Your Guide to the Best Practices in Ethical Investing in Australia

More and more people are becoming interested in responsible investing because it is a way to realise your personal and financial goals while also thinking of others. Ethical investing in Australia is becoming more profitable now than ever, and best of all, you can still have a positive social and environmental impact through your investments.

This article presents a complete guide to the essential information you need to know before undertaking ethical investing in Australia.

What Ethical Investing Is and How It Works

Ethical investing is a type of investment that takes into account the impact that investments can have on social and environmental factors. Ethical investors choose to invest in ‘ethical’ companies that produce, sell, and distribute products and services that do not cause harm to the communities and environment surrounding them.

For example, an ethical investor may choose to invest in a company that produces organic food or non-toxic cleaning products. By investing in such ethical companies, the investor can positively benefit the environment and contribute to society.

While ethical investments are not the same as socially responsible investments (SRI), they come from the same moral and ethical standpoint. This means that an ethical investment’s financial benefits and risks are comparable to mainstream investment.

However, unlike SRI, investments also include other factors in evaluating companies’ social and environmental performance. This is to ensure that the shareholders and stakeholders of the company do not cause harm to vulnerable members of society and the environment while pursuing their financial goals.

The Reasons for Responsible and Ethical Investing in Australia

Ethical investors choose to invest their money in ethical companies for various reasons. These include:

• To give back to their community – By investing in ethical companies, ethical investors can make a positive social impact on the people around them. By supporting ethical companies, ethical investors can help build a better future for themselves and their families.
• To invest in companies that make a positive environmental impact – For environmental or environmentalist investors, supporting ethical companies may help build a better future for the natural environment.
• To earn better returns on their investments – One of the reasons why investing ethically is becoming more and more popular is because investments have outperformed mainstream investments in some instances in recent years. Investors who made investments can potentially see better returns than those who didn’t.

How to Start Investing Ethically

Ethical investing in Australia is not difficult, as you can use the same tools and strategies that you would use for mainstream investments. The following are some of the easiest ways to get started:

1. Invest in mainstream investment funds. 

• By investing in mainstream investment funds, you can invest responsibly while also having access to many ethical companies.

2.  Buy shares in Australian ethical companies.

• Responsible and ethical investing allows you to ‘vote with your money’ by directly investing in ethical companies. You can buy shares directly in ethical companies you want to support, including those specialising in organic food production or renewable energy.

3. Direct your superannuation to ethical funds.

• If you are a part of the Australian workforce, you can direct your superannuation to ethical investment funds. Some Australian super funds, for example, have ethical investment options for their members.

Let’s Get Ethical… Ethical!

Ethical investing in Australia can be great for your financial future and moral and ethical beliefs. By doing your homework and receiving the guidance of an expert financial adviser, you could experience competitive returns on your investments while also supporting important causes.

If you are looking for ethical investment advisers in Newcastle and the Hunter, trust Newcastle Financial Planning Group. We are composed of experienced professionals who will help you understand your financial situation and achieve your lifestyle goals. Book a meeting today to learn how we can work together to achieve your financial freedom!