POWERED BY MOMENTUM MEDIA
Super funds wake up to Australia's ESG lag
There is a “seismic shift” among industry super funds to focus on carbon reporting, according to Research Affiliates.
Last week, Future Super co-founder Adam Verwey said there was a wide disparity in how super funds were reporting on carbon.
Speaking to Super Review, Research Affiliates director of research for Australia, Mike Aked, said Australian firms were lagging on their reporting of environmental, social and governance (ESG) issues but there had been a recent shift.
This was helped by moves by President Biden in the US to re-join the Paris Climate Accord after former President Trump exited it during his presidency.
“Industry funds have said they are seeing a seismic shift in the last month, there has really been a movement and this is driven by the US. The US are starting to get serious on it but Australia has been ignoring it,” Aked said.
“There has been discussion in Australia on ESG parameters but we need to get harder on this and show we are compliant which means being 30% below the carbon intensity benchmark [on greenhouse gas emissions] and reduce by a further 7% each year.”
The UK and Europe were known as the leaders in ESG and carbon reporting, and Aked said Research Affiliates would not work with portfolios in those countries that weren’t carbon sensitive or had a carbon net zero policy.
“In Australia we have talked about it but there has been no real momentum whereas the UK and Europe have seen measures come out about defining carbon sensitivity and being compliant,” he said.
From 2022, under the Sustainable Finance Disclosure Regulations, firms in the EU would be required to integrate sustainability risks into their internal processes to help the investment sector meet the goals of the Paris Agreement.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
