Future Group, which manages over $15 billion in funds under management, has struck a new deal with an index provider to home in on its sustainable investment principles.
Future Group has announced a new partnership with Scientific Beta to develop an international equities strategy that is “aligned with sustainable investment principles and members’ best financial interest”.
According to the group, Scientific Beta has helped develop an investment strategy designed to enhance long-term performance while aligning with Future Group’s sustainability objectives, and will enable new investments that screens out fossil fuel, tobacco, weapons, nuclear energy and gambling companies.
This comes as recent findings from the Responsible Investment Association of Australasia (RIAA) show that 88 per cent of consumers expect their superannuation to be managed responsibly and ethically.
Future Group’s executive director of investments, Sharon Davis, commented: “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.”
“The decision is a proactive step to ensure sustainable growth and financial security for our smartMonday and Guild Super members,” Davis continued.
According to her, the partnership is also part of a wider program of reinvestment in climate solutions and positive impact investments across the funds that Future Group has recently acquired.
The ethical investor clarified that the screening out of fossil fuel companies also aligns with insights from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC).
This, Future Group said, showcases the “diminishing viability of fossil fuels and the growing economic risks associated with these assets as governments and corporations around the world progress towards their net zero commitments”.
Scientific Beta deputy chief executive Daniel Aguet said that the index provider looks forward to supporting Future Group on this initiative.
“The strategy that we have built relies on our expertise to integrate sustainability considerations into multifactor strategies to deliver long-term risk-adjusted performance improvement compared to the market cap benchmark and doing good,” Aguet concluded.
Earlier this year, Future Group credited a responsible investment approach for the strong results delivered by two of its ethical superannuation funds in FY24.
Namely, in the year ended June 2024, it announced Future Super’s Balanced Index option delivered an annual return of 10.1 per cent, while Verve Super returned 9.9 per cent.
The two super funds employ a negative screening approach of screening out fossil fuel companies, as well as gambling, tobacco and weapons companies – an approach that allows the funds to allocate more than the benchmark to other sectors, like technology.
“Our returns are built on a foundation of responsible investing, avoiding fossil fuel companies means we have more space to embrace other, growing sectors like tech, AI, health and renewable energy,” Davis said in July.
“Locally, the fossil fuel sector was not a strong performer this year, while globally the technology sector, benefiting from the AI boom, performed exceptionally well.”
