NGS Super, the Australian super-fund, says it is turning away from its environmentally focused investment option and starting a socially responsible fund after its investors showed little interest in going green.
NGS Super, which has A$5.5 bn ($5.08 bn) in assets under management, underwent a consultation with its investors after the failure of its venture into environmentally responsible investment options and found they preferred a socially focused option. The new fund will steer clear of investments in armaments, pornography and tobacco.
‘Our green shares are our least subscribed option,’ NGS Super chief executive Anthony Rodwell-Ball explains, as quoted by the Financial Standard newspaper. ‘Of A$5.5 bn, we have only $22 mn in the green shares option. It’s been a matter of considerable interest to us for a number of years.’
Besides the focus on a different area of investment, Rodwell-Ball says the socially responsible option will be much more diverse than its green counterpart and less volatile as a result. While NGS Super investors generally support environmentally focused initiatives, the fund’s green investments have proven much more volatile than many expected, Rodwell-Ball adds.
‘Members are not silly – they see volatility and they understand the underlying risk, and therefore they vote against it, because they know their hard-earned dollars need to stretch a long way in retirement,’ Rodwell-Ball told the paper. He said NGS Super, which mainly serves non-government education and community-focused organizations, expects the new investment option to attract more than double the level of interest its green option attracted.
The company, which is a signatory to the United Nations Principles for Responsible Investment, the Carbon Disclosure Project and the Investor Group on Climate Change, emphasizes its focus on the environment in its materials for investors, saying it seeks ‘investments that consider environmental, social and governance principles’.
