We’re a gutsy advocate for a fair and healthy community to deliver better financial outcomes. HESTA Impact is about using our voice and actions to fulfil this promise.
why Indigenous rights and cultural heritage are important
With the release of the final report from the Parliamentary inquiry into the destruction of the 46,000 year old caves at Juukan Gorge by Rio Tinto, we explore why we’re calling for change throughout the mining sector and for laws that better protect Traditional Owners and their heritage.
Why Indigenous rights and cultural heritage are important
Our vision is for a respectful, confident and equitable Australia.
At HESTA, we think and act holistically about how to achieve strong, long-term investment returns while contributing to a healthier society for our members to retire into. A key part of this is considering whether the companies we invest in have strong and respectful relationships with their stakeholders. This is essential to realising long-term company value.
Yet in May 2020, one our investee companies – Rio Tinto – destroyed 46 000-year-old culturally significant caves at Juukan Gorge in the Pilbara region of Western Australia and with them, the trust with First Nations People around Australia. The destruction of the sites represented a failure to respect the rights of First Peoples and protect cultural heritage of immense significance to the local PKKP people and all Australians.
The cost to investors
The destruction of the caves illustrated how a company’s failures can damage their reputation and community acceptance. When a company’s social licence to operate is damaged like this, it’s shareholders that pay the long-term cost. And that can negatively impact the value of our members’ investments, and, ultimately, their retirement outcomes.
In the case of Rio Tinto in particular, the cost may include:
It’s clear to us at HESTA that relationships between Rio Tinto and the Traditional Owners cannot be rebuilt if priorities, aspirations and perspectives of Traditional Owners are not heard.
The true scope of the issue – not just Rio Tinto
Following the destruction of the caves, we undertook a series of meetings with Rio Tinto.
One of our central asks of Rio Tinto, is for them report to investors how they are progressing in their commitments to rebuild relationships from the perspective of Traditional Owners. Rio Tinto has recently released the first iteration of this report. While the transparency is promising, the Traditional Owner groups who provided feedback are clear there is a long way to go to restore trust.
However, our work on this has not only focused on Rio Tinto.
What was particularly shocking about the Juukan Gorge incident was that not only were Rio Tinto considered leaders in this area, but that the destruction of the caves was technically legal.
This suggested to us the risks posed to investors were not specific to Rio Tinto but systemic in nature. This means the potential risk to super fund members’ retirement outcomes is widespread and significant.
Our concerns about the systemic nature of these risks were validated by the findings of the Parliamentary Inquiry’s December 2020 interim report into the destruction of the caves at Juukan Gorge.
To properly address these risks, we need change, not only at Rio Tinto, but throughout the mining sector and at a legislative and a regulatory level. This requires a multi-faceted approach.
To address broader mining sector risks, we have written to and met with many investee companies to learn about their approaches and to communicate our expectations of how they should partner sustainably with Indigenous communities.
After this series of meetings, we compiled examples of good practices and shared them publicly. Traditionally, investors have relied on company disclosures and meetings to understand and assess how well they are managing systemic risk and their own social license. However, the shocking events at Juukan Gorge showed significant gaps between public commitments and operational reality.
To gain a better perspective on sector risks we have built relationships with Traditional Owners, their representatives, and Indigenous peak bodies. Their generous sharing of their perspectives was essential to us gaining a better understanding of what was happening on-the-ground.
We’ve also been strongly encouraged mining companies to adopt and promote a culture of considering whether they ‘should’ do something rather than whether they ‘can’ do something. As what’s currently legal may not be right as the law in many cases hasn’t kept up with community expectations.
Cultural heritage law reform as core part of our work in this area. That’s why we’re also advocating to improving important legal protections ensure that laws and practices can better adapt to changing community expectations. We have provided numerous submissions to the Parliamentary Inquiry and State consultations on this topic and supporting standards that peak Indigenous advisory bodies have called for.
On occasions where companies make decisions and discover a gap between the letter of the law and community expectations, it’s investors such as HESTA who bear the costs, which ultimately results in lower returns for our members.
How does HESTA see a better future?
As investors, we want to strengthen company accountability and encourage investee companies to build trust with Traditional Owners. We need companies, including Boards, to build trust with the communities whose land they operate on or near and we need them to find a way to honestly disclose their progress to investors.
We want legislation that better protects Traditional Owners and their heritage. If there’s a breakdown of communication or standards by a company, legislation must act as a safety net for communities. The trust of traditional owners is essential in the mining sector, to ensure the long-term investment value on which our members’ retirement outcomes depend.
HESTA's advocacy strategy aims to create greater financial opportunity and prosperity for all Australians, which in turn can strengthen markets and grow our members' retirement savings.
At HESTA, we recognise our influential position in the economy and across society. We also recognise the responsibility that comes with having over 900,000 members who trust us to look after their financial future. This means addressing systemic issues that are at odds with maintaining and building sustainable financial markets and a sustainable economy that rewards all Australians.
To support sustainable economies and deliver real world outcomes, we seek relevant change or development of laws, regulations, standards or guidelines that will lead to long-term performance of markets and reduce failures. We are actively involved in public policy debates that affect our members and women more broadly.
We engage directly with decision makers and contribute to policy debates through our membership of Industry Super Australia, the Association of Superannuation Funds of Australia, and the Australian Institute of Superannuation Trustees.
HESTA policy submissions are available below. For any policy-related questions, please contact James Bennett on (03) 8665 9217 or email@example.com
When the 46,000-year-old Juukan Gorge was destroyed, HESTA immediately called for Rio Tinto to address their internal treatment of traditional owners. HESTA worked with a galvanised network of institutions to achieve an agreement with Rio Tinto on improved disclosure and governance arrangements.
Furthermore, HESTA identified a systemic risk to heritage protected sites, as a result of mining and energy operations. A commitment to strong governance and partnerships with traditional owners will be required to prevent further loss of heritage sites.
In October 2020, HESTA launched 40:40 Vision, an investor-led initiative to achieve gender balance of 40% identifying as female, 40% identifying as male and 40% identifying as any gender in executive leadership across Australia’s largest 200 listed companies.
The 40:40 Vision initiative has created a platform for other companies to pledge their support. Currently, institutional investors representing over $6 trillion in assets have joined HESTA’s commitment to gender balance in senior leadership across all ASX200 companies by 2030.
Over 80% of HESTA members are women. As a gutsy advocate for our members, we invest to influence and advocate for policy change.
Invest with purpose
Investing for long-term performance requires a long-term perspective on how investments improve the planet and society. Superannuation is a lifetime strategy. HESTA invests for the whole journey.
HESTA Impact & UN SDGs
With the United Nations Sustainable Development Goals (SDGs) as our compass, we’re delivering long-term value for our members, our community and our planet.