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Page 2 - Australian super funds get rated on climate change
which, according to Bresnahan, has adopted environmental and social issues as part of its charter from day one.
He says that what made the fund stand out were simple things. “They moved into a purpose-built 6 star green building last year, which shows their commitment to this whole process. They have basically demonstrated their position rather than just talked about it, and that was probably one of the key things for us, because it is early days in this whole scenario. It is quite easy to talk the talk for want of a better expression; it is not so easy to walk the walk, and Australian Ethical have definitely done that already.” The SuperRatings methodology for the “Infinity Award” includes whether a fund has signed up to the United Nations Principles for Responsible Investment. Bresnahan says: “We’ve got an initial methodology we think works but we are quite clear in understanding that this whole issue will change rapidly and will continue to change over a period of months and years going forward.
We are not going to claim to totally understand the whole process and will be looking to partner with organisations that can assist us with the methodology side of things. Our main thing is to obviously collect, collate and measure the data and if we’ve got to team up with someone from a methodology point of view, we’re quite open to that going forward.” For super funds, whether or not they have signed up to the PRI, the introduction of an external rating system on ESG issues means that consumers are increasingly going to be able to understand how a fund is actually performing. Just as the introduction of ratings agencies meant that superannuation funds were forced to look at their internal processes in order to ensure that they kept up with best practice, the introduction of ESG ratings will do the same.
Gordon Noble is the Principal of Responsible Investment Consulting, which produces Responsible Investment News, a weekly newsletter for Australian institutional investors.
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