The superannuation industry is committed to ESG but has yet to truly bring the ‘S’ to life. However, doing so will be tough given the emerging societal changes that are intersecting with major shifts within the industry itself.

“With these forces converging new leadership capabilities are needed to deliver on the ‘social’ in the ESG promise,” according to Richard Boele, KPMG’s head of human rights and social impact services.

Boele, who will deliver the keynote speech to the FEAL National Conference on 8 August 2019 in Melbourne, will share with the conference the profile and personality of a fictional 2029 FEAL Fund Executive of the Year winner.

“That winner will have successfully navigated all sorts of challenges, and turned many of them into opportunities. Automation and other new technologies are already having real social impacts, large-scale climate change driven-migration is relatively close. Then there are factors that are already challenging the industry in bringing the ‘s’ in ESG to life, such as finding assets outside of Australia,” he said ahead of the event.

“Given the limited number of available assets in equivalent countries to Australia, super funds will have to increasingly look to countries with more complex societal and human rights problems.”

Boele noted the learning of the Australian mining industry in terms of entering and securing assets in new counties and operating those assets successfully in the long term. “It is a sector that has bred leaders that have been successful around the world. What are the lessons for FEAL members from their pain?” he argued.

He will share his own experiences in advising leaders on social risks and opportunities for over 20 years. First as a successful anti-corporate campaigner, then within the values-driven The Body Shop International advising Anita Roddick and since then as an advisor, initially primarily to the resources sector but these days much wider.

“There is an extraordinary opportunity for the superannuation industry to fully consider their industry’s potential negative impacts on people but also the opportunities to maximise their positive impact,” Boele will say in an address entitled Can we make super more human?

As he sees it, the social part of ESG will become an increasing focus for members as their view of what is socially acceptable changes. Boele notes that alignment between members and how assets are governed and controlled, especially in other countries, will be critical in retaining members and attracting new ones – many want to join a fund whose strategy aligns with their owns values.

“The success of the campaign against modern slavery, for instance, is clearly reflected in the growing numbers of countries that have introduced legislation banning the practice.”

Boele puts this growing awareness down to some of the perverse outcomes of globalisation – such as growing inequality. “Outcomes that may raise broader questions of an industry that makes its money on behalf of members and what is its broader contribution to and impact on society.”

The growing interest in dual economic and social returns will also be touched on by Helen Steel, the chief executive of the Shared Value Project.

At the conference, Steel will discuss how superannuation capital can now have a stake – and a supportive hand – in adding value to society.

“Shared value projects and initiatives are fundamentally long-term strategies, creating long-term returns instead of short-term profits,” she said, ahead of the FEAL event.

“Millennials, who today represent 35 per cent of the workforce, are expressing new expectations of the companies they invest in – including their superannuation. By seizing this opportunity to contribute to the success of business and society simultaneously – whilst securing a better financial position – super funds can genuinely influence our future prosperity.”

 

 

 

Elizabeth Fry has been a financial journalist for more than 25 years and has written for a number of publications, including CFO, The Financial Times and The Australian Financial Review.
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