Australians among the most active ESG investors globally
SelectingSuper Media Release - Tuesday 4 June 2019
Australian investors currently have $30 billion dollars invested in products that are specifically created as an ESG (environmental, social and governance) offering, which has grown by 37% in the 12 months to December 2018. Alongside this, balanced ESG superannuation options outperformed other balanced options in the 12 months to April 2019.
Australia currently has 141 signed and active ESG investment providers that have products aligning with the United Nations Principles for Responsible Investment (UNPRI), making Australia the fourth most active country for ESG investment awareness.
One quarter of Australia's ESG investment providers are superannuation funds and almost half of Australia's superannuation savings are overseen by funds and investment managers that follow ESG investment principles.
These insights are revealed by Rainmaker Information, which publishes the superannuation information portal SelectingSuper.com.au.
The latest analysis further indicates that ESG superannuation investment options are among some of the better performing options across one, three, five and ten years.
AustralianSuper's 'Socially Aware' option is the best option over 10 years in the balanced sector, HESTA's 'Eco-Pool' growth option is the fourth best over ten years and fifth best over five years in the growth sector, while WA Super's 'Sustainable Future' option is the sixth best balanced option. This performance is all relative to the three years to April 2019.
Table 1: Top performing ESG super fund investment options
Best performing diversified ESG option
Five year return p.a. to April 2019
HESTA - Eco-Pool
Australian Ethical Retail Superannuation Fund Employer - International shares
UniSuper - Sustainable High Growth
AMP SignatureSuper - Responsible Investment Leaders International Share
Mercer Super Trust Corporate Super Division - Mercer Socially Responsible Shares
Lutheran Super - High Growth All Australian Shares Socially Responsible Investment
Source: Rainmaker Information
Alex Dunnin, Executive Director of Research at Rainmaker Information explains "these results show that investors give up nothing when they invest according to ESG principles, though a fund following ESG principles should never be used as an excuse for under-performance."
Supporting this is a 0.6% performance gap in favour of ESG options over the one year period to April 2019.
Table 2: Biggest Super Funds with ESG options
Biggest super funds with ESG options
Total ESG FUM ($M)
Source: Rainmaker Information
"And this is the point of ESG - it's all about taking into account the long term risks which must include environmental and sustainability factors. The debate about ESG has long moved on from having to defend investing this way. In fact, it's now the other way around - how can long-run investors not take these factors into account?"
Dunnin added that "the increase in funds invested into ESG related products as well as an increase in the number of super funds following these principles across their whole portfolio highlights that following ESG principles is simply good practice. It's no coincidence that the Reserve Bank and the superannuation regulator have the same view on this."
To Browse a full list of super funds and their products click here
Super funds could boost returns by 59bps: Report12 November 2019, 11:48amSuperannuation funds considering a merger or major investment portfolio changes should implement a program to manage tax costs and transaction costs to deliver meaningful benefits to funds and their members ... Read more
Retail funds shrink unlisted assets11 November 2019, 12:40pmSuperannuation funds now have close to $240 billion in unlisted assets, but retail funds have a smaller proportion of their assets allocated to them than five years ago. Read more
Legal fight could change super game8 November 2019, 12:15pmRest, the $57 billion industry fund, continues to battle a legal fight brought by one of its members that could have consequences for the entire superannuation industry. Read more
APRA begins super data transformation efforts8 November 2019, 11:21amAPRA is embarking on a multi-year project to improve the quality of its superannuation data collection that will pave the way for the proper comparison of super products, with choice super set to come ... Read more
Actuaries develop retiree rule of thumb7 November 2019, 12:37pmA group of actuaries have answered the calls of retirees looking for a simpler way to determine how much money they should draw out of their savings in retirement, developing a new three-part rule of ... Read more