UN PRI’s annual conference in Paris last week attracted a record 1,700 attendees among asset owners and managers, including nearly 100 from Australian and New Zealand, also a record. It included the formation of an asset owner ‘leaders’ group’.
There were three major themes to emerge from the conference, according to long-time PRI supporter and ESG expert Matt Christensen, the Paris-based global head of responsible investment for AXA Investment Managers. He attended with Craig Hurt, the Sydney-based director of Australia and New Zealand for the firm. Those themes were:
- A move into private markets. “ESG has always been a publicly listed asset discussion,” Christensen said. “But now the private markets are becoming more represented. Institutions themselves are being more represented in private markets so they are going straight into that… With real assets, Australia has tended to lead the discussion, but that, too, is now broadening out, especially in Europe, which has been leading the way in impact investing.”
- Impact investing. There appears to be a growing realisation of the complexity of ESG. As both investors and other participants recognise, there is a long chain when you examine the interconnectivity of the world in most ESG factors. Christensen said that the two areas which AXA IM thought a lot about were impact and screens. Both were complex. Another discussion point was the SDG…… goals, which are political and not all are investable. “But let’s make one of them an impact goal,” he said.
- The importance of government. The big discussions with government were climate change, inequality and leakage. There was also the recurring discussion on the use of nuclear energy. From an environmental standpoint it is good, as the French want people to believe, because it is clean and efficient. But from a social standpoint it is bad, as the Germans believe, because if something goes wrong it can kill a lot of people.
Hurt said that there had been a lot of work done by Australian funds in particular over the past 18 months who were looking to send participants to PRI and where their interests lay. He said that 80 per cent of all new business won by AXA IM in Australia had been ESG related. He also believed that there was a responsibility on managers to turn the business away if the mandates did not fit the original goals and policies of the manager.
“When you have a large asset base you have a responsibility to the greater position. I think we will see a big divide in the investment management community.”
Of the 47 ‘leaders’ group’ members announced last week, six are Australian funds and two are New Zealanders. This is the report on the group and full list of member funds.
The Australian funds are: Cbus, First State Super, Hesta, Local Government Super Scheme, Vic Super and Vision Super. The New Zealand funds are NZ Superannuation Fund and Trust Waikato.