Superannuation is a fundamental component of Australia's retirement income system, designed to help individuals save and invest for their retirement years. It aims to reduce the burden on the government's age pension system by encouraging people to take responsibility for their retirement savings.

In Australia, employers are required by law to contribute a percentage of their employees' earnings into a superannuation fund. This percentage is known as the Superannuation Guarantee (SG) and is currently set at 11% of an employee's ordinary earnings (increasing to 12% at 1 July 2025), so it's a sizable amount for the average Australian.

Individuals can also make additional voluntary contributions to their superannuation funds, which can have tax benefits and help boost their retirement savings.

The money contributed to superannuation is invested in a variety of assets, including shares, property, and fixed-interest investments, depending on the fund's investment strategy and the preferences of the account holder.

Access to superannuation is generally restricted until a person reaches their preservation age (which varies depending on birthdate) or meets specific conditions, such as retirement or permanent disability. This is to ensure that the funds are primarily used for retirement income.

When individuals reach retirement age, they have several options for accessing their superannuation savings. They can choose to receive regular payments as an income stream, take a lump sum, or use a combination of these options.

Australia’s superannuation industry is one of the world’s largest. The market is complex and highly competitive with numerous providers offering a diverse range of investment options and financial services.

As of March 2023, assets totalled over $3.5 trillion. To put this in perspective, Australia’s gross domestic product (GDP) in nominal terms was $1.7 trillion, making it the 13th largest national economy in the world.

Superannuation assets in Australia are typically invested in a diversified portfolio of assets to maximise returns while managing risk. The specific investment strategy can vary based on the type of superannuation fund, the preferences of the account holder, and the fund's investment objectives.

Superannuation funds invest in various asset classes, including but not limited to:

• Equities (Shares): These are investments in the ownership of companies. They can be Australian or international shares and can be from a variety of industries.
• Fixed Interest (Bonds): These are loans made to governments or corporations, typically with a fixed interest rate and maturity date.
• Property: This includes investments in commercial, residential, or industrial properties, either directly or indirectly through real estate investment trusts (REITs).
• Infrastructure: this includes investments in development projects that enhance and maintain essential physical structures and systems such as roads, bridges, airports, and utilities, contributing to economic growth and societal well-being
• Alternative Assets: Alternative investments encompass a diverse range of non-traditional assets like hedge funds, private equity, real estate, and cryptocurrencies, often offering investors opportunities beyond conventional stocks and bonds.
• Cash and Cash Equivalents: These are low-risk, highly liquid investments like term deposits, money market securities, and cash.

Superannuation funds can use actively managed or passively managed (index) investment strategies. Active management involves professional fund managers making decisions to buy and sell individual assets to outperform the market, while passive management simply aims to replicate the performance of a specific market index, like the ASX 200.

Many superannuation funds provide investment choice options that allow account holders to select from a range of investment options, which can include conservative, balanced, and growth options to suit different risk profiles and preferences.

Investing has a profound impact on society and the world at large in several ways:

• Economic Growth: Investment in businesses, infrastructure, and innovation fuels economic growth, creating jobs, increasing productivity, and raising living standards. This, in turn, contributes to overall prosperity and reduces poverty.
• Innovation: Investment in research and development, startups, and new technologies fosters innovation. Innovations in various sectors, from healthcare to energy, can lead to breakthroughs that improve the quality of life, solve pressing problems, and advance human knowledge.
• Infrastructure Development: Investments in infrastructure, such as transportation, energy, and communication networks, are critical for a functioning society. They enable trade, communication, and the efficient movement of goods and people.
• Social Impact: Socially responsible investing (SRI) and impact investing focus on generating positive societal outcomes alongside financial returns. These investments can fund projects related to healthcare, education, clean energy, and poverty alleviation.
• Environmental Impact: Investment decisions can significantly impact the environment. Sustainable investing and green investments direct capital toward environmentally friendly initiatives, reducing pollution and promoting renewable energy sources.
• Corporate Behaviour: Investors can influence corporate behaviour by using their ownership stakes to advocate for ethical and responsible business practices. This includes issues like modern slavery, human rights abuse, labour practices, diversity, and corporate governance.
• Wealth Distribution: The impact of investing is not uniform. It can exacerbate wealth inequality if certain groups benefit disproportionately from investment opportunities, while others are excluded or have limited access.
• Crisis: Investment can play a critical role in creating or responding to crises, such as funding wars, economic downturns or natural disasters. Investments can be targeted to destroy communities via funding armament manufacturers, rogue states, or alternatively, help rebuild communities, provide disaster relief, and support recovery efforts.
• Political Influence: Large institutional investors, like pension funds and sovereign wealth funds, can have political influence by determining where they invest their considerable assets. They may influence government policy decisions and governance within an industry through their investment choices.

