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
Is it time to lean on the Future Fund?2 April 2020, 4:05pmThe government's $213 billion stimulus package is set to push up the country's total debt but experts say it is not reason enough to draw down on the sovereign wealth fund. Read more
Bigger balances, bigger blow: Elia2 April 2020, 12:44pmSpeaking to Financial Standard, Hostplus chief executive David Elia has said it's the super funds with higher average account balances that should be worried about the impact of the early release scheme. Read more