Super funds step up: Why investing in our community matters
Is it possible to invest fund members' money to benefit people, planet - and pocket? Mary Delahunty believes sustainable investing is the key to creating long-term value for our community, our environment and members' financial future.
Australians collectively have $2.9 trillion dollars invested in superannuation assets.* With such a large pool of money to manage on behalf of members, super funds have an equally large responsibility to make sure the way we invest it provides a financial return and builds a sustainable world for members to live in when they retire.
Over the last few years, a noticeable shift has occurred in the way some super funds are investing their assets. In response to growing member and community expectations for cleaner, fairer, more sustainable super performance, these funds are increasingly aligning their portfolios with responsible investment principles.
While this might bring to mind images of wind farms or solar panels, responsible investment has evolved radically in the last decade to encompass other paths to long-term value for members. These include social ventures such as affordable and disability housing, innovations in health and aged care delivery, as well as emerging transition opportunities such as clean tech and next-generation green buildings. Sustainability means investing in progress, recognising companies solving the world's biggest challenges are likely to be those best positioned to grow members' savings.
For people, planet and profit
HESTA's investment strategy reflects our belief that members' best interests are served by supporting a healthy economy, environment and society. It's a powerful lens through which to identify opportunities that can generate sustainable long-term returns for our members well into the future, while positively impacting the world into which they'll retire. Using deep relationships with leading managers expert at identifying high performing, sustainable investments, we give our members a direct stake in some of the most promising assets across the globe.
As the industry fund dedicated to Australia's health and community services, investment in lifesaving biomedical innovation clearly aligns our purpose with significant commercial opportunities. Our partnership with private equity investment manager Brandon Capital Partners has so far yielded the world-first Parkinson's KinetiGraph (PKG) TM system to help care providers to better manage Parkinson's patients' symptoms; the Vaxxas needle-free vaccination system that can be used for immunisations in remote areas of the developing world; and the Ena nasal spray to combat respiratory viruses, showing promise in the fight against COVID-19.
In 2015 we established a social impact trust to enable us to make direct and indirect social impact investments. Aiming to help catalyse the development of the Australian impact investment market, our initial investment of $30 million - at the time, one of the biggest single commitments by a super fund to the Australian market - has since grown to $91 million.
Through this method, HESTA has invested in key opportunities including Nightingale Housing, a new model of financially sustainable, affordable housing and Glenview Community Services' Korongee Village, an Australian-first dementia care village in Tasmania.
Our commitment to impact investment works to encourage other institutional investors to make their own impact investments by demonstrating their value. By walking the walk on sustainable investing, we hope to help build momentum across the financial sector for a lasting focus on sustainability as the way forward to prosperity for members, and the global community.
HESTA Impact is a unique arrangement for a super fund in Australia, and I'm very proud to be part of this work.
Issued by H.E.S.T. Australia Ltd ABN 66 006 818 695 AFSL 235249, the Trustee of Health Employees Superannuation Trust Australia (HESTA) ABN 64 971 749 321. This information is of a general nature. It does not take into account your objectives, financial situation or specific needs so you should look at your own financial position and requirements before making a decision. You may wish to consult an adviser when doing this. Read the Product Disclosure Statement at hesta.com.au/pds and consider if it's right for you.