Mine Super, the $11 billion industry fund for the coal mining industry, has clarified its position on a number of ESG issues.
Vasyl Nair is the chief risk officer for Mine Super, he recently spoke at a panel on ESG issues at the annual Investment Performance Measurement, Attribution and Risk Management (iPARM) conference in Sydney.
Nair sat with key industry figures who have built reputations on ethical investing to defend Mine Super's position.
Ethinvest general manager and board member for the Ethical Advisers' Co-op Fiona Thomas was also on the panel with Russell Investments portfolio manager James Harwood and Perennial Value Management Sustainable Future Trust portfolio manager Damian Cottier.
Nair began by acknowledging that it is not always easy to be the representative for the coal mining industry on panels with those who specialise in ethical and ESG investing.
"Our fund leadership is not comprised of flat-earthers or climate deniers," Nair said.
"ESG considerations are always slightly more complicated when your members predominantly work in the resources sector."
However, he said Mine Super embraces the view of the wider industry that there is little or no conflict between investing sustainably and long term returns.
"We also acknowledge that companies with poor ESG credentials could represent elevated financial risk," Nair said.
However, Mine Super has the difficult task of delivering on its trustee obligations to members who are overwhelmingly employed in the black coal mining sector.
Research conducted by the fund has shown there is an expectation from members that it support the sector where possible.
"While we do actively exclude tobacco and cluster munitions from our investments, we don't exclude resources," Nair said.
While excluding fossil fuels may not be practical for Mine Super, other ESG issues raised by the crowd attending iPARM brought unanimous responses from the panel.
One audience member asked how the panel was thinking about governance following the Royal Commission.
The question prompted the panel to discuss AUSTRAC's recent claim that Westpac breached anti-money laundering laws 23 million times.
Thomas explained it was particularly disappointing for her and her clients, as Westpac had come through the Royal Commission looking better than some of the other banks.
Several of the other big banks had failed to meet Ethinvest's governance screens following the Royal Commission.