Super fund boss Debby Blakey from HESTA says it’s time Baby Boomers pulled their weight

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As an activist fund manager, she has pushed the boundaries into campaigning for increased diversity, equality and directly engaging companies to ensure their environmental actions match their rhetoric.

Environmental and ethical investing in Australia has evolved over 20 years from a marginal to mainstream investment strategy accounting for nearly $1.3 trillion, or 40 per cent, of the nation’s managed funds.

COVID-19, the bushfires that ravaged south-eastern Australia, record-breaking droughts and erratic weather have helped recruit a new generation of investors with new priorities, putting the heat on many businesses needing their capital for growth.

Lupino is well-patronised for a rainy Tuesday afternoon in a CBD still recovering from the pandemic, and the unseasonal spring weather and empty streetscape are a motif for her warnings about the profound impact of the pandemic and climate change – and the equally profound response needed for its solution.

“I think every threat is also an opportunity. The biggest opportunity, but also possibly the biggest risk and challenge, is actually how we invest globally in the shifting world to constantly deliver great returns,” she says.

A passion for social justice

Blakey has experienced big changes throughout her life, having grown up in turbulent South Africa, before emigrating to Melbourne with her husband, Lawry, and her then young children, and rising through the ranks of the super industry.

She grew up in Durban, a seaside city on the east coast of South Africa, and spent her childhood and teenage years in a happy family, but in a nation wracked by violence and change.

Her father, now 89, was a shirt manufacturer and her mother was involved with the local community and arts scene.

“I had an amazing childhood. Very dynamic, very busy, very active, very outdoor, but also a very special relationship with both my parents,” says the second of three sisters, one of whom has joined her in Melbourne.

External influences bookending her childhood and adolescence include the fallout from the Sharpville massacre, apartheid, the rise of Nelson Mandela and the hopes of the Rainbow Nation.

“My father was very passionate about social justice, so they were incredibly formative years for me, to be brought up in that situation with his views on pro-democracy and pro-social justice,” she says.

She won an IBM scholarship to the University of Natal, where she completed a bachelor of science and met her soon-to-be husband.

Soon after graduating they spent a year in the United States studying psychology and biblical literature.

“I have a very deep conviction and personal faith, but I don’t like to think of myself as religious in the sense of being a member of a denomination,” she says.

Talk of religion prompts a discussion about switching the table water for wine and ordering a main course.

Blakey chooses risotto with asparagus, pancetta and taleggio, while I opt for the barramundi fillet, with cannellini beans, tomato and zucchini, accompanied by a glass of robust house red – a modest selection from a very healthy wine list.

The views from our ground floor corner table window could either inspire or depress someone who is committed to leveraging the combined capacity of men and women working together.

Just outside are the hulking brick walls that surround the rear of the Melbourne Club, the 183-year-old male-only institution, while nearby is its sister establishment, the women-only Lyceum Club.

Blakey’s passionate belief in the enormous potential of men and women to complement each other’s talents is a hallmark of HESTA’s investment ethos and management structure, with both sexes being evenly represented in senior management and board roles.

“Our executive team is seven plus me – four men and four women. We are in an exceptional place with a female chief executive, female chief financial officer and female chief investment officer.”

The chair is Nicola Roxon, the first female federal attorney-federal and former minister of health and ageing.

Blakey cites research showing the top 25 per cent of top-quartile companies that have gender diversity at executive level outperform by more than 20 per cent.

“We invest members’ money, and we want to do that in a way that gives them the best financial future,” she says.

“To do that really has two lenses. The first is that relentless focus on returns and we never walk away from that. But part of that is managing the investments very holistically and being very thoughtful about the risks and the opportunities. And these things matter. These environmental, social governance considerations actually matter.”

‘I work for fun’

Blakey’s working day starts around 5.30am and often extends late into the night on overseas calls to fund managers, analysts and her network of colleagues associated with the ICGN.

“What do I do for fun? I work for fun,” says Blakey, who recently became a grandmother for the second time.

On her arrival in Melbourne from South Africa, Blakey spent her first year focusing on settling in with her children while continuing her studies, but soon got itchy feet.

