M. Scott Donald

Overcoming the Challenges of Impact Investing: Insights from Leading Investors

Abstract Interest and activity around impact investment have increased significantly in recent years as businesses, governments and communities seek new solutions to enable an inclusive and sustainable society in the face of social and environmental challenges. Philanthropists, charitable foundations and institutional investors have been among the early adopters in implementing impact investment strategies and developing the field. Despite the initial enthusiasm for impact investment, many investors raise concerns as they begin to explore the practicalities of impact investing. This paper responds to these concerns by providing empirical insights on how leading institutional investors and charitable foundations have begun to develop impact investment strategies and overcome various trepidations. The findings reveal four main themes: a focus on financial-first investments; the importance of using established due-diligence processes; the opportunity to align mission and values; and, the value of networks and collaboration.

Design of MySuper default funds: influences and outcomes

We interview Australian fund executives about how their organisations responded to MySuper, a regulatory framework for default retirement savings funds that providers were required to have in place by the beginning of 2014. We provide an account of the influences on MySuper product design. Our analysis provides insight into how fund providers balanced their perceptions of the needs of default fund members against business considerations. Differences in member bases and organisational circumstances across funds are found to lead to considerable variation in default fund design.

The Implications of Complexity for Systemic Risk in the Superannuation System

The funds, entities and regulators involved in the Australian superannuation industry together comprise a system that is complex and dynamic. The differentiation between roles and the distribution of responsibility offers the system as a whole resilience against local failure. However the interconnections that bind and constitute the system have the potential to create and transmit risks within the system. This undermines the systems resilience to exogenous shocks. This paper uses a new data set on 200 Australian superannuation funds to map and analyse those links as a first step towards assessing the nature and severity of the threat that the links pose to systemic resilience. It concludes by outlining some of the regulatory issues that arise.

The Australian superannuation system post Stronger Super: views from fund executives

Over the past five years, the Australian superannuation system has been subject to a programme of policy and regulatory change of considerable scope and ambition: the Stronger Super initiatives. This article presents the findings of qualitative research undertaken with the fund executives on whom much of the burden of responding to the changes has fallen. It finds misgivings around the new reporting regime, the systems overwhelming focus on the accumulation phase and the provision of choice to members, as well as widespread fatigue from continued regulatory change. It also finds a predictable diversity of views on funds’ alignment with members’ needs and the desirability of scale.

Australia's Financial System Inquiry: some preliminary observations

The Australian Governments Financial System Inquiry is due to release an Interim Report in July. This short article briefly reviews the 270 public submissions it has received so far and offers some observations on their content and the process to date.