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Funds shouldn’t be bullied by activists: UniSuper
Superannuation funds should be aware of and listen to activist groups on environmental, social and governance (ESG) issues but should not be bullied by them, head of UniSuper Kevin O'Sullivan said.
Speaking at the 2014 Association of Superannuation Funds of Australia (ASFA) conference last week, O'Sullivan said a super fund's top objective should be to provide members with sustainable investment performance, but opinions will vary on what investments are good for members.
"It's up to the fund's trustee, management, and advisers to consider and decide without acquiescing to extreme pressure and campaigning from non-members or from a vocal minority of members," he said.
When screening investments, O'Sullivan asked how far up the investment supply chain one should go because going too far up means one will end up with a meaningless investment universe.
"Tobacco is a good example. You get rid of tobacco, Amcor packages cigarettes, do you get rid of that? Toll Holdings transports the cigarettes. Do you get rid of them? These are the types of questions that you need to consider," he said.
He also said that while members can influence the product range trustees can offer, they cannot and should not influence the investment process.
"A quantitative approach should be taken and funds should remain commercially pragmatic.
"The funds should only make decisions if it makes sense for them, not just for the community. I'm not saying you shouldn't do things for the community but it has to be good for the members."
Around 32,000 out of 440,000 members of the fund have invested in the sustainable, balance, growth and global environmental opportunities option at UniSuper, totalling $1.7 billion.
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