HESTA pushes for super test reform to unlock climate capital
Portfolio manager Jeff Brunton says super funds would invest more in the energy transition if contentious performance test rules are overhauled.
Panellists at this week’s Investor Group on Climate Change conference faced a thorny challenge: how to direct Australia’s $5 trillion pension savings pool into net zero climate solutions.
HESTA portfolio manager Jeff Brunton told the audience that the best way to fix a broken system was to rewrite the rules — by reforming the Your Future, Your Super performance test to make it more attractive for investors to fund the energy transition.
Three years ago, HESTA set a target to invest 10% of its portfolio in green assets. After an exhaustive search through three layers of investments — high-risk listed equities, mid-risk assets such as infrastructure, private equity and property, and low-risk debt and bonds — Brunton and his team concluded that listed equity investments would deliver the best value for the super fund.
“When we put forward that 10% target to our investment committee, they rightly wanted to see the plan that sat behind that, and wanted to know how we were going to get there,” he told the conference.
