The fund, FutureSuper,will include no fossil fuel industry companies in its investment portfolio, guaranteeing customers their super contributions are making minimal contributions to the problem of climate change.
According to the Australia Institute, one in four Australians are willing to shift their super into a fund that doesn’t invest in coal and coal seam gas, representing a potential $247 billion that could be directed away from fossil fuels.
As well as the feel-good factor, a fossil fuel free super fund would offer investors increased security, with shareholders in fossil fuels increasing being warned by analysts of the substantial risk of future stranded assets.
Recently, HSBC warned companies like BP that they risked losing 60 per cent of their value should the international community deliver on its agreed emissions reduction targets.
Speaking to RenewEconomy, Sheikh said he was confident that FutureSuper’s offer of a product customers could be well and truly proud of would be a great attraction.
“Despite there being responsible labeled funds, we are yet to see a product that the public can be sure isn’t contributing to the fossil fuel industry,” Sheikh said.
“Fossil fuel valuations are at risk from the rapidly declining cost of renewable energy and global regulatory efforts to reduce carbon emissions. These are increasingly relevant considerations as we see major countries including the US and China move to regulating carbon pollution.”
Sheikh’s team at FutureSuper includes former vice president of JP Morgan, Jemma Green, and co-founder of Australian Ethical, James Thier.