Future Super, a Canberra-based superannuation fund launched in 2014 for Australians looking to use their retirement savings to promote environmental sustainability, is offering what it claims to be the world's first climate-neutral super fund.
Starting in September 2014, Future Super offered a fossil fuel-free super fund with a carbon emissions footprint of two tons a year for the average super member with A$100,000 ($71,200) in investments — a fraction of the 15 tons a year for members exposed to Australia's broader stock market.
Future Super said in a news release Wednesday in conjunction with South Pole Group, a global sustainability advisory firm, it had “upped the ante” — offsetting those residual carbon emissions with emissions-reducing investments such as renewable energy projects in China and Thailand.
Simon Sheikh, managing director of Future Super, said with experts predicting an inevitable restructuring of the global economy away from fossil fuels by 2050, continued exposure to old energy sectors by Australians saving for retirement presents more risks now than opportunities.
The super fund's launch last year came at a moment when slowing growth in energy-hungry China and a global oil glut left commodity prices in a tailspin.
With Future Super avoiding the big commodity and banking stocks that dominate most Australian equity portfolios in favor of growth sectors such as health care, education and technology, falling commodity prices helped the fund post relatively strong performance for the first six months, Mr. Sheikh said in a telephone interview.
More recently, the fund's relatively low offshore exposure has weighed on performance as a depreciating Australian dollar boosted the value of overseas assets, he said.
But with an average age of 37 for Future Super members pointing to retirement around 2050, it's the longer-term arguments that matter, said Mr. Sheikh, adding “people ought to be concerned about their retirement savings.”
The fund, which members have to actively select, in contrast to industry funds with default options, currently has roughly 3,600 members with combined assets of more than A$100 million.
Mr. Sheikh said his team's ambition is to “build a billion-dollar fund as quickly as we can” in hopes that its success will spur other super funds in Australia, and pension funds around the world, to copy its example.