Responsible Investment and Stewardship

Our strategy is to lead change

As long-term investors, we know that the investment decisions we make today impact communities in the future.

We review our RI strategy every three years to build on our approach to stewardship, and to ensure we are proactively thinking about how to address emerging issues in our investment processes. We revisited our 2019 strategy throughout 2020 to better position our business to manage investment issues emerging from the pandemic, and to consider the impact that the companies we invest in have on vulnerable communities and ecosystems.

We have been monitoring issues across our investment universe

We have identified four focus areas that are important to our clients and we expect them to grow in importance as company disclosure and public discourse on these topics are driven by regulatory change and consumer demand. They are: climate change, modern slavery, diversity and biodiversity. In order to address these systemic issues, we have established and joined working groups with other institutional investors, as well as developed frameworks for research, analysis and company engagement.

We believe that when it comes to responsible investment, active management is much more than a simple box-ticking exercise. Every decision about where we allocate capital is a vote on a company’s fitness to be in business.

Keeping ahead of regulatory change, to complement our rigorous programme of individual company engagement we band together with like-minded institutions to set higher expectations for companies seeking the support of our investors’ capital.

Recognising that no company is perfect, we encourage management to examine their supply chains for modern slavery, consider diversity in their workplace, and scrutinise the impact of its operations on communities and ecosystems. We invest in companies willing to discuss and improve their practices as they are on a journey to becoming a better global citizen, just as we are.

This approach is in line with community expectations. A survey by Responsible Investment Association Australasia found that 9 in 10 Australians believe it’s important that their financial institution invests responsibly and ethically 1.

We are seeing this same trend in client conversations occurring across the markets we operate in. With a greater emphasis on the social aspect of ESG comes a greater need for transparency from the investment management industry on how these issues are managed.

A survey by Responsible Investment Association Australasia found that 9 in 10 Australians believe it’s important that their financial institution invests responsibly and ethically. (1)

Benchmarking our progress

Our approach to RI and stewardship is designed to deliver the best possible long-term outcomes for our clients.

As industry practice continues to evolve, we continue to look for standards and industry codes to benchmark ourselves against. These help us both to identify areas where we can make improvements and to guide the development of our reporting and disclosure mechanisms, in turn enabling us to increase transparency.

Two important independent standards against which we benchmark ourselves are the Principles for Responsible Investment (PRI) Assessment ratings and the Responsible Investment Association of Australasia (RIAA) Benchmark Report.

Our PRI Assessment results provide a useful independent benchmark of our progress against industry peers. In 2020 we scored an ‘A+’ rating in 7 of the 8 categories against which we are assessed and an ‘A’ in the 8th. For additional information, you can read our PRI Assessment Report or access the PRI Transparency Report on the UN PRI’s website.

Each year, RIAA assesses the RI practices of asset managers in its annual benchmark report. Investors are rated against four key drivers for RI: walking-the-talk, managing risk, building better beta and allocating capital towards solutions. In 2020, we were one of only 44 managers (from 165 assessed) classified as a leader. This assessment was on the basis of RIAA’s expanded scorecard to determine leading practice, which is a reflection of increased commitments to RI from investment managers.

 

In 2020 we scored an ‘A+’ rating in 7 of the 8 categories against which we are assessed and ‘A’ in the 8th1

1 Responsible Investment Association of Australasia, From Values to Riches 2020

In 2020 we scored an ‘A+’ rating in 7 of the 8 categories against which we are assessed and ‘A’ in the 8th. *

1.Responsible Investment Association of Australasia, From Values to Riches 2020, www.responsibleinvestment.org/wp-content/uploads/2020/03/From-Values-to-Riches-2020-full-report.pdf

Responsible investment reports

Read our latest annual Responsible Investment Report

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