Does “sustainable” investing compromise the obligations owed by superannuation trustees?

By N.A.J. Taylor on 1st January 2008 — 1 min read

Trustees of Australian superannuation funds are coming under increasing public pressure to take sustainability factors into account in their investment strategies. Despite the rhetoric, trustees have been loath to incorporate what are sometimes deemed “non-financial” criteria into their decision processes. This is entirely understandable. It stems from the conventional wisdom that a range of practical and legal impediments stands in their way. This article reviews that conventional wisdom and finds that it is often superficial and ignores recent developments in the way sustainable investing is framed. This implies that the way is open for superannuation trustees to embrace a more positive approach to sustainable investing; one that is consistent with the tapestry of obligations they owe under general law as well as the legislative backdrop.

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M. Scott Donald and N.A.J. Taylor, ‘Does “sustainable” investing compromise the fiduciary duties owed by superannuation trustees?’,Australian Business Law Review,Vol.36 Is.1, 2008, pp.47-61.[An earlier expanded monograph—of which I was the principal author—won the 2007 Australasian Sustainability Award, sponsored by UniSuper.] [PDF]