In summary, investing is a powerful force that can shape the trajectory of society and the world. It has the potential to drive economic growth, innovation, and positive societal and environmental change. However, it also carries responsibilities to address ethical, social, and environmental concerns and to manage risks and inequalities associated with investment activities.

Investing in alignment with one's moral and ethical framework involves considering not only financial returns but also the ethical and social consequences of investment decisions. Here's how one can align their investments with their moral and ethical values:

• Screening and Exclusion: Ethical investors may choose to avoid companies or industries or countries that engage in practices they find objectionable. For example, some investors exclude companies involved in weapons manufacturing, tobacco, gambling, or in apartheid states that practice genocide, ethnic cleansing, and human rights violations. This negative screening allows investors to ensure their money is not supporting activities they consider unethical.
• Positive Screening: On the flip side, investors can actively seek out opportunities that align with their values. They may invest in companies with strong records in areas such as environmental sustainability, social responsibility, or diversity and inclusion.
• Engagement: Ethical investors often engage with the companies they invest in, advocating for better ethical practices. This can involve dialogues with company management, voting on shareholder resolutions, and pushing for positive change from within. Superannuation Funds via their internal investment teams or external Investment Managers conduct due diligence on the underlying companies they invest in, regularly meet with company management and boards and have extensive engagement practices to ensure investments meet their stated principles and investment objectives. For investments made in companies, Superannuation funds can use their proxy voting rights to influence company policies and decisions on issues like executive compensation, board diversity, and sustainability practices.
• Environmental, Social, and Governance (ESG) Factors: Some of these principles of investment will include ESG criteria that are used to evaluate a company's performance in areas related to human rights, modern slavery, workforce standards (which includes fair pay, health and safety, equal opportunity and well-being), environmental impact, social responsibility, and other governance practices. Ethical investors may give preference to state/government actors or companies with high ESG scores.
• Transparency: Ethical investors have the right to seek transparency and disclosure from their Superannuation Funds about the underlying companies invested in to ensure that these companies are forthcoming about their practices, impacts, and goals.

It's important to recognize that ethical investing can be subjective, and what one person finds ethical, another may not. Additionally, there may be trade-offs between ethical values and financial returns. Some ethical investments may also underperform compared to less ethical alternatives. Therefore, investors need to strike a balance between their moral and financial objectives, making decisions that align with their values while still meeting their financial goals.

• Each Superannuation Fund maintains a set of policies that articulate their position on Environmental, Social, and Governance (ESG) standards. These policy documents are readily accessible on the Fund's website and are designed for easy comprehension by members, providing them with a clear understanding of the Fund's stance on various issues.

  These policies encompass a range of specific areas, including but not limited to addressing:

  • Human Rights
  • Exposure to certain industries such Tobacco, Adult Entertainment, Gambling, Alcohol, Armament Manufacturing etc.
  • Climate Change and Environmental considerations, and
  • Addressing issues related to Animal Cruelty, Modern Slavery and Child Labour practices.

• These policies directly influence the Superannuation Fund's decision-making processes and how they invest and manage member funds. For instance, if the Fund commits to avoiding investments in companies associated with human rights abuses, they have a responsibility to ensure that such companies are excluded from the pool of investments made on behalf of the fund.

