Your Superannuation Fund is Triple-A Rated
- Details
- Published: Thursday, 13 December 2012 12:58
Not by a ratings agency like Standard and Poor’s (which was so discredited in the Global Financial Crisis) but by an International Report by the authoritative and respected Asset Owners Disclosure Project.
And not just one of the two funds Triple-A rated out of the 300 largest institutional investors in the world, but Local Government Super was rated number 1.
Number 1, numero uno. Check out how the Sydney Morning Herald reported it on 12.12.12.
But first, some history in which depa has had a critical role. LGS separated from State Super and First State Super in July 1997 and in 1998, as a result of a report I wrote as a Director and submitted to the Board, LGS resolved to never own tobacco again. There had been history of professional health workers in State Super agitating for State Super to not own tobacco shares because of the fundamental conflict between the damage done by tobacco and the work done by health professionals and the undesirability of their superannuation fund investing in such a murderous industry - where are even using the product in accordance with the manufacturer’s recommendation can kill you and those innocents passively smoking around you.
This decision was easy to make because back testing showed that it really didn’t matter for investment returns whether LGS owned tobacco or not, but the decision started the LGS on what has become an irreversible commitment to responsible or sustainable investment - avoiding bad environmental practices through not owning shares in Gunns while devastating vast areas of Tasmanian wilderness, the miseries of gambling by not owning shares in Aristocrat etc - and all along be able to establish that this actually added to the Fund’s financial performance. LGS had worked out that there were risks associated with these investments that were not being properly factored into investment decisions of fund managers.
Since the early 2000’s Local Government Super has had this sustainable/responsible approach operating on its Australian shares and for the past year or so on international shares. At the same time a significant commitment to upgrading the sustainability status of the funds $600 million of directly held property has seen astonishing reductions in energy consumption and water use as well as a significant reduction through recycling programs of landfill.
All this has led to awards like these:
| - | SuperRatings Infinity Awards 2010 and 2011 |
| - | Money Magazine Best Green Super Fund 2011 and 2012 |
| - | NSW Government Green Globe Awards 2011 and in 2012 the Energy Award and Climate Change Leadership Award |
| - | Sustainable Super fund of the Year Award 2010 - Ethical Investor |
| - | Asset Owners Disclosure Project 2009 and 2010 ranked number one in Australia |
| - | Numerous property awards including a Property Council of Australia Award this year for the best sustainable development of an existing building in Sydney's Sussex Street |
| - | 40% reduction in energy use since 2009 and Leichardt's Market Place has reduced its energy by 50% over that period |
Since 1999 LGS has provided renewable energy as base power in all its properties and requires tenants renewing leases to sign up for renewable energy as a condition of a new lease - providing consulting advice to assist with energy reduction to make this as cost neutral as possible. And, using significant funding from the government’s Green Building Fund, an LGS property in Macquarie Park has the largest photovoltaic cells installation in a multitenanted commercial building in Australia and a property in Berry Street at North Sydney has a tri-generation plant coming online as we speak.
And Local Government House in Margaret Street where the Fund has its office is the first multitenanted commercial building in Australia to be 100% renewable energy the Asset Owners Disclosure Project was piloted in Australia in 2008 by the Climate Institute and the Australian Institute of Superannuation Trustees (I declare an interest here as I was Chair of AIST and pushed this) and it encouraged institutional investors like superannuation funds to disclose their strategies to deal with the risks of carbon in anticipation of a low-carbon future. This project now operates internationally and the Report published on 11 December ranked 300 of the largest institutional investors, pension funds, superannuation funds on their management of carbon risk and LGS was ranked number 1.
This is something of which or members of the fund can be extremely proud.