First State Super and HESTA are among six Australian super funds to be named world leaders in responsible investing, joining a list of 47 global asset owners.
First State’s merger partner VicSuper, along with Cbus Super, Local Government Super and Vision Super were also named by the Principles of Responsible Investment, or PRI, for the way in which they monitor and appoint external investment managers for ESG.
First State also won the PRI’s ESG incorporation initiative of the year award for its systematic investing multi-factor opportunities strategy, known as SIMON. The announcements were made as part of the annual PRI In Person conference in Paris this week.
“Too often investors discount the return dividend of strong governance and leadership,” said First State CEO Deanne Stewart, who currently oversees some $98 billion in assets until the merger with VicSuper is completed. They attach “greater weight to near-term earnings, or even encourage management to front-load earnings or cut strategic research and development at the expense of longer-term profits.”
Speaking at the conference in Paris, First State’s head of responsible investment Liza McDonald said active ownership involved a great deal of resources, research, and firm plans of action. She also said that collaboration was key, which is why they are working with London-based asset manager Hermes for companies invested outside of Australia.
HESTA CIO Sonya Sawtell-Rickson, who helps manage around $50 billion in assets, said her team had an established framework for assessing and monitoring the responsible investment performance of their external managers.
It’s “really about sharing knowledge and advancing standards that set higher market expectations,” she said.
Backed by the UN, the PRI is a group of more than 2,000 signatories who oversee some $80 trillion in assets and have committed to a set of six principles for responsible investment. PRI CEO Fiona Reynolds said recognising responsible investment was key to raising standards and ambition among asset owners.
The merger between First State and VicSuper is due to be completed by the end of the year, creating the country’s second-biggest industry fund behind AustralianSuper.