Superannuation members have the potential to be a powerful force for change within the industry. Their engagement, activism, and advocacy can shape the way superannuation funds operate and invest, aligning them more closely with the values and preferences of their members.

• REST Superannuation commits to net-zero emission investments: A 25-year-old man from Brisbane, Mark McVeigh, successfully sued one of Australia's major super funds, Rest, over its handling of climate change risks. This legal action led to Rest committing to achieving net-zero emissions for its investments by 2050. Mr. McVeigh sued Rest in 2018, alleging that the fund breached the Superannuation Industry Act and the Corporations Act by not adequately managing climate-related risks, such as potential damage to infrastructure or the devaluation of fossil fuel companies. The settlement, reached outside of court, does not create a legal precedent but is seen as a significant shift in addressing climate risks in the financial industry. While it doesn't provide a clear legal decision, it underscores the widely accepted understanding that directors have obligations and duties related to climate issues. Rest stated that the superannuation industry is integral to Australia's economy, which is exposed to various impacts associated with climate change, including financial, physical, and transition-related impacts.
• Bronwyn King (Tobacco Free Portfolios): After completing her medical education at the University of Melbourne, Dr. Bronwyn King pursued a career as an oncologist, specializing in the treatment of patients suffering from lung cancer and other health issues associated with tobacco use. In 2010, during a meeting with a representative from her superannuation fund, Health Super (now Aware Super), she discovered that her investments indirectly supported the tobacco industry through one of the default options in her super fund. Deeply concerned about her inadvertent contribution to the tobacco industry, she founded Tobacco Free Portfolios. This organization has since developed and implemented tobacco-free financial policies, adopted by more than 40 Australian superannuation funds, including her original fund, as well as financial institutions in ten different countries.

The Israeli-Palestinian conflict remains one of the most well documented and deeply entrenched conflicts in the modern world.  It is a long-standing, deeply rooted political and territorial dispute, and its history dates back over several decades. This history is important to understand as it brings to light why recent events (7 October 2023) took place and how the conflict shapes the region's politics and international relations. Here is a simplified overview of the conflict's history:

• In the late 19^th and early 20^th centuries, Jewish immigrants, fuelled by the Zionist political movement, began moving to Palestine with the goal of establishing a Zionist Jewish homeland.
• During World War I, the British government issued the Balfour Declaration in 1917, which expressed support for the establishment of a "national home for the Jewish people" in Palestine. After the war, the League of Nations granted Britain a mandate to Zionist Jews over Palestine.
• This led to tensions and conflicts with the Arab population, who opposed the Zionist movement. These tensions escalated over time, leading to riots and violence.
• In 1947, the United Nations (UN) proposed a partition plan for Palestine, recommending the creation of separate Jewish and Arab states, with Jerusalem as an international city. The plan was accepted by the Jewish leadership but rejected by the Arab states.
• Following the UN partition plan, the State of Israel was declared in 1948. Arab states, including Egypt, Jordan, Syria, and Iraq, attacked Israel. Israel won the war and used this opportunity to expand its territory beyond the UN-designated borders. Furthermore, the 1948 war resulted in the displacement of hundreds of thousands of Palestinian Arabs, leading to the Palestinian refugee issue that remains unresolved to this day.
• In 1967, another major conflict occurred when Israel launched a pre-emptive strike against its Arab neighbours. Israel captured the West Bank, Gaza Strip, East Jerusalem, and the Golan Heights during the ‘Six-Day War’.
• Following the 1967 war, Palestinian nationalist movements, such as the Palestine Liberation Organization (PLO), gained prominence, advocating for self-determination and the end of Israeli occupation.
• In 1973, Egypt and Syria launched a surprise attack on Israel during the Jewish holiday of Yom Kippur. The conflict initially caught Israel off guard, and a ceasefire was brokered. Whilst the war did not result in significant territorial changes, it was a major military and political event that led to increased diplomatic efforts.
• In 1987, a popular Palestinian uprising (‘First Intifada’) against Israeli rule in the occupied territories, primarily the West Bank and Gaza Strip, contributed to international awareness of the Israeli-Palestinian conflict and led to the Oslo Accords, which initiated a peace process.
• The 1990s saw a series of peace initiatives, including the Oslo Accords in 1993, which led to limited self-governance for Palestinians in the West Bank and Gaza Strip. However, the Oslo process eventually failed.
• In 2007, Israel implemented extensive restrictions on the Gaza Strip, effectively isolating its residents from the West Bank, limiting their access to education, work, and travel, which significantly damaged the Palestinian economy. Human Rights Watch has characterized these measures as contributing to Israeli authorities' alleged crimes against humanity, including apartheid and persecution against millions of Palestinians. Consequently, the Gaza Strip has come to be known as the "largest open-air prison in the world." 
• These conditions ultimately played a role in the Gaza-Israel conflicts in 2008-2009 and 2014, involving Hamas, a political and military organisation that won democratic elections in Gaza in 2007, and Israel.
• In 2022, Israel witnessed the return of Benjamin Netanyahu, resulting in the formation of the most right-wing government in its history. This political shift exacerbated the growth of illegal Israeli settlements in the West Bank, sparking increased tensions and conflicts between these and Palestinians residing in the West Bank. For an in-depth analysis of the events over the past year, Foreign Correspondent Stephanie March, reporting through ABC News, offers valuable insights via https://www.abc.net.au/news/2023-10-13/before-the-war:/102973604.  
• Israel has captured 78% of historic Palestine. The remaining 22% was divided into the West Bank and Gaza Strip. Israel continues to build settlements in the West Bank against international law:

