Ecopool - A Quiet Revolution

Socially Responsible Investing (SRI) is generally defined as choosing an investment to achieve social and environmental as well as financial returns. It often involves using a 'screen' to exclude or include companies based on the investment objective.

In February 2000, HESTA introduced the first environmental-focussed investment option to be offered by a superannuation fund in Australia – HESTA Eco Pool. Today Eco Pool allows your super to be invested in companies and properties that demonstrate superior performance across a range of environmental, social and governance criteria, while still offering a return that is expected to be comparable to HESTA's Core Pool return.

Enabling you to direct your super investment to environmentally and socially progressive companies can be a significant and growing incentive for large companies to respond positively to community demands for a safer, cleaner and more sustainable management. So, by investing in Eco Pool, you acknowledge and reward companies that demonstrate they take our environment and community seriously..

How does Eco Pool invest?

As with other investment options, Eco Pool comprises different asset classes including Australian shares, international shares, Australian property and cash. The proportions invested into each asset class may change over time as will the underlying investments in each asset class.

Eco Pool currently invests 45% in Australian shares, 35% in international shares, 10% in Australian property and 10% in cash. The big difference is that all the investments in Eco Pool are selected based on an assessment of both in-depth financial analysis and active environmental, social and governance monitoring.

For the Australian and international shares component, companies are classified according to industry sectors such as insurance, telecommunications and building materials. They are then evaluated for their environmental, social and governance performance within their sector. Then combined with an assessment for healthy financial performance, investments are made in the best-rated companies in each sector, known as the 'best of sector'.

This acts as a positive incentive for companies to improve environmental, social and governance practices and performance. The only companies which are specifically excluded from the Eco Pool Australian share investments are any companies which are involved in uranium mining.

Eco Pool also includes a 10% allocation to Australian properties that meet HESTA's Responsible Investment criteria. In particular, the Eco Pool property investment has a rating of 4 green stars under the Green Building Council of Australia's guidelines and has a NABERS Energy Base rating of 4.5 stars.