Active Super has been named as one of Australia’s leading responsible investment funds in a study undertaken by the Responsible Investment Association Australasia (RIAA).
The Responsible Investment Super Study 2021 found that Australian super funds that are leaders in responsible investment tend to take a bigger share of the market and financially outperform their peers.
Active Super is one of 13 Australian funds identified as leading responsible investment super funds committed to good governance and accountability that use responsible investment approaches through engagement, voting, and ESG integration, and that measure outcomes while also having a high degree of transparency.
Craig Turnbull, Active Super Chief Investment Officer, says: “Active Super has a dedicated team of people committed to making ESG and responsible investment a priority. We continually monitor the companies we invest in to ensure they’re meeting our standards for financial performance and ESG impact.
“In a further commitment to responsible investment, Active Super recently issued its first-ever Impact Report, outlining key areas of focus for the fund including climate change, diversity, good governance and social considerations.”
The RIAA study says that one-quarter of super funds are demonstrating leading practice responsible investment, and that these super funds hold 42 percent of total assets, compared with 28 percent in 2019.
The fourth edition of RIAA’s Responsible Investment Super Study 2021 presents the results of a biennial survey of Australia’s largest super funds – accounting for $1.9 trillion in assets under management.
The study shows super funds that implement responsible investment practices continue to outperform their peers financially (87 basis points over 1 year and 56 over 7 years). The average performance of leading responsible investment super funds’ My Super products is better than non-leaders over 3-, 5- and 7-year timeframes.
Active Super recorded its strongest-ever yearly performance by delivering returns of more than 23 percent for the 2020-21 financial year. And in the government’s YourSuper comparison tool, Active Super was the best-performing fund over seven years (assuming a 30-year-old with a $50,000 balance), returning 9.46 percent*.
The RIAA report says that in the face of rising public concern, regulator commentary and increasing financial materiality of climate change, 92 percent of funds indicate that climate risk is actively assessed at a trustee/board level, up from 74 percent in 2019 and 64 percent in 2018.
For the first time, responsible investment approaches are influencing strategic asset allocation for the majority of super funds (55 percent, up from 39 percent in 2019).
This means that responsible investment practices are considered when allocating capital between asset classes, meeting financial return targets, and reflecting risk tolerances and time horizons.
Read more here.
*Past performance is not a reliable indicator of future performance.