What does sustainable investing mean to your super fund?
Investing and promoting sustainable practices means different things to different people and different super funds. It could mean economic sustainability, social sustainability or environmental sustainability – all of which are important considerations.
Different types of sustainable super
1. Practices and principles
Some Industry SuperFunds have blanket policies about investing in companies that act responsibly. They often require their investment managers to consider environmental, social and governance (ESG) factors when choosing investments.
They may also be signatories to the Principles for Responsible Investment which requires ESG principles to be at the heart of the funds’ investment practices.
Industry SuperFunds are amongst some of Australia’s biggest corporate shareholders. This can give them a lot of sway in encouraging companies to operate sustainably and reduce the financial risks associated with poor ESG practices.
Large super funds might even actively work with corporate management to include ESG principles in their operations and could influence decisions that not only maximise investment returns for members but also foster corporate responsibility.
3. Sustainable and ethical investment options
Members of Industry SuperFunds may also be able to choose to invest in sustainable businesses and industries directly through special investment options offered by some funds. These options allow members to focus some or all of their investments in socially and environmentally sustainable areas.
Industry SuperFunds which don’t have specific socially responsible investment (SRI) options, often apply SRI principles in their balanced investment options.