A clarification to this story was issued on August 3, 2011.
On the walls of Christian Super’s office in Rhodes, Sydney, a poster proclaims it to be “investing your superannuation ethically for a better world”.
But over a decade Christian Super has not met its internal return goals of providing investment gains that are above the rate of inflation. Its investment in shares should annually be better than the increase in the consumer price index plus 4 per cent.
“You will give up some returns for the sake of ethics,” says Peter Murphy, chief executive of Christian Super. “But one of our values is making money.”*
Since 2006 Christian Super, which has $580 million in funds under management, claims it has been investing ethically. About 35 per cent of Christian Super’s members are Baptist and 13 per cent are within the Church of Christ.
Christian Super uses other managers to invest directly on its behalf. It invests in Australian and global stocks, cash, alternative investments such as sustainable energy and micro finance, the first Australian superannuation fund to do so.
Christian Super stays out of what it terms “sin stocks”: gambling, alcohol and cigarette companies. It doesn’t invest in Woolworths Ltd. because Murphy says they own 1 per cent of the world’s poker machines.
Murphy says it has been in discussion with Wesfarmers Ltd. over its import of phosphorous rock from western Sahara, where war, displacement of thousands of civilians and human rights abuses have taken place. Wesfarmers is now spending $5 million to upgrade a plant to reduce its reliance on phosphorous imports from western Sahara, says Murphy.
Christian Super does not invest in companies that conduct stem cell research. “All religious traditions condone the destruction of human embryos,” says Murphy, who is a former dean of admissions at a theological college.**
But on many other investment questions Murphy is equivocal.
Christian Super does have an investment in News Corp. “We have uneasiness about News Corp.,” says Murphy.
Investments in companies that have alcohol and tobacco operations are acceptable to Christian Super as long as sales of those items make up a small minority of annual turnover. It invests in coal companies.
Murphy says Christian Super does not have a clear policy on investing in oil companies or nuclear power companies. Investments in armaments companies are permissable as long as arms sales make up less than five per cent of annual sales.
“We don’t get hung up on excluding everyone,” says Murphy. “Don’t be defined about what you don’t do, but by what you do.”
* Christian Super chief executive Peter Murphy says superannuation fund trustees are required by law to maximise members’ retirement benefits, and Christian Super is “not prepared to give up returns, full stop” for the sake of pursuing an ethical investment agenda. Mr Murphy says there is a popular misconception that investing ethically requires funds to give up returns.
** The correct quote is: “No religious tradition condones the destruction of human embryos.” I&T News apologises to Mr Murphy for this error.