In Smashed Avocado: How I Cracked the Property Market and You Can Too, Nicole Haddow covered how millennials can power-save their way towards buying their first home and learn to live within their means along the way.

Her second book takes things one step further by guiding them, and anyone else looking to be more financially savvy, on how to take that hard-earned cash and invest it. Ethically.

Haddow goes through the steps she’s taken to understand what industries her superannuation currently contributes to and how to switch to a more ethical firm, she seeks ways to make her financial strategies greener and speaks to experts on how to get an ethical share portfolio on a limited budget.

We caught up with Haddow to ask her why she wanted to write the book and what she’s learnt along the way.

What was it that inspired you to write this book from the perspective of financial ethics?

It was a combination of things. We were just emerging from the catastrophic 2019/2020 bushfires and entering a pandemic when I started writing the book. I knew I wanted to explore super and shares, so selecting ethical options was essential for me at that time.

Did writing this book feel like a natural progression from Smashed Avocado…?

It did, but I wasn’t entirely sure where it was going when I started. When I finished Smashed Avocado, I finally had my act together. I had my investment property and I was renting where I wanted to live, so I was beginning to think more holistically about my finances. I obviously hadn’t anticipated a pandemic, though. This ultimately led to me selling my investment which wasn’t my plan, but it did give me quite a story!

What were you keen to learn most about when you started writing it?

Superannuation was my priority initially. I really hadn’t been giving it enough attention. I’d also never bought a share but there were some apps that I wanted to try. I was delighted to find that it’s easy to get started.

Did you know much about ethical investing before you started researching it?

It was something that I was aware of, but I wasn’t an expert. I wanted to take readers with me as I learned. It’s also a growing area that’s changing constantly. I certainly know more than I did when I started but with new ethical products and services emerging all the time, I’m always learning.

What surprised you as you worked your way through the different areas of ethical investment?

What surprised me is just how little regulation there is around what can be labelled responsible, sustainable or ethical. I looked at some products that on the surface seemed good, then when I drilled down into individual company holdings I found organisations that didn’t come close to meeting my ethical standards. I didn’t anticipate the amount of work involved in placing my money with companies that aligned with my values. But on the flip side, I was so impressed with how many people are trying to do the right thing. I think there’s a lot to be optimistic about.

Do you think there’s a lack of awareness around the ethics of where our money goes?

I think the level of awareness is growing consistently and there are lots of reasons. People are talking more about climate change and the way big companies contribute to this through their investments. This wasn’t happening a few decades ago. Millennials and Gen Z are also broadly aware of the impact their money can have. With property out of reach for many, younger generations are turning to investing and they’re doing it with a strong sense of social justice and hope for the future.

Personally, I feel that people are becoming more aware of the problem with, for example, where they have their super but they still want good returns and so are reticent about shifting funds. Do you find that there was much difference in returns for ethical super funds compared to more legacy funds?

There are several things to consider here. Age and risk tolerance are both a factor. That said, my research showed that —generally speaking — ethical and responsible investments have been outperforming the benchmark. For me, it was a case of looking for opportunities in growing industries that were also doing the right thing. I felt that investing in renewables, for example, would make more sense than investing in declining energy models. Some ethical funds are newer than legacy funds so they don’t always have comparative historical returns. If you’re unsure, it’s always worth talking to a financial professional before making the switch

If, after reading the book, someone decided to do just one thing to be more ethical with their money, what could it be?

If you have superannuation, you’re already an investor. Call your super fund and see if they can tell you where your money is invested! It took me weeks to get an inadequate amount of information out of my super fund. I later found that many ethical super funds will list every single holding on their website, so you at least get the transparency to make an informed decision. I believe it’s your money and you have the right to know where it’s invested.

In the book you talk us through micro-investing, would you say it’s the best place to start when looking at getting into investing ethically?

It really depends on where you are in terms of investing knowledge and confidence. I certainly found micro-investing to be a useful way to understand markets before I started investing larger sums elsewhere.

What was your one takeaway from writing the book?

It’s almost impossible to be perfectly ethical – especially with super and ETFs which include a bundle of holdings — but starting is better than not trying at all. I’m confident that we’ll keep seeing more impressive ethical products in years to come, too.

You can buy Nicole’s book here

Why Nicole Haddow wrote The Ethical Investor