Many of the thousands of young people working in Gold Coast cafes, restaurants and hotels don’t realise some of their retirement savings are invested in major greenhouse gas emitters. At the same time, a large majority of Australians aged 18-34 are very concerned about climate change.
Former hospitality worker, Lily Kerley, now 20, was fresh out of high school when she started working part time as a waitress in Brisbane. She didn’t know much about superannuation and so just signed up to the fund recommended by her boss.
‘I was never really presented the opportunity to understand my super, not in my high school curriculum,’ she said. ‘And then I started my job straight away.’
At the time, Lily was unaware of the climate change credentials of her super fund. Her studies in economics over the next two years coincided with a growing concern about climate change.
‘I did some research into what [my super fund] were investing in and I saw they didn’t have a very good record on being green,’ she said. ‘In fact, quite the opposite.’
After two years, Lily switched to a super fund that didn’t invest in fossil fuels.
According to statistics from Gold Coast City council, waiting staff are the largest tourism and hospitality occupation group in the Southeast Queensland city and are part of an industry that adds $4.5 billion to the local economy). Workers aged 24 or younger like Lily make up almost one-third of all tourism and hospitality workers.
It’s likely many of these young workers would have signed up to the super fund recommended to them by their boss. Chances are a proportion of the contributions made by these workers would be supporting fossil fuel industries.
According to the Australian Prudential Regulation Authority (APRA), Australia’s superannuation funds had investments of about $3.1 trillion at the end of March 2021.
A number of these funds offer more ethical investment choices but in practice, most of members’ contributions go into ‘default’ investment options that include fossil fuel investments.
Laura de Zwaan, a lecturer in finance at Griffith University’s Gold Coast campus, said engaging with fossil fuel companies through a shareholding is a common approach for super funds. ‘If they own part of the company, they have a say in what happens,’ she said.
Ms de Zwaan said super funds are required to pursue the best interests of members.
‘Best interests [of members] is often interpreted as financial interests, but there’s no reason why it couldn’t also include long-term financial returns.’
While some Australian super funds have excluded investing in thermal coal projects, environmental activist group Market Forces believes much more needs to be done.
Market Forces asset management campaigner Will van de Pol said super funds need to get out of fossil fuels and into a clean energy future.
‘Australian super funds are generally falling well short of their responsibility to act on climate change,’ Mr van de Pol said.
Ms de Zwaan said many super funds are already reducing exposure to fossil fuels but could be moving faster.
‘It’s pretty clear that these factors [fossil fuels] do come with financial risk and so fossil fuels are a lot more unpopular, so we do see a big move to divest.’ she said.
As they begin their working life, young hospitality workers are facing choices about their futures. And because of concerns about climate change, they are much more likely to take a longer-term view.
Lily said she has reflected on her experience when she started work.
‘I’m disappointed in the way they choose to invest their money. As a young person, I’m constantly worried about my future on a planet experiencing the worst climate change we’ve ever seen.’
‘It’s so important to take control of [our super contributions] and not support fossil fuels that jeopardise our future,’ she said.
Ethical super funds commonly do not invest in fossil fuels (like gas, coal or oil), tobacco, gambling, alcohol, animal cruelty, old growth forest logging, some types of weapons or companies with poor human rights records.
Very few Australian funds achieve ethical status for all their investments but a number of funds do have ethical options for those wanting to make a change.
The Responsible Returns online tool offers a way to match your ethical values with particular superannuation funds and products. For example, you may not want to invest in fossil fuels but aren’t concerned about alcohol companies. This tool allows you to pick and choose your investment mix.
For more information: Choice magazine has a guide to ethical super here.
IMAGE: Morena Espresso, Gold Coast (c) Marj Osborne