11 September 2019
HESTA named among global leaders in responsible investment
HESTA was recognised as a global leader in responsible investment when it was named today in the Leaders’ Group by the UN-backed Principles for Responsible Investment (PRI).
Launched for the first time this year, the Leaders’ Group consists of 47 asset owners who are recognised for being on the cutting edge of responsible investment, leadership and innovation.
“HESTA has for many years been a global pioneer in responsible investment as this ongoing stewardship underpins strong, long-term investment performance and our ability to have a positive impact on the world our members will retire into,” HESTA CEO Debby Blakey said.
“We are thrilled to be recognised in this first group of global leaders and it is a testament to the organisation-wide commitment to responsible investment from our Board right through to our investment team and external partners.”
When identifying signatories to the Leaders’ Group, the PRI took into account the level of transparency of reporting to the PRI, responsible investment practices across all asset classes and the asset owner’s approach to strategy and governance.
Each year the Leaders’ Group selection methodology will also focus on an area of responsible investment.
In 2019, global leading asset owners were recognised for their selection, appointment and monitoring of external managers in listed equity and private equity.
HESTA CIO Sonya Sawtell-Rickson said the investment team had an established framework for assessing and monitoring their investment managers’ responsible investment performance that informed ongoing engagement.
“We’re continually looking to improve the integration of responsible investment practices across our investment managers through constructive engagement and education,” Ms Sawtell-Rickson said.
“This kind of engagement is really about sharing knowledge and advancing standards that set higher market expectations and supports deepening the relationships with external managers, so we’re a global investor of choice.”
In recent years, HESTA has internally developed methodologies to incorporate responsible investment considerations into ongoing assessment and monitoring of investment managers.
This includes a 100-point scoring system for private equity managers that looks at the way they assess and integrate environmental, social and governance (ESG) considerations into their investment decision making. This score then informs manager engagement and ongoing improvement.
To help foster improved responsible investment practices in the asset class, HESTA was a member of the PRI ESG Monitoring, Reporting and Dialogue in Private Equity. A member of the Dialogue’s Advisory Committee and Working Group, HESTA helped formulate guidance to private equity managers on incorporating responsible investment considerations into their investment decision-making.
Recognising the considerable evidence that greater diversity improves decision making, in 2018 HESTA surveyed 70 of its Australian and international investment managers about the gender diversity of their teams.
This focus on gender diversity extends across the Fund’s ‘investment value chain’, including internal investment operations, external managers and partners, and the companies in which it invests.
A list of asset owners named in the PRI Leaders’ Group can be found here.