Is Your Superannuation fund joining the war?

In Covid times, we saw governments move from one 180 backflip to another. This cycle continues with the current situation in Ukraine.

Recently, the government has made a mockery of super fund trustee boards and their investment decisions. Now however, they are requesting support from the funds, by putting them under moral pressure to become an extended arm of Australia’s national security.

Super funds which have previously spoken about their unwavering commitment to their Environmental, Social and Governance (ESG) values, are now having to reconsider their ESG policy settings. For example, many countries are racing to provide weapon support to Ukraine and super funds must assess whether investments in armament companies are morally acceptable.

There are other considerations regarding the ESG policies, as European countries raise their concerns about climate change policies thought to be ‘too aggressive’. The abandonment of coal-burning power stations has heightened geopolitical risks, with most of the developed world becoming reliant on Russian natural gas and energy imports.

In these turbulent times, we can expect new economic policies to continue to influence institutional investment decisions.