Home' Superfunds : Superfunds June 2018 Contents investment option, such as Catholic Super, do so by investing in assets that
display a clear and tangible positive environmental or social impact. The
option includes carefully selected avenues for impact through private equity
to other growth assets such as overseas shares and infrastructure.
THE IMPACT OF IMPACT INVESTING
Looking at some of the figures from the “Australian Impact Investing Activity
and Performance Report 2016”, we can see that:
• 60,000 vulnerable Australians have been given access to health,
education and job training services
• 126 schools improved through new facilities, training and inclusion
• 319 jobs were created, including those typically marginalised from
mainstream employment such as the long-term unemployed
• 1,072 people with disabilities have been supported through funding of
disability support enterprises
• 11,501 MWh renewable energy generation created through investment
in wind farms.
This list is by no means exhaustive but gives insight into the real impact that
these options are increasingly having on improving social and environmental
initiatives. It is through measuring this impact that there may be increased
engagement of Millennials in investing, particularly those mandated SG
contributions that Millennials will have their whole working life. Arguably,
if a fund can measure Millennials’ positive impact on various social and
environmental issues, a buy-in is created that resonates with the displayed
values of the group.
MEASURING THE IMPACT
If impact investment options do have the ability to engage Millennials, there
must be a framework or some accountability to deliver results for members
otherwise funds run the risk of muddying the waters with different metrics
for results. Results in this instance are defined as both returns and impact.
We have already established that the impact option itself, to be attractive
as an option, must not sacrifice returns in the search for impact. In similar
fashion, funds must find a way to measure impact. Looking at a number of
impact investment funds that publicly disclose how they measure impact,
it can be seen that the majority employ more than one measurement
framework. This appears to be the case as with the diverse range and
number of social and environmental issues impact investments touch on,
there is no single framework to measure the individual impact on each. This
can make it extremely difficult to compare the impact of impact options.
With super already being seen as having complexities or barriers for
engagement of Millennials, a simple, transparent, industry wide framework
is a must for measuring impact. If this is done well, there is opportunity
for increased engagement, for example a Millennial with a particular social
issue close to them such as Global Warming, could invest in an option that
specifically measures the positive impact on Global Warming initiatives. This is
a critical measure as without impact, there is no impact investment.
THE VALUE OF REPORTING
As impact investing grows among financial services—including super
funds, investment managers and major investors—returns, impact and
its infrastructure will become more mainstream and comparable to other
more traditional investments. As Millennials move through their careers
and look for that greater sense of purpose and ways to impact upon social
and environmental issues that mean something to them, impact investment
options present an easy way to do so. As these options are taken up and
continue to become more mainstream, the reporting on the real impact
these options have on important social and environmental issues will give
that added sense of satisfaction to Millennials and potentially shift that
engagement barrier super funds are currently working through.
This reporting will also create visibility which, along with successful
proactive engagement campaigns by super funds, may create the push that
Millennials are looking for – the value alignment with a fund that looks after
their best interests and strives for a positive impact on our world.
Michael Huskisson is a business development and senior superannuation
specialist at Catholic Super.
Superfunds June 2018
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