Super funds accused of gambling with transparency over ethical investment portfolios

They have urged the federal government to intervene to make it easier for people to check if super funds who claim to offer sustainable investment options are actually ‘walking the talk.’

The call follows analysis by the Alliance for Gambling Reform (AGR) which showed superannuation funds have invested billions of dollars in gambling and poker machine companies.

An AGR position paper titled Australian Superannuation Fund Investments in Gambling revealed that the ten biggest industry super funds hold at least one major gambling shareholding in their portfolio.

The top ten’s shareholding in poker machine manufacturer Aristocrat alone totals $1.67 billion.

While super funds are required by law to disclose their investments twice a year, the anti-gambling campaigners said it can be extremely difficult for consumers to make sense of the information as it is currently presented online.

The Alliance called on Canberra to:

• urgently improve superannuation fund disclosure requirements and make the information easier to find and understand.
• fund an independent agency charged with rating and certifying all superannuation products.

Alliance for Gambling Reform CEO Carol Bennett said Australians had a right to know if their money is being invested in industries such as gambling that cause harm in the community.

“There should be an onus on the funds to disclose their interests in a way that members can access and at the moment, that’s just not the case,” she said.

“They should be able to make a choice about where they want their superannuation to be held and they should be able to make that choice based on their interests and their ethical concerns.”

The AGR analysis revealed HESTA, an industry super fund with millions of members that promotes itself as a responsible investor, holds more than $351 million in gambling related stocks.

These include shares valued at $198 million in poker machine manufacturer Aristocrat Leisure and gambling-related companies the Endeavour Group ($51 million) and Sportsbet owned Flutter ($39 million).

The position paper accused some super funds of engaging in ‘greenwashing,’ citing as an example Hesta’s promotion on its website of the fund’s strong focus on responsible investment:

“Super with impact is the positive outcome we create by supporting our members to face the future with confidence, being a gutsy advocate for a fair and healthy community and delivering investment excellence with impact.”

Ms Bennett said the analysis focused on HESTA as an example because its members are drawn from occupations such as community workers, nurses, and the aged care sector – individuals likely to be dismayed their money is being invested in an industry that causes harm.

“They represent people who work with those with gambling harm and are people who would most want to know that their hard-earned mandatory superannuation was not going into ethical investments,” she said.

“Because it matters to them. They work in areas that make a difference and you’d expect those people want to make a difference with their investments as well.”

The position paper cites research which indicates Australians are becoming more attuned to ethical investing and care about how their super funds are invested.

A survey by the Responsible Investment Association Australasia (RIAA) found:

• Four out of five Australians expect their bank account and super to be invested responsibly and ethically.
• Three quarters of Australians would consider moving to another provider if their current fund was revealed to be investing in companies engaged in activities inconsistent with their own values.
• Superannuation funds top the list of financial products that consumers most want to see invested responsibly.

Ms Bennett dismissed the claim by some super funds that by investing in gambling companies they can bring influence to bear to reduce gambling harm.

“We have not seen any evidence to support this claim,” she said.

“The gambling industry is a predatory industry that preys on the vulnerable and rips out $25 billion in losses from communities across Australia.

“There is no place for superannuation funds to be investing our money in such equities – especially those funds that spruik their ethical credentials so prominently.”

A HESTA spokesperson declined to comment.