Juukan gorge in Western Australia. Such actions can be seen as incompatible with sustainability principles, especially the ‘E’ (Environmental) aspect of ESG.
Social Concerns:
Coca-Cola: Coca-Cola has been criticized for its water usage and environmental impact, particularly in water-scarce regions. From a social perspective, concerns may arise about the impact of sugary drinks on public health.
Governance Concerns:
Big 4 Banks (ANZ, CBA, NAB, WBC): While these banks may have strong governance structures, they have been involved in various controversies, including issues related to money laundering, unethical lending practices, and poor treatment of customers. Such controversies can raise ethical concerns for ESG-conscious investors.
Meta (formerly Facebook): Meta has faced scrutiny for its handling of data privacy, disinformation, and the potential impact of social media on mental health. These issues can be considered governance and social concerns that may not align with ESG values.
We assist sustainability focused investors to select portfolios that align with their values and beliefs, focusing on companies with positive social, environmental, and governance practices. If you need assistance with understanding how to match your investment selection with your investment criteria, please contact us.
*A quote from GESB after closing their ethical fund, which was open between 2007-2012: “GESB members showed little appetite for the Australian Equities SRI option and it was subsequently closed in March 2012”.
