Funds invest wisely; Greens moan

The Australian Conservation Foundation has released a report investigating how Governments' funds managers (most notably; super funds) are investing their money. (Interestingly, they haven't posted the report on their website)

Not surprisingly, super funds (like most investors) are shunning renewable energy companies. Accordingly to the report, for every dollar invested in renewable energy, 47 dollars are invested in fossil fuels or uranium.

There's a very simple reason for this: renewable energy companies are not good investments. They don't turn a profit. They don't even pay dividends. If I presented you with a business plan saying "I think I can build a machine that will teleport people", and couldn't give you a timeframe for it, would you give me $1,000? These companies are founded on the basis of an unproven technology, with the assumption they can make their shaky ideas work "in the long run".

Fossil fuels as an investment really does put renewable energy to shame. Take a look at Caltex for example. Even if the super funds don't make a capital gain on it, they'll be getting 7.7% fully franked dividends. There's no way a renewable energy outfit can pay that sort of money: because they don't make any money.

It is a fund manger's responsibility to invest in things that make money -- not in things that lose them money. If you received a statement from your super fund tomorrow saying that they'd lost half of your money, would it make you feel any better that it was thrown at renewable energy? How will you feel when you retire?


Submitted by Dave on Wed 19/03/2008 - 14:19

I suppose for some people it would give them a reason to be even more smug about their "carbon footprint" than they are already.

That said, those people would probably be just as happy if their super disappeared one day, since it would prevent them from engaging in EVIL CONSUMERISM.

Back in reality, I couldn't agree more. My super isn't there to be used as a charity.