HESTA and REST – two of Australia’s largest super funds – have thrown their support behind the Voice, long-mooted legislation that will go a long way towards First Nations inclusion and empowerment with experts predicting the movement could become a key environmental, social, and governance (ESG) issue going forward.
HESTA was the first fund to support the Voice in early May, followed by REST on Monday, while other super funds are watching on the sidelines before making their own decisions.
Commenting on her fund’s endorsement of the Voice, HESTA CEO Debby Blakey explains its members work largely in health and community services and see firsthand the devastating consequences of the systemic disadvantage Aboriginal and Torres Strait Islander peoples face.
“As an investor, we also understand that strong and respectful stakeholder relationships are fundamental to good governance and long-term, sustainable value creation, which can lead to improved member outcomes,” she says.
“That’s why for many years, we’ve supported the Uluru Statement and its ambition to create a Voice to Parliament.”
HESTA was among the first major superannuation fund to implement a reconciliation action plan (RAP), which gives organisations a framework for contributing to the reconciliation movement.
“The Voice to Parliament [is] a once-in-a-generation opportunity to enhance the long-term financial interests of First Nations super members,” said REST said in a release to launch its RAP and annunciate public endorsement for the Voice.
The fund estimates out of more than its 1.9 million members, around 75,000 identify as Aboriginal or Torres Strait Islander peoples.
Super funds that have also adopted RAPs include AustralianSuper, Aware Super, Future Super, HostPlus, Vision Super, Christian Super, UniSuper, REST, AMP and Colonial First State, among others.
Before HESTA’s announcement on the Voice, Investment Magazine contacted several super funds to find out what their stance on the Voice was. Some declined to comment, but a few explained they were watching the situation before making any decisions.
The call from Indigenous leaders
HESTA’s support follows calls for support of the Voice by several Indigenous leaders at recent major superannuation conferences.
The Voice was the focus of Cape York Partnership and Good to Great Schools Australia Founder Noel Pearson at the Conference of Major Superannuation Funds in Melbourne in March.
He described the Voice as a simple proposition but expressed disappointment that little progress had been made over the past three decades.
Similarly, National Native Title Council CEO Jamie Lowe told delegates at the Australian Council of Superannuation Investors (ACSI) conference in Sydney in May the investment sector needed to be held accountable when it came to the Voice to Parliament.
“It is one of the most significant steps in history towards reconciling with First Nations people,” he said.
Also speaking at the recent ACSI conference, Foundation Chair of Australian Indigenous Studies at the University of Melbourne, Professor Marcia Langton, said support from businesses and companies for the Indigenous Voice to Parliament was overwhelming.
“They want to put to bed this historical injustice that comes up every year on Australia Day, in NAIDOC week, and in National Reconciliation Week,” she said.
“We need to work together and put an end to a conflict. Recognising Indigenous people in the constitution is very simple.”
Firmly on the ESG table
Meanwhile, a PWC report on ESG trends in 2023 lists First Nations inclusion and empowerment as a key ESG area to keep a watch on this year.
The report states that stakeholders, customers and investors are likely to expect businesses to develop and implement RAPs that move the dial towards better outcomes and economic benefits for First Nations peoples through, at a minimum, employment and procurement strategies.
However, it notes that only 33 per cent of ASX200 businesses have a RAP and much more still needs to be done.
Australian Shareholders Association CEO Rachel Waterhouse agrees that many stakeholders will be interested in how companies are engaging with their local Indigenous communities.
“We are learning more about what to look for in a RAP when monitoring ASX200 companies and how we know that a company is considering its consumers, workforce, and stakeholders,” she says.
Waterhouse believes expectations of companies in which Australians work, buy from and invest will continue to increase.
“Research shows that when CEOs speak out about social issues, consumers are attracted to the brand and employees find it important to know their CEO’s position on social issues.”
“Consumers and employees increasingly believe that CEOs who defend people’s rights are demonstrating great leadership,” she says.
However, the merits of each company’s approach and stance need to be reviewed on a case-by-case basis. “What is appropriate for one company may not be for another,” Waterhouse says.
Big investors, it seems, may take a similar approach.
“The Juukan Gorge disaster highlighted the investment risk that occurs when there is poor company engagement with First Nations people, and that there is benefit in a policy landscape that strengthens the relationship between First Nations people, business, investors and communities,” says ACSI CEO Louise Davidson.
“Whether or not a company adopts a stance on the Voice, we will continue to encourage companies to make sure they have good relationships with their First Nations stakeholders and business partners.”
Michael Robinson, a director of consulting firm Guerdon Associates, notes that it would be surprising if an investor required companies to endorse the Voice unless it had a primary purpose to advance Indigenous interests.
“Most investors, which are dominated by superannuation funds, have a purpose of facilitating member retirement income.”
However, ACSI’s Davidson previously said the Voice was a good starting point for Australia’s proper recognition of the First Peoples and in members’ best interest. “That is good for business in Australia, and therefore we think that there is a good investment case for it and in members’ best interest,” she said.
What boards can expect
Another group that has come out strongly in support of the Voice is the Responsible Investment Association Australasia (RIAA).
“A Voice to Parliament will give Indigenous communities a route to help inform policy and legal decisions that impact their lives,” says Responsible Investment Association Australasia (RIAA) CEO Simon O’Connor
When it comes to making investment decisions, he says RIAA is guided by our First Nations partners and advisers and in particular Reconciliation Australia, the lead organisation for reconciliation in Australia.
“At a minimum, we’d be looking for companies to hold informed and respectful conversations on such an important opportunity for reconciliation within their sphere of influence, which includes their employees.
“Boards will be asked, whether by investors or other key stakeholders, how they are supporting reconciliation, including about the Voice to Parliament. It’ll be important for boards to show they have reflected and held an informed and respectful conversation that demonstrates good governance and considered decision-making.”
O’Connor says RIAA is seeing more and more investors – from the biggest super funds to boutique fund managers – undertaking their reconciliation journey and implementing RAPs. “So naturally they will look to see the same in the companies they invest in.”
However, Guerdon Associates’ Robinson believes it would be odd for companies to recommend employees vote a certain way on a political issue in a referendum. “For example, if they endorsed the Voice, would there be negative consequences for employees who vote no?” he asks.
“If a company has decided it is in the company’s interests to endorse the Voice, the board of directors needs to consider that its primary duty is to the company in arriving at this.
“Examples may be when a company has a significant and material interest because of its interdependence on Indigenous customers, suppliers, partners, employees or communities in which it operates.”
Additional reporting by Callum Jones.