investment excellence with impact

On this page: 

• Investment excellence and performance
• Responsible investment
• Our responsible investment approach
• Active ownership and share voting

investment excellence and performance

Superannuation is a long-term strategy, and HESTA has a history of delivering strong long-term returns for members. 

Our investment performance has been highly ranked across the industry. For HESTA super members, Balanced Growth, Conservative, Sustainable Growth and High Growth have all been ranked in the top 10 for investment performance against their respective peers over 10 years to 30 June 2024.^*

And we've been awarded the 20-year platinum performance rating from SuperRatings — the highest rating possible.^*

Take a look at the latest performance for all the HESTA super investment options. 

View our investment performance

*Balanced Growth, Conservative and High Growth option rankings in the respective SuperRatings Accumulation Fund Crediting Rate Surveys June 2024. Sustainable Growth ranking in the SuperRatings Sustainable Fund Crediting Rate Survey June 2024. Product ratings are only one factor to be considered when making a decision. Visit SuperRatings for important information about this rating. Investments may go up or down. Past performance is not a reliable indicator of future performance.

responsible investment

We believe that members' best financial interests are served by having a deep commitment to responsible investing.

Responsible investment is an approach to investing that incorporates the consideration of environmental, social and governance (ESG) risks and opportunities into investment decision making and active ownership, to deliver strong long-term returns.

Read our Responsible Investment Policy (pdf), which outlines the principles and commitments that direct our approach to responsible investment. 

Our responsible investment approach

We integrate responsible investment factors throughout our investment process to enable a better understanding and management of risks and opportunities, and to deliver strong long-term returns for our members. We seek to partner with organisations who demonstrate alignment with our values, culture, purpose and investment beliefs, including our commitment to responsible investment.

Our approach to responsible investment is underpinned by industry codes and frameworks including:

• Principles for Responsible - Investment ('PRI');
• United Nations Sustainable Development Goals ('SDGs');
• Paris Aligned Investment Initiative ('PAII');
• Australian Asset Owner Stewardship Code ('Stewardship Code');
• ACSI Governance Guidelines.

Managing systemic issues

As a large and diversified asset owner, the financial performance of our portfolio is supported by a strong and stable market and influenced by systemic risks. Factors such as gender equality, decent work, and good health and wellbeing support strong market fundamentals including economic growth that drive member investment returns, while systemic risks such as climate change and biodiversity loss have the potential to undermine these.

System level issues cannot be mitigated through diversification or divestment. We endorse the ambitions of the United Nations Sustainable Development Goals ('SDGs') as an ambitious framework to address systemic risks and identify areas of opportunity.

Our resourcing prioritises a number of SDGs:

• Climate Action
• Good Health and Wellbeing
• Gender Equality
• Decent Work
• Sustainable Cities and Communities
• Biodiversity

We aspire to contribute to outcomes aligned with the aims of these priority SDGs through our capital allocation and active ownership. HESTA has more than $11 billion invested across the total portfolio in alignment with the priority and broader SDGs (at 30 June 2023).

Learn more about the Sustainable Development Investments taxonomy in our Annual Report (pdf).

active ownership

Active ownership is the process by which HESTA seeks to leverage its rights as a shareholder or lender to influence management of responsible investment factors that can impact long-term returns at both the company and market level.

As a long-term investor that expects to own an asset for a number of years, we see active ownership as especially important in serving the interests of our members.

Watch this short video to find out more.

We do it through:

Engagement

This involves a constructive communication with companies to help us better understand their business model and influence their performance and practices. Engagement with portfolio companies is undertaken directly by HESTA through collaborative initiatives and indirectly through specialist service providers and our external investment managers.

HESTA believes in the power of collective action for tackling systemic issues, as collaborating often enables us to amplify our voice and drive action while using our resources efficiently. By combining these different approaches to engagement, we're able to achieve both breadth in terms of the number of companies covered by our engagement program as well as depth by focusing our direct engagement on those issues or holdings that are most material.  

We partner with the Australian Council of Superannuation Investors (ACSI) for engagement with Australian companies and with Federated Hermes EOS for international companies. Read more about engagement through our partners:

• Engagement with Australian equities - ACSI
• Engagement with International equities - Federated Hermes EOS

We provide regular input into and monitoring of annual engagement plans and receive regular reports on upcoming engagements, recent engagements undertaken and any improvements to company activities that have occurred as a result of engagement activities. 

In the case of ACSI, members of our team are represented on both the ACSI Board and Member Council. We may also attend and participate in service provider-led engagements.

Where we consider that companies have failed to demonstrate adequate change, resulting in significant responsible investment risks remaining, we can use our engagement escalation framework. Escalation can include use of either one or a combination of escalation tools such as a ‘watchlist’, votes against ‘Say on Climate’ resolutions, Director re-elections, support or filing of shareholder resolutions and/or consideration of divestment where we consider that progress has been insufficient to address the risks, and where we consider this to be in the best financial interests of our members. The escalation framework is responsive to engagement/new information and may not be sequential.

Voting

This involves exercising our voting rights in both listed and unlisted markets as a key element of our active ownership approach. It is an important link in the chain of accountability between a company and its shareholders.

Read about our voting activity:
 

Advocacy

As a large superannuation fund, we seek to influence meaningful change on responsible investment issues. We use our voice to address systemic issues that are at odds with maintaining and building stable financial markets and generating strong long-term performance. This may involve seeking change to laws, regulations, standards or guidelines that we believe will deliver better financial outcomes for our members.

Read more about how we advocate for change.

the power of collaboration

We believe in the power of collective action for tackling systemic issues as collaborating enables us to amplify our voice and drive action. We work with a variety of stakeholders to undertake research on responsible investment issues, develop solutions to responsible investment challenges and to encourage companies and governments to improve their governance arrangements, risk management and disclosure on systemic risks.

* SuperRatings 10 Year Platinum Performance 2014-2024 (MySuper)