Investment

Future Group ramps up screening

GuildSuper, Child Care Super, and smartMonday have not been marketed as sustainable funds in the past, however going forward their international equities portfolio contains no investments in fossil fuels, weapons, nuclear energy, and gambling.

For tobacco however, there is a 5% threshold for distribution revenue and a 0% threshold for production.

Future Group also owns Future Super and Verve, which have been marketed as sustainable super funds, and have much more comprehensive screening criteria in place including for alcohol, animal cruelty, detention centres, and pornography. The new strategy does not apply to these two funds.

Future Group partnered with Scientific Beta to build the strategy which avoids industries with high ESG risk and aligns with the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).

The group said it will channel capital towards climate solutions, noting that fossil fuels are diminishing in viability as both public and private sectors across the world move towards net zero.

Sharon Davis, executive director of investments said the strategy represents a significant shift in investment thinking.

It's "part of a wider program of reinvestment in climate solutions and positive impact investments across all our superannuation funds that we have recently acquired."

Future Group is a collective of super funds and financial services overseeing $15 billion with 383,000 members. It took over smartMonday in 2022, followed by Guild Super and Child Care Super in 2023.

"Superannuation is a long-term investment, and we have a responsibility to safeguard our members from the asset risks associated with fossil fuel companies and other harmful industries," Davis said.

Scientific Beta deputy CEO and index director Daniel Aguet said the strategy "relies on our expertise to integrate sustainability considerations into multi-factor strategies to deliver long-term risk-adjusted performance improvement compared to the market cap benchmark and doing good."

Equity Trustees is the Responsible Entity of the new international equities investment, with State Street Global Advisors acting as implementation manager.

According to the Responsible Investment Association of Australasia (RIAA), a majority (88%) of consumers want their superannuation managed ethically.

Read more: Future GroupChild Care SuperGuildSuperScientific BetaDaniel AguetEquity TrusteesFuture SuperInternational Energy AgencyResponsible Investment Association of AustralasiaSharon DavisState Street Global AdvisorsVerve