Sunsuper trustee director Michael Traill believes the industry has done itself a massive disservice by using the term "impact investing."
Speaking at the Australian Institute of Superannuation Trustees Super Investment Conference, Traill suggested that the term implies a disconnect between environmental awareness and the actual business of delivering investment performance - when, in fact, the two are inextricably linked.
"Fund managers have yet to come to grips with the fact that green assets are durable assets. If you look at private equity, it's rip it and flog it off in three years. But my duty of care as a trustee is to find investments that have a shelf life of two-plus decades," he explained.
Addressing the idea that engaging in impact investing risks violating a super fund's fiduciary duty to its members, Traill argued that this was a myopic view that mirrors his experiences with alternative investments in the 1980s.
"I'm showing my age here, but back then you had funds saying that alternatives are risky assets and they weren't sure if they could justify it. A decade later, those same people were losing their jobs if they didn't have that allocation," he said.
ESG, he added, is no different in this regard, and the best way to outperform is to capture an opportunity before everyone else: "If you have a belief that a market is prospective, you have to get in early."
Traill also noted that green allocations assist funds with the ongoing challenge of member engagement, saying: "My kids are in their 20s. You're kidding yourself if you think they're engaged with their superannuation."
"They're not looking at the actuarial calculators. They don't care. But if you talk to them about a green option, then they're interested. The emerging generation is going to demand it," he said.
Also speaking at the session were Global Impact Initiative chief executive Giles Gunesekera and First State Super head of responsible investment Liza McDonald.