Responsible Investment - Our Approach

As investors, we have a duty to always act in the best long-term financial interests of our members. This means that we have to take into account in our decision making a range of longer term factors that are often not reflected in short term financial measures of performance. In particular, we believe that sound prudent management of our members’ money requires us to incorporate the assessment of environmental, social, and corporate governance (ESG) risks and opportunities as an integral component of our decision making processes. This is what we call Responsible Investment.

Catholic Super was the first Australian institution to sign the United Nations Principals for Responsible Investment (PRI).  Over $20 trillion of investor funds have now become signatories.  The PRI has provided us with a very strong framework around which to base our consideration of ESG issues as well as assisting us to coordinate with like-minded investors around the world to bring about meaningful change in both corporate behaviour and government policy.

One powerful tool that we have used in our efforts to effect change has been collective engagement with the corporate world.  This means working with other investors to establish a constructive dialogue with corporations to ensure that they are properly managing their exposures to ESG risks.  This both lowers their overall level of risk and helps ensure the long term sustainability of their business.  Such risks include: climate change, excessive executive remuneration, poor corporate governance, occupational health and safety, human capital management and poor corporate practices that expose investors to reputational risk.

To assist in these engagement efforts, and to strengthen our efforts to ensure better regulation of the corporate world, Catholic Super is a major sponsor of three relevant organisations.  In Australia we work with both the Australian Council of Superannuation Investors and engagement specialist, Regnan, to work with individual companies in which we invest to try to ensure that their operations meet the highest possible standards of governance and that they appreciate and manage environmental and social issues relevant to their business that could undermine the company’s value.

As regards the management of ESG risks associated with our international investments, Catholic Super has employed the services of F&C Investments, one of the world’s largest and longest established experts in the field of ESG engagement.

Catholic Super’s approach also includes being an active member of both the Australia/New Zealand and the International Investor Groups on Climate Change (IGCC) and of the huge international effort that is the Carbon Disclosure Project.

Most importantly, we are making a difference. As a result of our engagement and our focus on climate change we are seeing very significant change in the corporate world.  This should help make our portfolios more resilient in what is a very challenging world.