The state of Israel and its decades long breaches of international law and human rights are well documented, clear and uncontroversial. Feel free to review these papers from unbiased international human rights organisations and the United Nations illustrating the clear-cut nature of Israel's crimes against humanity.

• https://www.amnesty.org/en/location/middle-east-and-north-africa/israel-and-occupied-palestinian-territories/report-israel-and-occupied-palestinian-territories/
   Amnesty International (www.amnesty.org) is an international non-governmental organization with its headquarters in the United Kingdom focused on human rights. They sight "institutionalised discrimination against Palestinians living under its rule", "Forcible transfers, forced evictions and demolitions of residential and livelihood structures", "Discrimination", "Unlawful killings and excessive use of force", "illegal air, land and sea blockade of the Gaza strip ... and restricting freedom of movement", "arbitrary detention without charge or trial", "unfair trials", "torture and other ill-treatment" and a "range of measures including raids, incitement campaigns and harassment to target human rights defenders" - 
   
   
• https://www.hrw.org/news/2017/06/04/israel-50-years-occupation-abuses
   Human Right Watch (www.hrw.org) is an international non-governmental organisation, headquartered in New York, that conduct research and advocacy on human rights. They have recently noted that Israeli authorities have committed crimes of apartheid and persecution. 
   
   
• https://www.btselem.org/publications/fulltext/202101_this_is_apartheid 
   B'Tselem (btselem.org) is a Jerusalem-based non-profit organisation whose stated goals are to document human rights violations in the Israeli-occupied Palestinian territories. They clearly designate Israel as an apartheid state from the Jordan River to the Mediterranean Sea.
• https://press.un.org/en/2016/sc12657.doc.htm The United Nations www.un.org is an international organization founded in 1945. Currently made up of 193 Member States, the UN and its work are guided by the purposes and principles contained in its founding Charter.
   
   
• https://www.business-humanrights.org/en/latest-news/un-publishes-list-of-112-companies-operating-in-israeli-settlements-in-the-occupied-palestinian-territories/ These companies have been published by the United Nations with business activities related to Israeli settlements in occupied Palestinian territories, which are regarded as illegal under international law. The UN Human Rights Office held widespread discussions with numerous States, civil society organisations, think tanks, academics and the companies themselves in formulating this list of companies. 

Source: United Nations, 2008-2020

In respect to the most recent conflict, Amnesty International’s Secretary General Agnès Callamar said, “The Israeli authorities must immediately restore Gaza’s electricity supply and suspend the increased restrictions imposed as a result of the Minister of Defence’s order of 9 October 2023 and lift its illegal 16-year blockade on the Gaza Strip. The collective punishment of Gaza’s civilian population amounts to a war crime – it is cruel and inhumane. As the occupying power, Israel has a clear obligation under international law to ensure the basic needs of Gaza’s civilian population are met.”

