READ THIS FIRST:
THIS IS NOT FINANCIAL ADVICE.

I’m not writing this so you’ll copy my decisions.

Make your own choices and get help from qualified professionals if you need it. You might also like to check out Nicole Haddow’s ‘The Ethical Investor’ book.

Areas you may particularly want to seek advice on include:

• Changing superannuation affecting your insurance, e.g. life, total permanent disability (TPD) and/or income protection

• Tax implications of selling assets

• Business banking facilities

Why am I making you read this disclaimer?

I rarely, if ever, talk about my investment and banking specifics.

I don’t want my comments to be taken as endorsing individual providers, products or services, so I avoid making them.

I’m not a qualified financial professional. There’s plenty I get wrong. The repercussions for mistakes are lessened by my financial situation. Good chance you’re not in the same position as me.

…but I’m about to break my silence by telling you some of what I invested in and banks I use. This is to show process and reasoning, not endorse any of my selections.

No doubt you’ll have different thinking. You should not copy/paste my approach.

If that’s not cool with you, please stop reading now.

….still here? Awesome. On with the adventure.

Before we begin…

…this is a veeeeeery long post because it’s full of minutiae.

Please feel free to jump to the section that most interests you:

• Why I’m doing this (I’ll write a separate post on how I got to this point another time)

• Switching super

• Switching index funds

• Switching banks

Why I’m doing this

I believe:

• Climate change is the single greatest existential threat facing us right now.

• We need to fix this problem before we go too far. That's if we haven’t already – a distinct possibility.

• To slow down or stop the human-induced aspects of climate change, we need:

  • No new fossil fuel. No extensions for existing licenses, no new exploration, no new development approvals. Leave as much carbon in the ground as possible.

  • Speedy adoption of renewable and sustainable energy sources. The impetus of no new fossil fuels should help speed that up.

Every dollar you spend is a vote for the future you want. Every dollar you invest is an exponential vote for that future. Spend and invest accordingly. I’m determined to make sure money of mine is not supporting fossil fuels.

To that end, I did a quick audit of my investing.

Horrifyingly, I was invested in fossil fuels both inside and outside super. Further, my main bank funds fossil fuels. 

In short, I had a lot of homework to get my money aligned with my beliefs.

Longer version of the lead-up to this sudden need for action coming in a separate post, but before we jump into the fun stuff, one more heads up:

A word of caution on choosing ‘ethical’ options

As Nicole Haddow, author of The Ethical Investor, repeats in her book: ‘ethical’ is not an objective thing. We’ve all got our own definition.

It’s also not straightforward to assess.

Take exchange traded funds (ETFs) labelled as ‘ethical’ or ‘sustainable’ or ‘green’ holding shares in Australia’s Big Banks. At the time of writing, all our Big Banks (ANZ, CBA, Macquarie, NAB and Westpac) fund fossil fuels:

By holding such ETFs you continue to support fossil fuels, albeit indirectly.

You’ve gotta check the definition of ethical matches yours on a given product or service, and you’ve gotta get into the details of what each option offers.

Good news: there are excellent data aggregators like Market Forces and certification associations like Responsible Investment Association Australasia (RIAA) to get you started. It was definitely easier to assess than the last time I looked at ethical investing in depth a decade ago. 

Bad news: you have to cross-check them too.

For example, I found Macquarie Banking and Financial Services listed as ethical asset managers on RIAA but also listed as funding fossil fuels to the tune of $1.3 billion in 2023 on Market Forces. So, RIAA’s definition of responsible is not necessarily consistent with my desire to escape fossil fuel funding.

But, it can be done. 

Perhaps imperfectly, sometimes with compromise, but progress can be made.

Within two days, my super’s moved, shares are sold, I’m in the process of picking new index funds, and banking changeover is in progress.

So far I’ve spent about four hours on the mechanics and online searches. This write-up has actually been the more time consuming part of the experience!

The TLDR;

• You need to decide how far you’re willing to go on your decarbonising quest. Is it enough for you if there’s no direct fossil fuel investment, or do you want to get rid of anything that holds banks supporting fossil fuels too? And that’s just one filter - I picked it because it’s easy and obvious. You could analyse much further than I have.

