Superannuation Giants: A model for global financial strength
This article, published by QIC, provides a short background on Australia’s superannuation sector, with the collaborative work between The Action Exchange and QIC including knowledge mobilisation to frame these insights for a global audience.
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Objective
Identify the next big trends in corporate governance to inform an asset owner’s ESG strategy
Lauded by politicians and industry leaders as 'the envy of the developed world', Australia's compulsory superannuation industry has quietly become one of the world's largest institutional investors.
Key takeaways:
Australia’s compulsory superannuation industry, praised as the ‘envy of the developed world’, has transformed savings and investment patterns, significantly reducing the financial burden on the government as the population ages.
The superannuation market is mature, managing the fourth largest pension pool globally, and expected to take second place by 2035.
The superannuation industry has strengthened and stabilised the Australian investment landscape, fostering a sophisticated financial sector with deep expertise, opportunities and talent.
With significant capital pools, superannuation funds are looking to international markets, opening up bigger opportunities for foreign capital to invest in Australia.
Australia’s stable government and generally centrist politics, robust legal system, and a triple-A credit rating that reflects sound fiscal management, means that the country is a safe haven for offshore capital seeking consistent, secure returns.
The Action Exchange is proud to support QIC’s exploring issues of interest to investors across their communications and commentary.
Approach
Combine stakeholder engagement with regulatory and competitor analysis
In collaboration with a governance expert, we benchmarked corporate governance policies, mandates and disclosure patterns to identify a market baseline. We interviewed experts and practitioners to uncover off-the-record governance issues on the horizon. We conducted a regulatory sweep to identify the ESG trends on regulators’ watch list. As well as examining corporate governance red flags drawing the attention of AI-based investor platforms.
Outcome
Demystifying an area of growing concern among sustainable investors
Our analysis combining public and private sector corporate governance and ESG insights brought clarity to the asset manager’s governance priorities. By shedding light on which governance issues are gaining traction with investors and other stakeholders, our client can strengthen their governance performance to position itself as a market leader and improve their ESG communications.
