ASFA: Young support superannuation funds on climate change, ESG

Three-quarters of young people are in favour of their super funds taking action on climate change and other environmental, social and governance issues.

ASFA chief executive Martin Fahy. Picture: Hollie Adams

Three-quarters of young people are in favour of their super funds taking action on climate change and other environmental, social and governance issues, according to new data from the Association of Super Funds Australia.

ASFA’s study polled 1375 superannuation fund members across the country, weighted to reflect the gender, age and state of the national workforce.

The results showed that 73 per cent of respondents aged 18-34 supported their funds taking more action on climate change, compared to 64 per cent of all respondents.

The age group least keen on climate action were those aged 50-64, with just 56 per cent of respondents approving of funds taking further action.

That age bracket also had the highest rate of explicit disapproval of funds taking action on climate change, at 27 per cent.

The results come a week after industry super fund REST settled with a 25-year-old member who sued the $57bn retirement savings giant over failing to make public the risks climate change poses to member returns and any plan to deal with those risks.

In settling, REST agreed to a net zero emissions target by 2050 across its portfolio, which will be fully disclosed.

The ASFA study polled fund members on other ESG issues such as corporate governance and female representation.

A total of 64 per cent of respondents said they would like to see more transparent corporate governance from their funds, with that figure represented more or less equally among all age groups.

But when it came to increasing gender diversity, opinions split among age lines: 66 per cent of those aged 18-34 wanted more gender diversity, compared to 56 per cent in the 35-49 bracket and just half for those aged 50-64.

ASFA chief executive Martin Fahy said an overall majority level of support for more action on ESG issues was often viewed from the perspective of increasing fund performance.

“Superannuation funds consider ESG factors from a value perspective, in terms of adding to retirement savings, rather than a values perspective,” Dr Fahy said.

“Superannuation funds and superannuation fund members understand that there is generally only upside in actively and appropriately considering ESG factors.

“The survey results indicate that superannuation account holders recognise that there is a direct correlation between actively managing ESG factors as part of the investment process and positive financial effects. Assessing ESG factors allow superannuation funds to manage risks and invest accordingly.”

The survey also showed that an average of 75 per cent of fund members would like to see the super guarantee rise from 9 to 12 per cent, a figure largely consistent across gender and age lines.