Most, if not all, superannuation funds have an ESG or responsible investment policy. These policies may be broadly classified into strategies relating to
- Risk management eg carbon risk, stranded assets, governance and control
- Investment opportunities eg renewable energy, batteries and storage technologies
While most funds have a reasonable risk management framework, the approach towards identifying investment opportunities is less structured.
Investing through the lens of SDGs
The United Nations Sustainable Development Goals (‘SDGs’) is an ambitious blueprint comprising 17 goals that span objectives such as tackling climate change, ending poverty, reducing inequality to improving health and education, and more.
While aspects of this comprehensive list are not new eg climate change, it provides a sustainable framework for funds to focus their investment strategies towards making an impact on the world.
Having such a framework will enable funds to better measure the impact of the investments, but it also requires an integrated
- Governance structure
- Measurement tool
- Engagement process
Integrating SDGs
In partnership with Trillium Asset Management (part of Perpetual Group), [i3] is pleased to convene this investor roundtable to discuss how superannuation and pension funds can incorporate SDGs as part of their ESG and investment processes.
Issues to be covered include:
- Transitioning into a new governance model
- Identifying realistic strategies: Not 17 goals!
- Integrating and implementing the chosen priority areas across the portfolio
- Measuring and monitoring impact: What if it’s too difficult to quantify?
- Active engagement and materiality: How to use share voting effectively
A commitment to this new approach will require funds to re-visit their fundamental beliefs and re-orientate their existing investment strategy. This is no mean feat.
