Climate change is the biggest environmental, social and governance (ESG) concern for NGS Super members with the firm saying 90% of the ESG enquiries it received related to this issue.
The industry super fund, which had around 120,000 members, was responsible for over $12 billion in assets under management
In conversation with Money Management, senior manager for ESG and responsible investment, Skye King, said climate change was the most popular topic among members by a significant majority.
“We receive regular communication from members who are asking us specific ESG questions and 90% of these are related to climate change risks. They want to know if we are holding any fossil fuel companies, if we are holding Rio Tinto regarding the Juukan Gorge controversy,” King said.
“It is not just younger members either, there is an assumption that the younger demographic are the ones interested in climate change but older members are just as passionate. Most of these questions come from our current members who are engaged with their super and are asking us those questions directly.”
According to the Responsible Investment Institute Australasia (RIAA), climate change was identified as a key driver for retail interest in responsible investing.
In its annual ‘Responsible Investment Benchmark Report’, the organisation said: “Survey respondents cited external events, including the bushfires, climate strikes and increasing public awareness of climate risk, as a driver of growth in retail demand”.
King added ESG integration was “incredibly important” for super funds and the firm would not hesitate to terminate its relationship with an investment management firm which was not up to scratch.
“One of our key considerations is whether a fund is ‘true to process’ and if they are not doing what we have signed up for then they get added to our watchlist. If they do not rectify the issue then we may terminate our relationship. We have already terminated one manager as we were not confident that ESG was integrated into their process,” King said.
