Australian Ethical applies a responsible investment strategy guided by its Ethical Charter and implemented by Infradebt. The strategy includes positive screening to support renewable energy generation, climate change mitigation, and social projects such as economically sustainable development and positive social impacts. Negative screening avoids investments in controversial weapons, tobacco, illegal drugs, and non-renewable energy sources incompatible with a net-zero pathway. The aim is to ensure investments align with ethical principles, contributing positively to society and the environment.

Overview

The  Australian Ethical Infrastructure Debt Fund provides exposure to a diversified range of loans to renewable energy projects (such as solar, wind, and battery assets), decarbonisation assets (such as electric vehicle charging networks, energy efficiency or electrification upgrades), as well as loans for social infrastructure (such as schools and hospitals) and property projects with a social or environmental benefit (such as social housing). The Fund invests predominately in Australia but may also invest in foreign assets over time. These loans are typically privately originated and illiquid in nature.

Description

Australian Ethical believe the more money doing good for the planet, the better. Since 1986 we have applied the 23 principles of the Australian Ethical Charter to invest in ethical and responsible initiatives that have a positive impact on the planet, people and animals while achieving competitive long-term returns. We restrict⁺ investments in negative activities like fossil fuels, nuclear, tobacco. The Charter not only influences our investment choices, but underpins every aspect of our business practices.

We’re open about the ethical positions we take to invest and advocate for companies to have a positive impact on the planet, people and animals. A company must meet our sustainability standards for what it does and how it does it. We won’t invest if a company earns any revenue producing whole military weapons or lethal firearms, or tobacco products (zero threshold), but we allow limited revenue from alcohol or fossil fuels if a company is positive in other parts of its business. This allows us to invest in a company like Contact Energy which generates over 85% of its electricity from renewables, falling back on gas when low rainfall reduces its hydro-power. Or an agricultural company which grows wheat for food but which sells up to 10% of its grain to alcohol producers. We also exclude companies which indirectly support negative products, for example a packaging company which earns more than 1% of revenue from packaging for tobacco products.

The Fund shall seek investments assessed to support:

• the development of workers’ participation in the ownership and control of their work organisations and places 
• the production of high quality and properly presented products and services 
• the development of locally-based ventures 
• the development of appropriate technological systems 
• the amelioration of wasteful or polluting practices 
• the development of sustainable land use and food production 
• the preservation of endangered eco-systems 
• activities which contribute to human happiness, dignity and education 
• the dignity and wellbeing of non-human animals 
• the efficient use of human waste 
• the alleviation of poverty in all its forms 
• the development and preservation of appropriate human buildings and landscapes. 

The Fund restricts⁺ any investment assessed to unnecessarily:  

• pollute land, air or water 
• destroy or waste non-recurring resources 
• extract, create, produce, manufacture, or market materials, products, goods or services which have a harmful effect on humans, non-human animals or the environment 
• market, promote or advertise, products or services in a misleading or deceitful manner 
• create markets by the promotion or advertising of unwanted products or services 
• acquire land or commodities primarily for the purpose of speculative gain 
• create, encourage or perpetuate militarism or engage in the manufacture of armaments 
• entice people into financial over- commitment 
• exploit people through the payment of low wages or the provision of poor working conditions 
• discriminate by way of race, religion or sex in employment, marketing, or advertising practices 
• contribute to the inhibition of human rights generally. 

+ Our investment restrictions include some thresholds. Thresholds may be in the form of an amount of revenue that a business derives from a particular activity, but there are other tolerance thresholds we can use depending on the nature of the investment. We apply a range of qualitative and quantitative analysis to the way we apply thresholds. For example, we may make an investment where we assess that the positive aspects of the investment outweigh its negative aspects. For information on how we make these assessments for a range of investment sectors and issues such as fossil fuels, nuclear power, gambling, tobacco, human rights, and many others, please read our Ethical Guide.