For big super funds, ESG is becoming a comparative advantage


John Streur is one of the founding fathers of the ESG movement. Now he is taking us all on a new step forward. He will be visiting Australia this month. Try to meet him.

Streur is the chief executive of Calvert Investors, the US’s most influential – arguably – ESG investor. Eaton Vance, the multi-affiliate manager, bought the company last year. Australian super funds should flock to it.

He said in a telephone interview last week, prior to his trip to Australia in mid-March, to speak at a CIE conference, that “old school” was negative screening. The main issue is trying to add value from an investor’s point of view.

“From their (the investors’) view,” he says, “we want to produce a competitive return… The old school is socially responsible screening. Now, it’s more than just signing up for the PRI (the United Nations organisation for responsible investing).”

What it’s now about is stock picking and, also, it’s getting close to “impact investing”. Calvert actually manages a not-for-profit company which, in turn, manages private socially responsible investments: Calvert Impact Capital.

Streur says this company gives Calvert “a lot of brans support”. “We have over US$ billion invested through that. It’s actually very hard to put that much money to work.”

That is the big problem with impact investing. It’s not about the returns – they are fine; they are like private equity returns. The problem is the size of the investments. “Impact” is small.

Streur says that the big themes for ESG at the moment include: population growth, climate change and company stewardship.

He is also keen on getting more investors to appreciate ESG reporting. The “G’ is not so difficult, but the ‘E’ and ‘S’ are. Calvert gives its clients better reporting than other managers in this regard.

Streur says that corporations are starting to embrace sustainable investment goals. “You know,” he says, “governments can’t really do anything unless business takes the lead… We need legislation to create a level playing field. That’s all.”

– Greg Bright