• Choose what works for you. Whether you just avoid direct or also avoid indirect support of fossil fuels, it has to be better than supporting fossil fuels directly so I’m not going to say you ought to do one or the other. Choose your own adventure, folks.

• …but don’t let analysis paralysis stop you. Or the knowledge that this will take work. It’s been less painful than I anticipated so far, and I’ve been able to do it all from my computer at home. I’m sleeping better already.

• If you’re here to refute climate change or fossil fuel’s contribution to it, you are wasting your time and energy. Please don’t bother. This article is not for you.

Switching super – under an hour

It took me less than an hour (yes, I timed it) to:

• Check whether my existing fund had an ethical option (they do) and whether the fees were low (they weren’t).

• Search for and select a new super fund and investment mix - this was the most time consuming piece as I had to search PDSs, fees/costs brochures and lists of holdings.

• Sign up for a new account including identity verification.

• Authorise a full balance transfer from my existing fund.

• Get a quote for life and TPD insurance. Important note: check you can move your insurance before shifting super for continuity and to make sure you don’t lose it. I weighed up the risks and moved without transferring in the interest of speed and a clear conscience. You probably shouldn’t do what I did if you have life and/or TPD and/or income protection insurance. Speak to a professional if you’re not sure how to switch without losing them or ending up with a dud option.

• Put a non-lapsing binding death benefit nomination in place for the new fund.

Here’s the gory details, but please remember:

I’m in the luxurious stage where super is a bonus.

I can afford (ha!) to be brisk in how I deal with it. I don’t bother much looking at past performance in major funds. I won’t crack into my super for another 18 years at least pending personal disaster. There’s plenty of time for a high growth or balanced options to work their compounding magic. Hence, no performance comparisons in the following. 

Starting with my current provider

My super was with Hostplus in one of the generic balanced options. I chose it on Barefoot Investor’s recommendation in 2017 seeking the lowest fees possible with stable returns after years of not paying attention the high fees I’d been paying elsewhere.

Both of Hostplus’ generic balanced options are invested in fossil fuels

Cue me cursing creatively and vigorously.

Hostplus does have investment options without fossil fuels, specifically:

• Socially Responsible Investment (SRI) – High Growth

• Socially Responsible Investment (SRI) – Balanced

• Socially Responsible Investment (SRI) – Defensive

I’m not interested in defensive (a.k.a. conservative) options the tender age of 42, so I looked up the investment fees for the first two.

0.59 per cent and 0.68 per cent respectively. Too high for my taste. I’d like sub-0.5 per cent on the investment option I choose if I can get it.

Two minutes gone. Off to DuckDuckGo I went.

Looking at other providers

I found a list on 1million women from April 2024 as a starting point. It named eight funds with ethical options that avoided fossil fuels.

Within a minute, I’d knocked out three of them thanks to industry knowledge I’ve picked up along the way and my personal preferences:

• Verve Super. I resent their charging higher fees for Future Super’s identical product. It’s a ‘pink and shrink it’ approach in my book. If they’ve changed since the AFR article in 2020, that’s awesome and well done to them. I’m still not using Verve. Trust issue, basically.

• Catholic Super (Positive Impact Option). That fund (different investment option) got a warning in the YourSuper initial launch round for underperforming. They’ve since closed it, but I don’t trust them now either.

• Cruelty Free Super Growth – site pitched to vegans, I am not one. Sorry, vegans. The site put me off.

That left me with five to look up in more detail.

All passed the ‘no fossil fuels’ superficial check - none invest directly in oil and gas companies.

So I delved into the next level: do they indirectly support fossil fuels by using/investing in banks that finance fossil fuels?

• Australian Ethical states ‘We exclude banks who are not taking action to align their institutional lending with the objectives of the Paris Climate Agreement.’ I take that as a no, then?

• Future Super doesn’t have any of Australia’s Big Banks listed in their downloadable of all their investments as at 31 December 2024.