The first job she applied for – and got – was with a small industry fund called Independent Schools Super Trust, which was merged later with NGS Super. She worked there for about seven years in a range of operational roles before joining HESTA, which covers about 900,000 workers in health and community services, 80 per cent of whom are women.

She joined to lead their member engagement and advice operations in 2008 and within three years was the deputy chief executive covering risk management, technology and business development.

“These things matter. These environmental, social governance considerations actually matter”: Blakey takes a holistic approach to her role.  Tash Sorensen

“HESTA was phenomenal for me. I always feel when I got to HESTA, I was home. I think at that point, my actual aspirations for my career really did go up. And it was because of that sense of opportunity, sense of belief in me,” she says.

Before taking on the chief executive role in 2015 she sought coaching to understand why she wanted the job.

“I didn’t want to apply for the CEO role because it was just the next step or a good idea,” she says. “I felt having a coach could help in testing me to understand why I wanted the job.

“And she was jolly tough on me. Sometimes when I was articulating ‘why’, I would drop into the ‘what’. She was very disciplined with me and said, ‘No, no, no. Let’s not talk about the ‘what’ or the ‘how’. Let’s just be very clear about the ‘why’ first. Start with ‘why’.”

Since taking over, membership has grown by 100,000 and funds under management have more than doubled.

She has also introduced programs to boost member engagement with their super investing and an in-house fund management capacity for Australian equities and bonds, while keeping an eye peeled for possible mergers.

HESTA’s flagship managed fund, which contains about 80 per cent of members’ assets, has been a top-quartile performer over one, three, five and seven years.

The sustainable fund, which targets companies with proven environmental, social and governance credentials, last year returned about 23 per cent.

Blakey has also been active in promoting high-profile governance issues, such as negotiating with Rio Tinto on addressing management issues that led to heritage destruction at Juukan Gorge

“I think it was a failure of governance by Rio right from the top,” she says. “ I think companies need to realise the community can have a very different view on the right thing to do.”

Blakey has been active in promoting high-profile governance issues.  

A shareholder revolt led to a management shakeout and departure of several senior executives, including chief executive Jean-Sebastian Jacques, and new disclosure and governance oversight measures aimed at rebuilding trust with Traditional Owners.

Other major campaigns include the need for companies to increase the number of women in senior management.

Industry funds use the ACSI, which she is president of, to research and guide them on touchy issues such as executive pay, climate change, other social issues and corporate scandals.

Blakey denies she is blurring the line between corporate and political activism and pushing for systemic change.

“It’s about members entrusting their financial future to us. That’s what it’s about. We have an enormous responsibility to engage with the companies we invest in to understand how they’re managing key risks,” she says.

The super sector is highly competitive and unhappy members can “vote with their feet”, she says, adding that its retention rates are industry-leading.

Challenges from change are expected to accelerate as the economy is reshaped by new ways of work resulting from COVID-19, an awareness of the “incredible role of health” and the “biggest opportunity”, which is building economic recovery around tackling climate change, she says.

“Australia has so much to gain from decarbonisation, but the governments need to take a leadership role in creating investment guidelines that provide long-term certainty about investing in a green-led recovery,” she says.

“Then it’s up to us as an organisation to control what we can control, making sure we are in the strongest position we can to take advantage of the future opportunities. That’s what it’s about.”

To make the point clearer she declines a coffee – got to get back to work and finishes the lunch with a couple of lines from William Ernest Henley’s poem Invictus, which was a favourite of Nelson Mandela.

“I am the master of my fate, I am the captain of my soul,” she quotes.

“To me, it means living up to the opportunity we have to make an impact. We have to understand our accountability.”

Debby Blakey will be speaking at the Financial Review Super & Wealth Summit on Monday, November 22.


The bill

Lupino, 41 Little Collins St, Melbourne

Risotto with asparagus, pancetta and taleggio $31

Barramundi fillet, with cannellini beans, tomato and zucchini $38

Avignon red wine (glass) $14.60

Dry ginger ale $5

Total: $88.60

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