Understanding Socially Responsible Investing (SRI)
Choosing where your super savings are invested is an important decision, and can be based on many factors including your attitudes and tolerance to risk, your investment timeframe, and your stage of life.
Socially responsible investment takes environmental, social, governance (ESG) or ethical considerations into account for the investment selection and management process, which can be important factors for some investors. SRI investing may involve avoiding investment in companies that have material exposure to the production of alcohol, tobacco, armaments, gambling and nuclear power.
While there isn’t sufficient evidence to prove that ethical investing delivers better investment returns over the long term, supporters of SRI investing raise a number of points to explain how ethical investments can potentially perform just as well or even better than traditional investments, including:
- Companies that focus on minimising social and environmental risks or work to provide solutions to issues like climate change and commodity scarcity may be more competitive and well-placed in the future.
- The SRI screening process eliminates companies that engage in unsustainable business practices or contribute to environmental and social problems. This could lead to reduced profitability as they face risks of government regulation or consumer boycotts.
The SRI/Ethical investment option was our strongest performing option in the 2015/16 financial year, and in 7 of the last 10 years, has achieved a higher investment return than the Nationwide MySuper / Diversified option. These two investment options have an identical target asset allocation, with the key difference being the SRI/Ethical option includes investments in share funds which are designated as Socially Responsible Investments (SRI).
Do your homework
For detailed information on our investment options, you can read the Product Disclosure Statement and Investment Guide, or give us a call. We can put you in touch with a Super Adviser* who can help you with making decisions about your super, over the phone.
If you wish to change how your current Nationwide Super balance and your future contributions will be invested, simply log into your MemberAccess account.