• Hesta holds cash in all five Big Banks and holds shares in them too as of 31 December 2024 in their Sustainable Growth portfolio.

• UniSuper holds shares in all five Big Banks on their major holdings list on the website.

• Aware Super holds cash in all five Big Banks, fixed income products in four of them, and shares in all five too, in their downloadable holdings list.

Looks to me like two of the five pass that second-order check of no indirect support via Big Banks.

This is what I mean about having to check everything.

In case you’re willing to accept the indirect support of fossil fuels by virtue of banks in the portfolio (as cash, fixed income and/or as shares), I’ve looked at the fees for all five, which took about 10 minutes. Some have them clearly on the website, others you have to download the PDS and fee/costs docs.

Here’s what I found…

(I hope I got everything right! Please note these may change as fees/PDSs update, so please don’t hold me to these. Go look for yourself. The links are to PDS/fees and costs brochures/fees summary pages. Lemme know if you spot an error, thank you!)

Looks to me like you pay a premium for the two options without banking connections to fossil fuels in their holdings.

Side note: it also turns out Hostplus’ social responsible options weren’t that expensive after all! Along with their $78 a year fee, the Balanced option would cost ~$1,622 in fees. Competitive, but now I was keen to try something different and I haven’t looked at their holdings to check the bank involvement situation.

I narrowed down to two options, and I gave myself five minutes of perusing to make a choice between them. I scanned online reviews, awards, all that jazz. I won’t tell you which one I signed up to and if my fund outs me, I will move again.

Once chosen, it took me 15 mins to:

• Check their life and TPD insurance PDS and get a quote.

• Sign up, confirming my identity and being issued a member number.

• Put in the request to roll over 100 per cent of my Hostplus balance into my new account.

• Change the investment mix to the one I’d chosen.

• Put in a non-lapsing binding death benefit nomination.

Hostplus have confirmed my money’s on the move and sent me my exit survey. My money should arrive by Monday 2 June, so I can tick that all off. Then I’ll put that insurance in place (it’s in the calendar).

Selling index funds – total 15 mins

Again, I’m in a very luxurious place with my money. I’m through the accumulation phase, so I can plod along. I don’t spend a lot of time comparing past performance. I do give the costs (management expense ratio, MER, is the technical term) a quick squiz.

I’ve got a mixed bag across two trading platform, including

• exchange traded funds (ETFs)

• listed investment companies (LICs)

• individual company shares

Auditing my holdings

I spent 10 mins checking the details of each of my shares online. Turns out I held three index funds investing in fossil fuels, specifically the ASX tickers: 

• AFI

• IVV

• VDHG

Worse still, I had VDHG in my children’s share portfolios, bought with money my mother left them in 2020. Oh the shame. Sorry, kids. 

I sent a quick email to my accountant to check what I’d need records wise for tax time given some are in dividend reinvestment plans. I received a quick reply and got onto downloading all the share registry data available to make the base cost calculations simple. I’ll have a capital gains tax event in FY25 due to the sales, but that’s a fair price to pay for my thoughtlessness.

I jumped on the two share platforms and put in five sell orders for the offending shares – three in my name, two for those in trust for my kids.

The market was already closed, so I had to use the price-to-limit option rather than market price. I chose a middle-of-the-range price based on the day’s trading, expiring in 24 hours. By the time I got to my computer after school drop-off the following morning (I’m in WA, two hours behind AEST) they’d all been filled. 

Next, I had to decide which shares to replace them with.

Choosing replacement index funds - about an hour

…and still going, but getting close! I’ll be ready to buy new ones by the time the funds come through from the sales of AFI, VDHG and IVV.

I have a mild preference for LICs but am also happy with ETFs. I came across Rask Finance’s ‘Best ETFs’ list. I applied a filter for name containing ‘ethical’ or ‘sustain’ (as in short for sustainable) and found these 14:

(Delighted to see VETH and VESG clocked in with the lowest MERs as I already hold both.)

I did some further generic searching elsewhere for ‘ethical LICs’ and ‘ethical ETFs’ in case my filtering of Rask’s table was faulty. I came across RARI and added them to the mix, just for fun.

