Super funds flex ESG muscles in rising wave of activism
Australia's super funds are joining a growing global trend for pension investors to exert direct influence on investee company strategy, especially on ESG matters. The next step may be agitating for seats on company boards.
As Australia’s superannuation system inches up towards $4 trillion in assets, the relative influence on the boards of the companies in which they invest is also rising.
These traditionally conservative custodians of Australians’ retirement nest eggs have been undergoing a character transformation. No longer will they sit on the sidelines if a company and its management is behaving in a way that is inconsistent with their values.
The increased weight of money flowing into superannuation and pressure from members to act in a socially responsible way, has pushed super funds to adopt rigorous environmental, social and governance policies.
The way that funds are exerting their influence is gradually becoming more publicly visible as they communicate their strategies and actions to members and investee company shareholders. Californian pension fund CalPRS recently detailed this in a long memo to members, explaining why the fund planned to vote against the reappointment of the entire board of Exxon Mobil, including its chair, at the company’s upcoming annual meeting on 29 May.
