VicSuper, the A$11.5bn (€7.7bn) Australian superannuation fund, has awarded an A$310m (€208.3m) environmental, social and governance (ESG) active global equities mandate to State Street Global Advisors, the funds arm of US giant State Street.
The new mandate is called State Street Global Advisors Integrated ESG International Shares Fund (link).
VicSuper has existing mandates in agriculture, timberland, cleantech and ‘carbon aware’ equities. It’s an investor in Generation Investment Management’s Global Equity and Climate Solutions funds.
In July this fellow Australian super fund, the A$7bn Local Government Super (LGS), tapped State Street to run a A$780m Australian equities mandate that would exclude stocks from industries such as uranium mining, gambling, armaments and tobacco.
Not-for-profit VicSuper, which has more than 240,000 members and over 19,000 participating employers, says sustainability is integral to its investment policy; in May this year it decided to divest from tobacco producers.
As part of the selection process for its external asset managers, VicSuper looks at their approach tointegrating ESG and whether they are a signatory to the Principles for Responsible Investment (PRI).
Managers are expected to provide evidence through case studies of ESG integration in their investment decision-making.
The news comes as the Responsible Investment Association Australasia (RIAA) holds its annual conference in Sydney. RIAA has released a survey which has found that most Australians (54%) want their super funds invested responsibly.
The findings showed the “enormous potential” for growth in the RI sector, said RIAA Chief Executive Simon O’Connor. He said only A$152bn (16%) of total assets under management is currently invested in responsible investment products.
And 69% of respondents think it’s important for super funds to make responsible investments – via clean energy infrastructure or avoiding harmful investments such as tobacco.
The poll was conducted online by Lonergan Research earlier this month.