Our approach to responsible investment is based on integrating both financial and non-financial criteria into the way we research, select and manage investments.

Traditional investment approaches focus mainly on financial criteria such as balance sheet strength and future earnings forecasts. We take a wider perspective which also takes environmental, social and governance (ESG) factors into account. 

These may include:

  • Environmental: factors relating to pollution, hazardous waste, energy or resource usage, climate change, green technologies, or water management.
  • Social: factors relating to human rights, ethical or indigenous relationships, health and safety, diversity, social programs, or charitable endeavours.
  • Governance: factors such as bribery or corruption, transparency, board structure, executive compensation, or voting procedures.
  • Other potential non-financial criteria in our assessment include management strength and industry composition.

As these factors are some of the drivers of long-term investment risks and returns, we believe our approach is in the best long-term interests of both our investors and wider society.

Our responsible investment principles

We are a signatory to the United Nations supported Principles for Responsible Investment. These six principles provide guidelines for institutions on incorporating environmental, social and governance factors into their investment processes. As a signatory, we commit to:

  1. Incorporating ESG issues into investment analysis and decision making processes;
  2. Being active owners and incorporate ESG issues into our ownership policies and practices;
  3. Seeking appropriate disclosure on ESG issues by the entities in which we invest;
  4. Promoting acceptance and implementation of the principles within the investment industry;
  5. Working together with other signatories to enhance our effectiveness in implementing the principles; and
  6. Reporting on our activities and progress towards implementing the principles.

What does our responsible investment philosophy apply to?

Our philosophy applies to all of our managed investment schemes, discretionary investment management services, wholesale mandates, superannuation schemes and wholesale schemes that we manage. This includes investments that are managed by our external fund managers who we have appointed to manage the assets of some of our underlying funds.

It’s important to note that if we buy units in a fund that isn't managed by us, our investment might be exposed to companies we would ordinarily exclude. This possibility is factored into our decision to buy any such units.

Reviewing investments

We continually review our investments and prospective investments against our financial and ESG criteria. Companies or industries that have any ESG issues are subject to further review. These reviews cover both existing and prospective investments and consider some or all of the following:

  1. global best practice
  2. our view on the expectations of our investors or clients
  3. the impact of an exclusion on returns
  4. the severity of any ESG related breaches or actions, or
  5. the likely success of an alternative course of action (for example, engagement).

Depending on the results of our review we might continue to hold, review on a periodic basis, divest, or exclude the company or industry as an investment.

What we don’t invest in

We currently exclude investments in companies that are involved in:

  • manufacturing controversial weapons, including cluster munitions and anti-personnel mines
  • manufacturing or testing nuclear explosive devices, and
  • manufacturing tobacco products.

We have also excluded some companies, across a range of industries, that have breached global norms or standards to a severe degree.

View the list of excluded companies.