CSC named as global leader in responsible asset allocation

Commonwealth Superannuation Corporation (CSC) has been included in a new list of the world's top 25 most responsible institutional investors.

The 25 Most Responsible Asset Allocators list, compiled and announced by Bretton Woods II, was drawn from 298 sovereign wealth and government pension funds from around the world. CSC is the only Australian fund to be included in the list.

The Bretton Woods II project is the initiative of a non-partisan think-tank, the New America foundation. Their Responsible Asset Allocator project is aimed at helping large institutional funds around the world reduce risks, optimize returns and identify opportunities for further growth through strategic investments. The 25 institutions named in the list represent global best practice in this regard.

These seven sovereign wealth funds and 18 government pension funds have not only achieved appropriate commercial returns for their stakeholders but have also taken significant, proactive steps to mitigate potentially-mispriced social, environmental and governance risks that could negatively impact their portfolios over the long-term.

CSC's Chief Investment Officer, Alison Tarditi said making the list is recognition of CSC's long-term commitment to global best practice in investment governance, asset allocation and investment-risk management.

The distinction between traditional financial and non-traditional risks is not their relevance, but rather the market's ability to identify, analyse and price them. The quality of an entity's shorter-term operational execution is relatively transparent because financial metrics are regulated to strict public-disclosure standards, Ms Tarditi said.

The probability that an entity maintains that execution quality over the long-term is much less transparent. It requires strategic thinking about the broader social and environmental context of operation, including how global trends in factors of production and societal attitude might curtail current practices. Real investment value can be created and, importantly, sustained when the less-tangibly-assessed organisational capability to take sound strategic decisions is high.

The Bretton Woods II project is aimed at lengthening the horizon and the quality of decision-making across the entire investment system, from asset allocators through to their investee companies. More information about the 25 Most Responsible Asset Allocators list can be found here: https://www.newamerica.org/in-depth/bwii-responsible-asset-allocator/