Impact Investments: Perspectives for Australian superannuation funds

Abstract

Australia, like many jurisdictions around the world, has witnessed increasing interest and activity in impact investment over recent years as businesses, governments and communities seek new solutions to enable an inclusive and sustainable society. Philanthropists, foundations and charities as well as institutional investors have implemented impact investment strategies. These strategies aim to yield financial returns, as well as positive and measureable social and environmental impacts. While some investors pursue commercial financial returns, others consciously elect to accept reduced financial returns in the interests of pursuing greater impact. Anecdotal evidence would indicate that a well-executed impact investment strategy provides trustees the opportunity to build investment portfolios aligned to member’s values and with unique exposure and uncorrelated diversification to a wide range of geographies and sectors. All factors that support impact investment having a legitimate role within superannuation fund portfolios.