This study explores Australian attitudes towards the active ownership practices of superannuation funds and analysis of the financial materiality of sustainability issues.
While many Australian superannuation funds currently engage in active ownership, there has been little publicly available research to date that explores Australian superannuation consumers’ levels of awareness of and support for the approach – or indeed their views on how their funds approach investment at all. In response to this gap in knowledge, this report also outlines key findings from quantitative and qualitative research conducted by The Insight Centre on Australian superannuation consumers’ existing awareness of active ownership, and their levels of support for active ownership, and alternative approaches, when they are made aware of what it entails.
Key findings from the consumer survey of 1,908 Australian super fund members include:
- While baseline awareness of active ownership as a concept is low, a strong majority of super fund members support superannuation funds engaging in active ownership practices:
- Nine in 10 (92%) surveyed want their superannuation fund to invest in companies that have a positive impact on people, communities and employees.
- Nine in 10 (91%) agree funds should use their influence to encourage good governance.1
- Nine in 10 (90%) want their superannuation fund to encourage the companies it invests in to manage the risks of unfair treatment of workers.
- Eight in 10 (81%) want their fund to use its ownership status to encourage responsible environmental management on issues that affect performance and returns.
- Australian super fund members strongly prefer their fund engage in active ownership over limiting their engagement with companies or taking a divestment approach. When provided with descriptions of each approach:
- Eight in 10 (79%) consumers say they would prefer their fund to engage in active ownership over divestment approaches.
- Seven in 10 (71%) consumers prefer their fund to engage in active ownership over limited engagement.
Overall, these findings indicate strong organic support for active ownership and a strong alignment between member expectations and active ownership principles. The report concludes that active ownership represents a useful strategy for superannuation funds that aims to enhance and protect member returns, at least in the long term. As awareness of active ownership grows, superannuation funds have an opportunity to further engage with their members, enhancing transparency and trust. The research is also relevant to regulators, policymakers, boards and executives, who can take confidence that the widespread acceptance of this approach in the financial sector is reflected in consumer support.
