Does your super invest in weapons?

Different super funds draw the line on weapons in different places. Some exclude only certain “controversial weapons”, while some use revenue thresholds. Some funds invest in weapons manufacturing through broader contractors or complex investment structures¹. 

If you’re comparing funds, it pays to look beyond ethical or socially responsible labels and take some time to look at what the fund invests in.

We don’t invest in companies that manufacture weapons

We do not invest in weapons manufacturers and exclude any company that makes their money from producing:

• whole military weapons
• lethal firearms
• controversial weapons, including nuclear, chemical and biological weapons, cluster munitions and landmines 

This means we don't invest in companies like

• Lockheed Martin 
• Honeywell International 

Australian Ethical applies zero tolerance to weapons manufacturing and sets tight limits on weapons components developed specifically for military use.

We apply tight limits to weapons components

Some companies don’t manufacture weapons, but they may make components or contribute to systems that have some military use.  If a company earns more than 5% of its revenue from components or systems developed and sold for use in weapons, we exclude it. Our Ethical Guide goes into detail about our exclusions and thresholds⁺. 

How we approach countries, conflicts and government bonds

When conflicts are in the news, it may give rise to questions on whether super is connected to what’s happening, either through the companies a fund invests in, or through lending money to the governments involved.

Super funds can invest in two broad ways that matter: 

• Companies (for example, buying shares in listed companies), and 
• Government bonds (where an investor lends money to a government in return for interest). 

We assess these differently, because they work differently. 

Company investments: we don’t use blanket country bans

Australian Ethical doesn’t exclude companies just because of where they’re headquartered. Instead, we do the hard work, by looking at each company against our Ethical Criteria, including whether it’s involved in serious human rights harms, such as supporting illegal occupation.

We consider credible external sources in this area and form our own judgement taking into account the companies' products and services and customers. We do not have any current investments in companies listed in this database established by the Office of the United Nations High Commissioner for Human Rights (OHCHR) as linked to settlements in the occupied territories.

Government bonds: assessed under our government framework

Government bonds are effectively loans to a government. If we buy a government bond, we are providing financing and receiving interest in return.

We apply a separate assessment when considering government bonds, including factors such as: 

• the extent to which a country uses its military to aggressively promote national interests, and 
• the extent of military influence in government. 

Based on this external militarism assessment framework, Australian Ethical does not invest in Israeli government bonds. 

For 40 years, our Ethical Charter has guided the investment decisions we make to create a better future for people, planet and animals.

A simple way to compare super funds on weapons

If you’re comparing funds, it can help to ask one clear question: 

“Do you exclude weapons manufacturing completely, or do you allow it up to a revenue threshold?” 

You can also ask: 

• What counts as “weapons” in your policy? (Some definitions may be narrower than others.) 
• Do your exclusions apply across the whole portfolio and all investment types? 
• Can I see your holdings and screening approach? 

Australian Ethical applies zero tolerance to weapons manufacturing and sets tight limits on weapons components developed specifically for military use.  

We also publish our Ethical Criteria and make our portfolio holdings publicly available so members can see how our approach works in practice. 

Why we’ve chosen this approach

Super can be a long-term investment, and so are the decisions behind it. We believe Australians should be able to understand where their retirement savings are invested – and feel confident their fund’s approach is clear, considered and consistent.

For 40 years, our Ethical Charter has guided the investment decisions we make to create a better future for people, planet and animals even in challenging world events or market cycles.