The Responsible Investment Super Study 2019 flagged an interesting trend underway, with the number of jobs rolling into this part of the investment market doubling since this time last year. The numbers are small in total but the significance is far greater because they signify that these vast quantities of superannuation dollars are increasingly subject to ethical, environmental and socially responsible screenings.
According to the study that was conducted by the Responsible Investment Association of Australia, (see our report here) around 29 funds, or about half the number surveyed, employed a full time equivalent staff member focused on responsible investment. Retail funds were even more likely to hire an FTE in the RI role: with 62 per cent saying they had done so.
Nicolette Boele, executive manager with RIAA, says it would be no surprise if the numbers kept growing. “When I meet people from the sector they say they are really, really busy and working long hours,” Boele says.
The compliance side alone is a huge task and then there are big areas around risk, as well as opportunities. Questions such as: “What does this mean for opportunities around renewable energy, and how do we get our heads around impact investment?”
There might also be the opportunities around affordable housing, around hospitals or schools – the things that are a direct benefit to members that also need considering.
“It’s a whole step up around what it means for investing for an asset owner or an asset manager,” Boele says.
Previously there might have been an external consultant to help with these issues but now it’s more likely to be an inhouse person with support staff to boot.
Retail funds self declare as having the biggest head count, she says, and that’s because of the sheer number of funds, distribution channels and platforms organisations such as Mercer or Perpetual might manage.
The qualifications needed for those kinds of jobs varies, but if it’s a super fund like Christian Super or Australian Ethical she suspects the cultural fit is likely to be paramount.
Otherwise, at entry level, it’s all around data and reporting. “You need someone who has a good handle on data and is not afraid of a pivot table.”
And the senior roles increasingly involve a position on the investment team. And the job typically involves growing obligations to respond to “civil society’s concerns around exposure to tobacco or nukes and the constant surveys around carbon disclosure projects or Dow Jones Sustainability Index or the Global Real Estate Sustainability Benchmarks”.
“Often the SRI person sits on the investment committee to answer the difficult question to challenge the inclusion or exclusion of a particular holding.” Or whatever the promises to members were.
The language around risk is pushing for all-round better quality of reporting, Boele says.
Most noticeable though is the way that product disclosure statements around risk will include items such as foreign currency risk and climate risk.
“The finance sector is not spooked by these things even though climate risk is hard because it’s systemic.”