Australia currently has 141 signed and active ESG investment providers that have products aligning with the United Nations Principles for Responsible Investment (UNPRI), making Australia the fourth most active country for ESG investment awareness.
One quarter of Australia's ESG investment providers are superannuation funds and almost half of Australia's superannuation savings are overseen by funds and investment managers that follow ESG investment principles.
These insights are revealed by Rainmaker Information, which publishes the superannuation information portal www.selectingsuper.com.au.
The latest analysis further indicates that ESG superannuation investment options are among some of the better performing options across one, three, five and ten years.
AustralianSuper's 'Socially Aware' option is the best option over 10 years in the balanced sector, HESTA's 'Eco-Pool' growth option is the fourth best over ten years and fifth best over five years in the growth sector, while WASuper's 'Sustainable Future' option is the sixth best balanced option. This performance is all relative to the three years to April 2019.
Alex Dunnin, Executive Director of Research at Rainmaker Information explains "these results show that investors give up nothing when they invest according to ESG principles, though a fund following ESG principles should never be used as an excuse for under-performance."
Supporting this is a 0.6% performance gap in favour of ESG options over the one year period to April 2019.
"And this is the point of ESG - it's all about taking into account the long term risks which must include environmental and sustainability factors. The debate about ESG has long moved on from having to defend investing this way. In fact, it's now the other way around - how can long-run investors not take these factors into account?"
Dunnin added that "the increase in funds invested into ESG related products as well as an increase in the number of super funds following these principles across their whole portfolio highlights that following ESG principles is simply good practice. It's no coincidence that the Reserve Bank and the superannuation regulator have the same view on this."
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Total risk market inflows were down a marginal 0.6% over the year to June 2024, decreasing from $18.3 billion to $18.2 billion.
Dual access ETPs, which are transacted both on stock exchanges and off-market through funds managers, can cost four times as much as the rest of the Australian ETP market.