Now I was faced with a choice:

Do I just buy more VETH and VESG, knowing I’ve already looked into them and am happy with their composition? Or do I add in a few alternatives to check they’re still the best bet?

I confess, dear reader, I was tempted by the quick option.

I immediately wanted to put in buy orders for VETH and VESG, or at least a calendar reminder to do it when the funds settle from the sales.

But it’s been a long time since I chose them. I know more now about what to look for, so I decided to do more digging before choosing.

On top of VETH and VESG, I chose the lower MER options for a few different funds:

• Betashares Diversified DZZF – MER 0.39 per cent

• Betashares International Shares ETHI – MER 0.59 per cent (which is also held inside DZZF, so I’d choose one or the other)

• VanEck Australian Shares GRNV – MER 0.35 per cent

• Russell Investments RARI – MER 0.45 per cent 

Next, I looked at their holdings to see what their exposure was to fossil fuels.

I stumbled across Morningstar’s handy comparison tool. You can see a composite rating for three metrics under ‘risk’ on the Sustainability tab, and more detail per sector under ‘values’. Thanks Morningstar!

I took screenshots, then put them side by side for all six to see which looked best to me, like this: 

They all look okay, some better than others.

Remember the holdings list for the super to find which held Big Banks? Now I had to do the same for each ETF. I treated Big Banks as a kind of claxon that indirect support was happening via the ETF holding bank shares.

I found:

• VETH holds all five Big Banks (31.5 per cent of holdings at 31 May 2025)

• VESG holds international shares, so no Aussie Big Banks by default

• DZZF holds five other Betashares ETFs plus cash. I sampled one of the holdings FAIR, which doesn’t hold any of the Big Banks as at 31 May 2025

• ETHI - one of the other give ETFS in DZZF - holds international shares, so no Aussie Big Banks by default

• GRNV holds Westpac (4.85 per cent at 30 May 2025)

• RARI holds all five Big Banks (27.9 per cent of holdings at 30 May 2025)

So, the choice appears to be DZZF, VESG or ETHI on this pass alone, and I’m wondering if I now ought to sell my VETH holdings too.

I’ll need to look into the holdings of VESG and ETHI more closely to be confident they’re not holding banks supporting fossil fuels, which will take a lot longer as I don’t know the international equivalents for Market Forces and RIAA.

Homework for tomorrow. Will let you know how I go.

Switching banks – much longer!

I’ve written this noting Market Forces’ data, but I actually didn’t come across it till after I’d done some searching on the super and shares already.

The first time I found the bank data, it went like this:

With trepidation, I looked up ‘are Australian banks supporting fossil fuels?' Immediately found Market Forces.

I smirked when I saw two banks I abhor for how they’ve treated me personally on the sh*t list. 

Not so smug so fast, ma’am. The Big Banks all fund fossil fuels. Quelle horreur!

My current main bank

Now I’m gonna out myself: I’m a CBA customer. It’s not my only bank – I have savings elsewhere – but it is my main bank. I repeat: this is not an endorsement.

I’ve been with them since I was five years old when my mother opened my Dollarmite account. When I say school banking is like tattooing your kids, I speak from experience.

Today I have 20 accounts with them. I buy shares on their platform CommSec for myself and for my kids. I have two loans with them. I have my business banking with them. They treat me very well because I’m considered an excellent customer. Plus, I really like their app. 

I explain this so you can imagine the immensity of the sigh that left my mouth when I read this about CBA:

“$23.9 billion committed since 2016. CommBank has restricted its lending to fossil fuel expansion following a 2024 policy update in a huge win for people and the environment, but remaining loopholes mean it continues to finance climate-wrecking coal and gas expanders like APA Group and Glencore.”

I thought: I’ve gotta move. More homework.

Scoping what I need

Now, I know this is going to be a pain in the backside, but if I want to move away from CBA, I will need:

• New business accounts – savings and transaction

• New kids accounts – saving and investing

• New personal accounts – saving and investing

I also have a credit card (CC) and two home loans with associated offset accounts at CBA.

