Ethical Investing: A Greener Term Deposit

Please note: the following is not financial advice. You need to do your own research before making any investment decision.

I’ve been frustrated with the options for ethical investing in Australia for a long time. Then I read Greenwash by Guy Pearse and it clarified what I’d been closing my eyes towards – the bank that underwrites my term deposit, the National Australia Bank, is continuing to invest in new coalmining projects at record levels. I’d had enough. It was time to find something else. But options were limited.

I think I have found the answer – a green term deposit.

If you want to buy shares, in Australia at least there aren’t that many blue-chip, mainstream companies that can be described as ethical; it’s not an option for me to invest in supermarkets (gambling, coalmining, high greenhouse emissions, duopolising exploitation of suppliers) or mining companies, and after that you’re not left with many options apart from dodgy telecommunications companies.

I don’t have a large enough sum to make it worthwhile to hire a financial planner, and I don’t like the idea of the high fees and commissions that you pay if you put your money in an ethical managed fund.

It’s amazing what a little exploration on the internet can yield. I’d never heard of the Maleny Credit Union but as far as sustainable financial institutions go, they’re not doing too badly.

Maleny is a small, scenic town north of Queensland on the Sunshine Coast hinterland. The credit union was set up in 1984 by townsfolk who wanted more local credit, and two in particular who wanted to direct investment into ethical and employment initiatives. From the start members were determined to retain it as a community owned resource, and even volunteered their time to keep it open.

Then, in 2011, the board voted that the credit union merge with one of Australia’s largest credit unions, Credit Union Australia. But the townsfolk would have none of it. They wanted to keep it as a local enterprise that would always put people before profit.

Today Maleny Credit union is a social enterprise, which basically means that ‘its purpose is to improve the lives of members through ethical, sustainable and community focused services’.

The credit union’s ethics policy is quite extensive but I would have liked more detail about specific things that the credit union is investing in. In the absence of alternatives, however, I’ve decided to go ahead and take out a term deposit with them.

Credit unions versus banks
My experience in Australia is that credit unions per se are a good choice for term deposits even without sustainability credentials, because their main aim is not to make a profit, but to benefit their members. I intend to keep some of my savings in my current credit union while opening a term deposit with Maleny.

In the longer term, I’ll start to research putting some of my savings into ethical shares. The beauty of term deposits is that they give you somewhere to park your little nest egg while you decide what the heck you want to do with it in the longer term.

(Credit unions also tend to be much cheaper to bank with – by restricting different types of transactions I completely avoid monthly fees on my account, Also, given I’ve got an online savings account, I’ve never been fined when my online everyday account goes into the red!)

My term deposit with the bank is due to mature at the end of the week. When I made the decision to remove my savings, I wrote to National Australia Bank explaining why. I’d suggest doing this if you decide to remove your money from banks with dodgy investments, or sell shares for the same reason. I think it’s worth letting the companies know. If enough of us put our money where our beliefs are, the world would be a cleaner, greener place. Here’s a portion of my letter:

Recently I read a book called Greenwash by Guy Pearse. It highlighted the hypocrisy of companies like yourselves that provide copious information about cuts to operational emissions while continuing to expand your investments in dirty, emissions-intensive industries, particularly coal mining and export. These industries, as well as speeding up catastrophic climate change, are also ultimately bad for our economy because they make the Australian dollar very high while providing very little employment, relatively speaking. Further, much of the profits go out of Australia.

Have you decided to green your investments? If so, what has your experience been?


Barbara Trauer said...

I have been looking for ethical shares on the Australian stock exchange.
Some I have found are
Duet Group

Transpacific Ind.

Meridian energy.
Carnegie Wave Energy, Ceramic Fuel cells, Sirtex, TrustPower, Energy developments, SIMS metal, cochlear
Bendigo Bank and Heritage Bank.

Hill said...

I am always searching online for tips that can benefit me. Thanks!

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