This is ACCR's fourth annual report on the disclosure and voting practices of Australia's largest superannuation funds.  It focuses on 518 environmental, social and governance ('ESG') proposals filed in 2021. It also considers trends between 2017-2021, when ACCR first began to collect this data.

The report highlights the disclosure and voting practices of the 30 largest super funds in Australia. It emphasises the importance of good disclosure as a measure of accountability to members, consistent voting as a measure of proper governance, and the consonance between how a fund positions itself in theory (for example, as an investor which is sensitive to issues such as sustainability) and how it votes in practice.

Key findings

  • Disclosure. Of the 30 largest Australian super funds, 20 published complete voting records in 2021. Of these 20 funds, eight have consistently published complete voting records since 2017, the year from which ACCR began tracking disclosures: Active Super, AustralianSuper, Cbus, HESTA, HOSTPlus, Mercer, Mine Super and Vision Super.

TABLE 14. FUNDS’ DISCLOSURE OF PROXY VOTING RECORDS IN 2021


Level of disclosure
Funds #
Funds %
Total AUM $B
% APRA-regulated AUM

Complete
20
66.7%
1,420.0
59.8%

Limited - AU only
4
13.3%
277.5
11.7%

Limited - Other
2
6.7%
59.3
2.5%

Summary only
1
3.3%
244.8
10.3%

No disclosure
3
10.0%
59.4
2.5%

Total
30
100%

  • Trends in Australian proxy voting. The number of Australian shareholder proposals increased from 31 in 2020 to 38 in 2021 and the percentage of supportive votes also increased from 14.7% to 23.4%, which is consistent with the broader trends since the survey began in 2017. Of note was the increase in supportive votes for Environment-Climate proposals which increased substantially from 24.7% in 2020 to 46.2% in 2021.

TABLE 6. NUMBER OF SHAREHOLDER PROPOSALS BY COUNTRY


Country
2017
2018
2019
2020
2021
Total Companies
Total Proposals

Australia
11
18
30
31
38
41
128

Canada
16
10
38
32
26
42
122

United Kingdom
2
1
3
3
7
10
16

Norway
2
2
3
6
11
3
24

United States
210
176
164
199
436
509
1,185

Total
241
207
238
271
518
605
1,475

TABLE 7. AVERAGE VOTE OF SHAREHOLDER PROPOSALS BY COUNTRY


Country
2017
2018
2019
2020
2021

Australia
6.7%
12.7%
10.2%
14.7%
23.3%

Canada
11.7%
26.0%
11.5%
12.6%
15.6%

United Kingdom
7.1%
5.5%
45.7%
13.8%
28.7%

Norway
0.1%
0.3%
0.7%
0.6%
7.6%

United States
21.6%
25.5%
26.7%
25.8%
34.8%

All Countries
19.9%
24.0%
22.1%
22.2%
32.2%

TABLE 12. AVERAGE VOTE OF AUSTRALIAN SHAREHOLDER PROPOSALS BY THEME


Category
2017
2018
2019
2020
2021

Environment-Climate
6.9%
19.0%
13.4%
24.7%
46.2%

Governance-Other
6.2%
6.9%
5.3%
6.7%
7.4%

Social
6.2%
9.7%
14.0%
11.8%
11.1%

All Themes (AU)
6.7%
12.7%
10.2%
14.7%
21.6%
  • Super funds' support for proposals and changes over time. There continues to be a wide disparity between the supportive voting practices of Australia’s largest super funds, with the top quartile of funds supporting on average 68% of proposals in 2021, relative to the bottom quartile of funds which supported on average only 14% of proposals. In 2021, nine funds' support for shareholder proposals was at least 20% higher than their historic average from 2017-2020. ACCR does not suggest that voting in favour of every shareholder proposal necessarily represents sensible or progressive voting behaviour, but rather every proposal should be considered on its merits.

Recommendations

  • All funds should disclose their entire proxy voting record - meaning, for every vote cast across all jurisdictions, to allow members to monitor their stewardship performance and to help assess how a fund positions itself in theory and how it votes in practice.
  • Funds that delegate voting to asset managers and proxy voting firms should disclose the proxy voting record of those managers/firms.  Funds should retain the right to vote in a different way and exercise when external advice is inconsistent with their own voting policies.
  • Voting disclosures should be easily accessible to fund members. Best practice disclosure is made through an online portal to enable timely disclosure, and promptly after the vote is cast.
  • Funds which self-describe as "active owners" should clearly communicate their expectations for companies or sectors, as well as the strategies they will deploy if these expectations are not met. Central to this will be the timely release of proxy voting records, voting bulletins and/or rationales explaining voting decisions so that members can better understand how funds are escalating. With greenwashing risks escalating for asset owners, there are growing expectations that funds will demonstrate to their members how they are engaging and escalating with heavy emitting companies.
  • Funds should publish their responsible investment and proxy voting policies and ensure their voting is consistent with those policies.
  • As part of their voting records, funds should publish a brief rationale about their reasons for abstaining from a vote or voting against management.
  • Funds should consider filing, co-filing or publicly supporting shareholder proposals when other forms of engagement are unsuccessful in delivering change.

Download this summary or our full analysis.

Dedication

ACCR would once again like to dedicate this report to the life and memory of climate activist Leif Justham. Leif was killed in 2021, while on a cycle across the Nullarbor. Leif undertook this journey to raise awareness of the relationship between climate change and investment, and to promote urgent climate action.

We want to thank Leif's family for their ongoing support for ACCR, and we encourage readers of this report to read about Leif's legacy at: http://www.leifjustham.com/

— the ACCR team

Leif Rides On… A message from Leif's family

Leif grew up in the Adelaide Hills and always loved being outdoors. He cared deeply about climate change and spent time learning about ways we can each reduce our impact, particularly by changing super funds. Leif actively encouraged others, convincing family, friends, and colleagues to follow his lead, but wanted to do more.

In March 2021 Leif rode out of Adelaide on his beloved push bike. His epic goal: to ride solo around this vast continent and along the way raise awareness about divestment and our collective power for change. Leif spoke with anyone and everyone he met, starting conversations about the power of choosing super funds and banks that don’t invest in fossil fuels, and inspiring them to make the change. In two weeks, Leif rode almost 2000 km and was loving it. However, his journey was tragically cut short on the morning of April 6 when he was killed, struck from behind by a truck on the ‘90 mile straight’ of the Nullarbor plain.

At only 21 Leif inspired many and left a huge legacy. As a family and community, we have established a small foundation called Ride On Leif to continue to share his story and honour that legacy. In the 18 months since his death, Leif has been acknowledged by politicians from all sides in State and Federal Parliament. Awards have been created in his honour, articles have been published and a short film is being made about his story and legacy. Artists and designers have dedicated work and exhibitions to him, and Leif’s own super fund has planted a small forest as tribute. Closer to home, hundreds of people have helped in regenerative planting projects across several locations – all dedicated to Leif.

The dedication of this report is yet another example. Leif believed we each have the power to change the world for the better and we thank ACCR for dedicating this year’s report to him and commend its work for our shared environment and planet.

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  • 20th December 2022

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