Australia's state run retirement plans are throwing off their reputation as passive investors.
They're making governance and environment and social responsibility part of their mantra, pushing for a ban on single-use plastic bags at supermarkets, lobbying miners to take action on climate change and demanding companies hire more female directors. The super industry in Australia is growing exponentially, almost tripling over the past decade and expected to top A$5.4 trillion ($3.8 trillion) by 2029, and funds have been buoyed by recent ESG wins.
"Australian superannuation funds are sensible, and they use their power wisely," said Fiona Reynolds, the London-based CEO of Principles for Responsible Investment, a UN-backed organization representing $82 trillion in assets under management. "I don't think they abuse it."
The conversations taking place between big business and money managers estimated to own an average of around 14% of every S&P/ASX 200 listed company is in contrast to the ruling Liberal Party's stance. Prime Minister Scott Morrison hasn't made climate change a top priority in the lead up to this month's federal election, angering voters. An Organization for Economic Cooperation and Development report in January slammed Australia's efforts to fight climate change, noting that environmental issues have been a catalyst for political instability.