INVESTING

How to make sure your super isn't destroying sacred sites

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Rio Tinto's destruction of a 46,000-year-old Aboriginal heritage site in Western Australia's Pilbara region has stoked concern among investors of the social and environmental consequences of their financial decisions. But there are steps you can take to ensure you're part of the solution and not the problem.    

When news emerged in late May that global miner Rio Tinto destroyed the 46,000-year-old Aboriginal heritage site as part of the expansion of its Brockman 4 mine, organisations took action. Reconciliation Australia stripped Rio Tinto of its partnership status, and Rio has also damaged its relationship with the Puutu Kunti Kurrama and Pinikura (PKKP) Aboriginal Corporation, who hold native title over the area where the mine is located.

The destruction has also prompted investor response.

Juukan Gorge. Photo:Puutu Kunti Kurrama And Pinikura Aboriginal Corporation
The 46,000-year-old Juukan Gorge was destroyed by Rio Tinto in May. Photo: Puutu Kunti Kurrama And Pinikura Aboriginal Corporation

First State Super, a $100 billion industry super fund, has excluded Rio Tinto stock that was in the fund's diversified socially responsible investment (SRI) and single sector SRI Australian equities options. First State Super held urgent meetings with Rio Tinto, and a spokesman told sister publication Financial Standard that after the meeting the fund determined Rio Tinto "no longer met the requirements to satisfy inclusion in its SRI investment options".

Similar concerns have been raised over BHP, leading the miner to promise to perform extensive consultation with traditional owners over potential destruction of 40 Aboriginal heritage sites that the company had received permission to destroy from the Western Australian government.

Additionally, news that Chinese conglomerate China Shenhua Energy is set to destroy ancient Aboriginal artefacts at a coal mine in regional NSW led to calls for investors such as BlackRock and Cbus super to justify their investments as well.

While activists are pressing fund managers and super funds on their positions, what can you do if you're concerned that your super fund option may be invested in these companies?

Super funds' disclosure of their underlying assets can be inconsistent from fund to fund. Some funds disclose more than others, so your first stop should be your fund's website to see what they disclose in their investment options and their annual statements.

Incidentally, you should be able to see more of your fund's holdings as of the end of this year - from December 31, 2020, large superannuation funds will be required to make information about their investment holdings publicly available on their website within 90 days of the end of a quarter. Super funds will be required to disclose their holdings on an item-by-item basis for each investment option. The portfolio holdings disclosure rule is long-awaited, and has previously been postponed.

If you have concerns about the holdings your fund has, or if you're finding it difficult to find that information, you can contact your fund for additional information, or ask why the fund doesn't disclose underlying portfolio holdings.

Another area of potential interest is finding out how your fund votes on resolutions at annual general meetings. Again, disclosure by funds can be spotty, but activist organisations such as the Australasian Centre for Corporate Responsibility (ACCR) have been putting resolutions on issues like climate change and human rights to listed companies' AGMs. ACCR has also been pressing super funds on their votes and their disclosure of votes - most recently in its report Two Steps Forward, One Step Back, which looked at how Australia's largest super funds voted on shareholder proposals 2017-2019.

If you find that the fund option that you're invested in has holdings that you're uncomfortable with, have a look at the ethical/SRI/ESG/responsible investing options within your fund. It can be confusing because there's a variety of names that are used by funds, but many of the large funds do offer options that screen out companies on environmental and social grounds, as well as investing in companies that perform well on environmental and social grounds.

Finally, if you're unsatisfied with your fund's holdings or disclosure, it is possible to search for other options and make the switch to one that fits more closely with your performance needs and values.

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Rachel Alembakis is the Managing Editor of The Sustainability Report, a Rainmaker title that examines how investors and companies integrate environmental, social and corporate governance issues into their decision-making processes. She has more than a decade's experience covering investment issues for a range of publications in Australia and overseas.
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