Australia taking ‘meaningful steps’ to integrating ESG in super
Australia’s superannuation system has taken ‘meaningful steps’ to ensure super is addressing environmental, social and governance (ESG) issues, according to research from the Principles for Responsible Investment (PRI).
In its latest report, the organisation compared private retirement systems in Australia, the US and UK and their inclusion of ESG.
It said Australia had only recently started to consider ESG but was taking meaningful steps towards developing strategies. Some 81% of for-profit super funds, it said, now had some form of responsible investment commitment.
“APRA [Australian Prudential Regulation Authority] has applied sustained pressure on super funds to improve their operational and investment efficiency and to make choices simpler for members, but has only recently started to address environmental, social, and governance issues,” it said.
“Still, policy and regulation have not stood in the way of responsible investment. Indeed, the superannuation industry has taken meaningful steps towards developing such strategies, especially when compared with pension providers in other countries.
“This progress was initiated by the not-for-profit segment. However, for-profit super funds are following their lead, such that 81% of funds now have some form of responsible investment commitment in place.”
The PRI said close attention should be paid to the structure of retirement systems and that retirement plans were well-governed and active on sustainability. It said it would be publishing a knowledge base to prompt further debate on how retirement systems could be best designed to deliver financial security while not undermining ESG outcomes.
AUTHOR
Laura Dew
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
