Why choose a super fund focused on ESG

23 February 2022

More people are choosing to join a super fund based on how it invests their hard-earned retirement savings, according to research from AustralianSuper1. But you don’t have to choose between environmental, social and governance (ESG) factors and top performance. Your super can have a positive impact on while your nest egg grows.

The way your fund considers ESG issues is an important part of choosing a super fund. Whether it’s a fund that values net zero carbon emissions by 2050 or pushes for companies to clean up supply chains in their operations, the benefits are clear. Not only does it help you to achieve your best financial position in retirement – it promotes a sustainable future too.  At AustralianSuper this overlays all our investment decisions.

Super and a sustainable future

Super is about your future in retirement – and research shows the benefits of ESG practices on long-term performance. Of 2,200 studies, 63% indicated a positive connection between ESG performance and financial results2.  

Word is spreading. At AustralianSuper, 14% of new members aged over 50 who joined the Fund directly in the year to 30 June 2021 made the choice for ethical, social and governance reasons. This was double the number of those aged over 50 who directly joined for sustainability reasons in the previous 12-month period3.   

Andrew Gray leads the ESG and stewardship team at AustralianSuper. He says super fund members are more engaged than ever with how their retirement savings are being invested.    ‘I think the concept of responsible investing – whether it’s called ESG, ethical investing, conscious investing, or impact investing – has become a household term,’ Andrew says.    

‘I think the average person now is thinking about or aware of whether their super fund is acting as a responsible investor no matter what term they put on it.’ 

AustralianSuper and responsible investment

AustralianSuper applies an ESG ‘lens’ over every investment it makes, whatever option your super is invested in. In a fast-changing world, we assess ESG developments and trends to identify emerging risks and opportunities. Importantly, the Fund is focused on investments it rates as most important to future proof returns for members.  

The largest superannuation fund in Australia, AustralianSuper is globally recognised as a leader in responsible investment with an A+ rating4.

Driving change – ESG issues focus

Using our size and scale, we can influence companies to drive better environmental and social outcomes. Our focus is on the environmental and social issues we believe present the greatest risks and opportunities to members’ investment outcomes. 

ESG issues we’re currently focused on include: 

  • board effectiveness
  • climate change
  • workplace practices
  • diversity
  • First Nations peoples
  • data privacy and security
  • plastics and the circular economy. 

 

Action on climate change

We’re committed to achieving net-zero carbon emissions in our investments portfolio by 2050 to help members achieve their best financial position in retirement. We require the companies we invest in to incorporate the transition to net-zero by 2050 into their strategy.

The Fund is a co-founder of Climate Action 100+, a US$60 trillion investor initiative driving change in the world’s largest carbon emitters. We’ve worked to secure more than 600 signatories to the initiative since 2017

‘We’re seeing success,’ Andrew says. 

‘More than half the companies globally have now made net zero 2050 commitments.’  

The CA100+ Net-Zero Company Benchmark framework released by AustralianSuper in 2021 helps companies address climate change. It includes a 10-point indicator set of criteria that the Fund identifies companies need to meet to manage net zero.

READ MORE: TACKLING CLIMATE CHANGE WITH YOUR SUPER


Spotlight on Modern Slavery

As a responsible investor, we actively review labour supply chain risks. We advocate for ethical and transparent workplace practices in the companies we invest in and across their supply chains. 

The Fund is a founding member and co-Chair of the Investors Against Slavery and Trafficking(IAST-APAC). The initiative aims to get companies to clean up their supply chains and operations.   

We’ve also published our first Modern Slavery Statement in 2021. It details how the Fund is identifying and managing modern slavery risks within our organisation, investments and supply chains.  

READ MORE: TACKLING MODERN SLAVERY WITH YOUR SUPER

 

RESPONSIBLE INVESTING - ESG

 

Sources

  1. Of new AustralianSuper member direct joins into AustralianSuper accumulation accounts in the over 50 age groups, 14% chose to join for ethical, social and governance reasons during 1 July 2020 – 30 June 2021. This compares with 7% selecting those reasons for directly joining in the previous 12-month period.
  2. PRI Global Assessment Report
  3. Of new AustralianSuper member direct joins into AustralianSuper accumulation accounts in the over 50 age groups, 14% chose to join for ethical, social and governance reasons during 1 July 2020 – 30 June 2021. This compares with 7% of members aged over 50 selecting those reasons for directly joining in the previous 12-month period.
  4. The PRI assesses each signatory annually. AustralianSuper achieved the highest possible rating of A+ for Overarching Approach to Responsible Investment and Governance and Listed Equity-Active Ownership by the United Nation in the PRI Global Assessment Report 2020.

 

Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

This may include general financial advice which doesn’t take into account your personal objectives, financial situation or needs. Before making a decision consider if the information is right for you and read the relevant Product Disclosure Statement, available at australiansuper.com/pds or by calling 1300 300 273. A Target Market Determination (TMD) is a document that outlines the target market a product has been designed for. Find the TMDs at australiansuper.com/TMD.

AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.


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