My chances of getting a new CC and/or mortgages are very slim.

I pay myself a pittance from Money School. Adam’s not working, so despite our substantial asset pool and income from it, we probably won’t qualify. I am not calling it impossible yet, but I know it’d be a slog. I haven’t completely written off the idea of paying off both loans and going mortgage free if I can’t move.

Unlike super and shares, changing banks is only the start of the homework. In this process I’ll have to update:

• every direct debit.

• the banking details on all my invoicing. This means redoing the verifications with my bigger customers and constant ‘We have a new bank account!’ reminders for a while.

• the in-laws so they can send birthday and Christmas money to the right spot.

I also need to download everything – address book, statements etc. I treat Netbank as a document repository.

Also, choosing is not as simple as super and shares. I use banking daily. They have to make my life easy, not annoy me.

My criteria are:

• Pick only banks that don’t fund fossil fuels. I’m relying on the ‘Compare Banks’ table on Market Forces.

• Pick banks that operate under separate licenses so I don’t accidentally stuff up my rights to the government’s $250k guarantee by doubling up. I’m cross-checking the list on APRA to avoid it.

• Pick online platforms that are easy to use AND have computer interfaces. I’ve got an Up Bank account, and my biggest bugbear is I have to do everything on the phone. I will not be opening more accounts with them. I may be a Millennial, but I’m still using Microsoft Excel, folks.

• Keep fees to a minimum – zero if possible.

• Maximise interest on savings.

• Reliability – especially with business banking. I want to be able to talk to a human if I have an issue. I plan to look at reviews for this.

How I'm approaching the search

My process is:

• Search for ‘Best [insert desired account type – e.g. savings, kids, business] account Australia’. Trawl through a few comparison sites like Canstar and Choice.

• Pick top 3 excluding the Big Banks, comparing against:

  • Market Forces – to check their statements about fossil fuels, picking only ones with explicit statements (no statement = no go for me)

  • List of authorised deposit-taking institutions (ADIs) from APRA - to make sure I don’t choose any double ups against my existing and new banks.

• Check the PDSs for each account – fees, rates, exclusions on bonus rates etc.

• Check the online banking platform. Look at reviews for their various banking apps – sh*tty reviews = not signing up.

• Start with the easiest account types before moving onto the harder ones. I’m opting for the snowball instead of the avalanche this time (I prefer the reverse for debt).

No doubt I could pay someone to do this for me, but I’m treating this as research for you, dear reader.

Progress so far 

In two sessions across two hours, I’ve only picked the bank for the kids saving accounts. Here's how that went:

• I focused on highest base interest rates. I don’t like having to keep track of the conditions with bonus rates. I also made sure they can have at least $10k in the account earning interest.

• I looked at three comparison sites:

  • Canstar

  • InfoChoice

  • Finder (yes, I know it’s pay-to-play)

• I started shortlisting in order of seeing them on these sites:

  • Bank of Sydney – no position statement on Market Forces. They’re out.

  • Great Southern Bank – thumbs up on Market Forces, but $5k balance. They’re out.

  • Defence Bank – No statement on Market Forces. They’re out.

  • Australian Mutual Bank – no position statement on Market Forces. They’re out.

  • Teachers Mutual – all ticks!

    • 5.00 per cent base rate, up to $20k balance, no fees.

    • Statement on Market Forces checks out

    • Bank license doesn’t overlap with anything else I have already.

    • Unfortunately the app reviews are pretty damning, but they are few and old. Came across this Banking Day article with lots of good to say about them, so will give them a go.

To set up an account for my kids, I needed to become a customer. Since I needed a transaction account anyway and theirs looks good, I signed up online. The process was simple, and approval came through this morning. I’m officially a Teachers Mutual Bank customer. 

Next I’m onto business banking (gulp!). Will update this article as I go. 

I hope this has been helpful to you, and please don’t judge me too harshly for taking so long to finally sort this out.

Comments welcome

…but if you’re here to refute climate change or fossil fuel’s contribution to it, you are wasting your time and energy, so please don’t bother.