The blackout in the Gaza Strip has cast the region into darkness, deepening an ongoing humanitarian crisis. The power outages are set to have a profound impact on crucial services, hindering access to clean water and precipitating a public health emergency. This crisis will leave Gaza's already strained hospitals without the essential medical equipment they need, especially when healthcare workers are grappling with treating thousands of individuals severely injured in Israeli attacks. Furthermore, it poses a grave threat to the lives of hospital patients, encompassing those with chronic illnesses and those in critical care, including newborns reliant on life support.

On 9 October 2023, Israel’s defence minister Yoav Gallant stated, “We are imposing a complete siege on Gaza. There will be no electricity, no food, no water, no fuel. Everything will be closed. We are fighting human animals and we act accordingly”. This is an explicit confirmation that these acts have been taken to punish civilians collectively amounting to human rights abuse, a war crime and in breach of international law. 

Upon visiting your Superannuation Funds website, you will find a dedicated section focusing on ESG (Environmental, Social, and Governance) and Responsible Investing. This section provides an elaborate overview of the Fund's investment principles, values, criteria, and affiliations, including their commitment to the United Nations Principles of Responsible Investing.

EthicalSuper.org has taken the initiative to draft an engagement letter for Superannuant members, serving as a valuable resource for initiating the engagement process. This letter guides Superannuant members on how to request clarity and transparency regarding their investments, as well as how to ensure that their investments align with Superannuation policies. The ultimate goal is to empower Superannuants to invest their money in harmony with their ethical, moral, and humanitarian values. It's important to note that only members of the Superannuation Funds have the greatest capacity to hold these funds accountable for their investments.

• Step 1: Start by composing a letter to your super fund to express your concerns. We have provided a pre-written version for your convenience, but feel free to personalise it to align with your unique values. This letter politely requests transparency regarding their investment policies, their approach to ESG (Environmental, Social, and Governance) and responsible investing, and specifically, how their investments in Israeli companies align with their stated investment principles. A few minutes of your time can have a significant impact, urging your fund to fulfill its ethical investment responsibilities and, on a broader scale, cease any unintended support for actions against humanity.
• Step 2: If your super fund does not respond to your initial letter, direct the letter to their complaints department. Superannuation Funds are legally obligated to respond to their members.
• Step 3: When your fund responds, it may offer a general response that doesn't directly address your request. At this point, you can inquire whether the fund is a signatory to the United Nations Principles of Responsible Investment (UNPRI). If so, request an explanation of how the Fund is managing investments in companies that potentially violate international law (UN rights office issues report on business activities related to settlements in the Occupied Palestinian Territory | OHCHR). Ethicalsuper.org has compiled a list of the holdings of each superannuation fund against these companies, which can be found [here](put link).
• Step 4: Once again, if the fund doesn't provide specific details or information about the due diligence conducted on these companies and how they align with their investment guidelines and principles, consider reaching out to the Australian Financial Complaints Authority (AFCA). File a complaint concerning potential ‘greenwashing’ and investments conflicting with the Fund's stated ESG guidelines and principles. AFCA independently assists members of Superannuation Funds in making and resolving complaints. 

Resolving this matter with Superannuation Funds will demand your unwavering commitment and determination. Notably, some of the world's leading financial institutions have already taken action to disinvest from companies associated with Israeli settlements, indicating that it is indeed achievable.

• Norway: KLP fund divests from firms linked to Israeli settlements | Business and Economy News | Al Jazeera
• BIGGEST DUTCH PENSIONFUND ABP DIVESTS FROM ISRAELI BANKS - BDS Nederland
• LGPS urged to divest from ‘Israeli settlement economy’ - Defined Benefit - Pensions Expert (pensions-expert.com) 
• NZ Super Fund divests from Israeli banks involved in settlements (nbr.co.nz)