Responsible investment (RI) superannuation options have performed strongly over the past year, according to a recent SuperRatings survey.
SuperRatings found that sustainable superannuation funds outperformed during the year to April 2015 – sustainable Australian shares funds produced a 10.5 per cent median return, compared with a 9.5 per cent for the median Australian shares option.
SuperRatings chief executive Adam Gee said: “The performance data clearly shows responsible investment options remain competitive with mainstream superannuation investment options.”
“This should help provide members and fund managers with confidence when considering environmental, social and governance issues in their investment mix and in the way the funds manage their own operations.
“Social responsibility, environmental issues and sustainable investing are common and popular themes for investors including superannuation members,” he said.
The survey found that 80 per cent of funds said they have a responsibility to consider ethical factors in their investment strategies.
While similar to environmental, social and governance (ESG) investment, RI is primarily motivated by ethical considerations as opposed to risk management.
“As the retirement savings system continues to mature and as people become more engaged with their superannuation, we expect an even greater focus on sustainability,” he said.
Almost all funds surveyed said they exclude investments in certain sectors based on their ESG policies.
“This is expected to lead to a much greater growth rate for awareness and access to sustainable investing in the future,” Mr Gee said.
Funds surveyed also adopt positive screening – about 33 per cent actively look for clean technology while 30 per cent sought investment into renewable energy.