ESG Town Hall events
Insignia Financial’s recent Town Hall events in Melbourne and Sydney allowed employers to hear firsthand how our organisation is pursuing strong ESG and responsible investing initiatives to help give members a more sustainable future.
If there was a burning question on the minds of attendees at our recent Environmental, Social and Governance (ESG) Town Halls it was this: what is the cost to investors of being ‘responsible’?
Our recently appointed Head of Responsible Investing, James Tayler, gave a clear, unequivocal answer.
“There’s no evidence of a material cost to the investor from responsible investing,” he told the packed conference room of representatives from all four of Insignia Financial’s employer super members, including Plum, MLC MasterKey, ANZ Smart Choice and IOOF Employer Super.
“I think one of the biggest issues is a lack of understanding,” he continued. “If you think of it as just trying to identify material risks around these new externalities that capital markets are starting to price in, the outcome is better with this additional risk management.”
These events, the first in a series of regular face-to-face presentations for our biggest corporate clients, marked an important milestone for our newly combined financial business, now Australia’s third largest superannuation provider.
As General Manager of Workplace Superannuation Jason Marler told the audience, ESG issues are becoming increasingly important to businesses and individuals. The events were designed to share the important work Insignia Financial has already done over the past 18 months in developing rigorous ESG frameworks and its goals for the future.
And after the past two years of disruption, it was also a great chance for attendees to enjoy a rare face-to-face networking opportunity. The high turnout at both breakfasts indicate an appetite for more ‘in real life’ interactions.
Guests listened to our experienced senior ESG and RI leaders provide an overview of our work to date, both internally and externally, as well as previewing an upcoming bespoke SRI investment option that will cater to the growing demand from members for socially responsible investments.
Each event began with a Welcome to Country, delivered in Melbourne by Elder Uncle Ringo Terrick, of the Wurundjeri people and in Sydney by Craig Madden, Gadigal Bundjalung man and member of the local Metropolitan Local Aboriginal Land Council.
Afterwards, Jason Marler talked about the importance of ESG goals to Insignia Financial.
“Our ambition is to create financial wellbeing for all Australians,” he said. “We cannot achieve that ambition over the long term unless we and the companies we invest in operate sustainably.”
Next, recently appointed Head of ESG Steve Black took the stage to talk about Insignia Financial’s ESG activities at a corporate level, from closing the organisation’s gender equality gap to announcing the achievement of Climate Active Certification for being a carbon-neutral organisation.
But while proud of these successes, Black suggested the organisation is not resting on its laurels.
“It’s certainly not the endgame to be carbon neutral,” he said. “We’re currently calculating our 2022 emissions so that we can make a 2030 commitment around reducing our emissions.”
James Tayler offered insights into how our approach is being rolled out across the combined businesses.
In particular, he highlighted the importance of Insignia Financial’s membership of Responsible Investment Association Australasia and our intention to become a signatory of the Principles for Responsible Investment, the world’s leading proponent of responsible investment.
The process is a two-stage assessment. The first assessment is private and the second will result in a public star-rating across each of the six RI principles.
“That is the first independent assurance, if you like, of us as responsible investors,” Tayler said.
Investment Governance General Manager Orla Cowan offered an insider’s view of how the Insignia Financial team has worked to create a set of RI beliefs for the trustees, which enables us to create a credible roadmap for the future, as well as the necessary reporting and measuring that forms the ‘governance’ part of the equation.
“I don’t know how many of you are familiar with dealing with trustee boards, but they’re complex and complicated,” she said. “So, bringing them all together and actually being able to agree and enunciate on what our beliefs are is no minor feat.”
Cowan also previewed the exciting news about the organisation’s launch of its first ever purpose-built Socially Responsible Investment (SRI) option.
“It can have certainty over exposure in certain controversial holdings, so that we have in-house investment considerations in a specific option,” she said. “It does signal our awareness and commitment to RI, but again, like all things, it’s not set and forget.”
After a market update from Chief Investment Officer Dan Farmer, the events wrapped up with a Q&A session. Not surprisingly, the first question was around the cost of RI – a question particularly relevant to superannuation funds, which have a duty to comply with the financial best interests of members.
It was a question our panel was well-prepared for. They cited meta studies and research confirming that responsible investing was, at the very least, no riskier than investing without a responsible lens.
One attendee also queried our attitude to divestment as a way of achieving ESG goals. Tayler argued that when it comes to understanding the ultimate goals of an ESG policy, divestment could sometimes backfire.
“Philosophically, we think that divestment is kind of the last resort,” he said. “At the end of the day, the risk is that the asset ends up in the hands of capital that cares less about the environmental or social impacts. So we will not be pursuing, across the board, a huge amount of negative screening.”
Early in the presentation, Marler pointed out that many of the 100,000 new members Insignia Financial welcomes every year are under 20 years of age and possibly starting their very first job and their first super account.
“Our hope is that we are paying retirement income to some of those people in more than 80 years’ time when they turn 100,” he continued. “When you think about these sorts of time scales… the need for us to have robust ESG frameworks comes into stark focus.”