The impacts of COVID-19 are likely to amplify growth in responsible investing
Global Investment Insights
with Ross Piper, Chief Executive Officer, Christian Super
Ross is the Chief Executive Officer of Christian Super, a fast-growing profit to member fund, serving ~30,000 members across Australia, with ~$1.7 billion in funds under management.
For many years, the fund has been a pioneer in ethical and impact investing, working to invest members’ money in line with their values and beliefs. The fund aims to journey with members throughout their working lives and into a purposeful retirement.
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There is growing consumer interest and care in how and where their money is invested.
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Key areas of focus for Ross at the present time are, ensuring the fund is well positioned to navigate the continued regulatory and legislative changes occurring in the superannuation industry, whilst also ensuring that the fund delivers strongly against their targeted member outcomes. Leading the team through COVID-19 has also been an important focus for Ross this year, necessitating a number of changes in how the organisation operates to ensure close member engagement and support throughout.
2020 has been a challenging year for a range of reasons, but it has also presented some opportunities. One trend in particular, has been the growing convergence of social and environmental factors aligning with the delivery of strong, long term financial returns for members.
The bushfire crisis endured at the start of 2020 across Australia also highlighted the issues and risks climate change presents, and COVID-19 is yet another factor impacting on development progress and related economic conditions all over the world.
The current market presents both risks and opportunities for investors and retaining a long term focus remains key. Ross’ conviction is that the impacts of COVID-19 will amplify the growth of responsible investing practices and related consumer sentiment in the superannuation sector.
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A ‘financial returns at all costs’ approach no longer stands up to scrutiny as an investment thesis.
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Recently, there has been a significant uplift in investor engagement around a whole range of ESG issues including Indigenous heritage protection, modern slavery and workplace harassment. This is evidence of growing consumer interest and care in how and where their money is invested, and that a ‘financial returns at all costs’ approach no longer stands up to scrutiny as an investment thesis, given the longer term non-financial risks associated with certain sectors and industries.
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There has been a significant uplift in investor engagement on a range of ESG issues including Indigenous heritage protection, modern slavery and workplace harassment.
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Ongoing legislative and regulatory reform is normal in any industry, but the constancy of change and shifts on fundamental policy settings has the potential to detract from, rather than strengthen performance across the superannuation industry.
Whilst the underlying intent of ongoing reforms may be positive, particularly in respect of improving fund comparability, competition and driving performance improvement across the sector, there is also risk of unintended consequences. These issues require thoughtful consultation and navigation for industry, Government and regulators alike, to ensure that any changes in policy settings actually deliver on stated intent of improved overall outcomes for members.
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Ongoing legislative and regulatory reform in the superannuation industry, whilst positively intended, carries the risk of unintended consequences.
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100% of Christian Super’s portfolio is ethically screened, and their investment approach is underpinned by four pillars:
Negative screening
ESG or positive screening
Active ownership
Impact investing
“Over the past 12 months our portfolio has performed strongly through a period of significant market volatility, and our investment team will continue to make SAA and DAA adjustments as necessary in light of changing market conditions”, Ross remarked. He continued, “we survey our members on a regular basis, and a consistent theme of feedback we receive is that our members care deeply about where and how their money is invested, and trust us to steward their resources accordingly. This applies across all parts of the investment portfolio, including impact investing, which represents a discreet asset class and is approximately 10% of our overall AUM.”
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Some of the world’s most capable entrepreneurs are in developing countries.
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Ross left us with some interesting perspectives from his lessons learned throughout his career which have been deeply formative for him, having had the privilege of working in a range of organisations and sectors over the years.
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If individuals and communities of developing countries can do remarkable things with scarce resources, how much more should we be challenging ourselves to do?
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“I worked with World Vision in the Middle East and Eastern Europe, in some of the most challenging countries and conditions on earth, This gave me a deep appreciation and respect for the innate resilience and entrepreneurial skills of communities facing significant duress or challenges due to adverse political, social, ethnic or conflict dynamics.”
Some of the world’s most capable entrepreneurs are in developing countries, and capital provided through microfinance or similar development financing mechanisms can be a significant enabler and multiplier of positive development outcomes.
If individuals and communities with little are able to do remarkable things with scarce resources, how much more should we be challenging ourselves to do to with the abundant resources at our disposal”, Ross highlighted.
Disclaimer
All information contained within this publication is general advice only, as the knowledge levels and needs of all individual and corporate investors vary greatly this publication should not be used solely as a decision-making tool, further opinions and information should be sought before making an investment decision. It is the recommendation of Global Investment Institute (GII) that you seek the opinions of a fee-for-service, independent investment adviser before making any investment decision.
The authors, directors or guest writers may have a financial interest as investors, trustees or directors in investments discussed or recommended in this document. It has been assessed by the editors that these financial interests have not had an impact on the material contained here within.
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