Responsible ownership

Stewardship: Engagement and Voting

Stewardship means actively monitoring and engaging with the companies we invest in and the fund managers we partner with.

We aim to positively influence the policies, behaviours and practices of the companies we invest in, in areas such as:

• climate change
• worker safety
• diversity
• company conduct and culture, and
• cultural heritage management.

As a large investor, we use our voting rights to support actions we believe will be beneficial and enhance value for our members.

Aware Super is a signatory to the Australian Asset Owner Stewardship Code. As a signatory, we have developed a Stewardship Statement which shows how we apply these principles.

For information on our Stewardship activity read our

• Responsible Investment Report.
• Voting reports

Engagement through our partners:

• Aware Super / Federated Hermes 2024 Annual Review report
• Aware Super / Federated Hermes 2023 Annual Review report
• Aware Super / Federated Hermes 2022 Annual Review report
• Aware Super / Federated Hermes 2021 Annual Review report
• Read about our engagement through ACSI in ACSI's Annual Reports

Investment restrictions and exclusions

Our preference is to use engagement and proxy voting to positively influence the behaviour and ESG practices of the companies we invest in.

However, in some circumstances we do exclude or restrict a particular sector or company from our investment portfolios.

As a result, we have implemented the below fund-wide restrictions and exclusions¹ which are applied subject to the notes outlined below: 

• Tobacco
  • In 2012 we were one of the first super funds to divest from tobacco, setting a precedent in the industry.
  • We have no direct investments in tobacco manufacturers and/or producers which derive 5% or more of their revenue from the manufacture and/or production of tobacco products.
• Thermal coal
  • We have no direct investments in companies generating 10% or more of their revenues directly from mining thermal or energy coal.²
• Controversial weapons³
  • We have no direct investments in companies verifiably involved⁴ in the manufacture and/or production of anti-personnel mines, biological weapons, chemical weapons, cluster munitions, depleted uranium, incendiary weapons and white phosphorous weapons (whole systems or key components⁵).
  • We have no direct investments in companies verifiably involved⁴ in, and deriving 5% or more revenue from, the manufacture and/or production of nuclear weapons (whole systems or key components⁵).
     

It’s important to keep in mind that: 
 

• Our investment options may have a small indirect exposure to companies involved in these industries because the fund-wide restrictions and exclusions don’t apply to indirect exposures. This includes derivatives, exchange-traded products such as ETFs, securitised assets (financial products that give the holder exposure to a pool of loans, bonds or other debt products) and investment vehicles governed by an uncontrolled entity including, but not limited to, unit trusts and fund of funds via pooled vehicles. 
• Companies that provide goods or services to companies generating revenue from tobacco products, thermal coal or controversial weapons, or that are involved in the distribution or deployment of these items, are not excluded. 
• We rely on data provided by ISS STOXX to apply the fund-wide restrictions and exclusions for directly held liquid investments such as shares and bonds. For more information on the methodology that ISS STOXX applies in generating their data, please refer to their website. The documents that are most relevant include the ‘Energy & Extractives’, ‘Controversial Weapons Research’ and ‘Sector-Based Screening’ methodology and research process papers.⁶ For unlisted direct investments, an internal assessment is made.
• The implementation of these restrictions and exclusions may be affected by the accessibility and accuracy of data, or an error by an external service provider. This may result in inadvertent holdings, typically over the short term, in investments we are seeking to exclude. In the event that there is an inadvertent holding of an investment we are seeking to exclude, we will endeavour to divest as soon as reasonably practicable. 
• We do not automatically exclude companies’ subsidiaries, joint ventures or bond issuers; each is assessed on its own verifiable involvement in the relevant activity. For example, if a company is excluded due to its involvement in controversial weapons, its subsidiary will not be excluded unless it is assessed to be verifiably involved in controversial weapons based on its own activities.

¹ Note that the fund-wide restrictions and exclusions differ from the equivalent restrictions and exclusions for the Socially Conscious options. The Socially Conscious restrictions and exclusions are broader and the revenue thresholds for tobacco, thermal coal and nuclear weapons are lower. In addition, the Socially Conscious restrictions and exclusions apply to all investments other than derivatives. See Socially Conscious investment options for more information. 

² There are currently no directly held unlisted thermal coal mining assets within the fund. However, the trustee may acquire an interest in such assets as a result of a merger with another superannuation fund. If this occurs, the relevant assets will be sold at fair value as soon as reasonably practicable.

³ This exclusion does not apply to companies involved in the deployment of these types of weapons such as aviation companies.

⁴ For directly held liquid investments such as shares and bonds, this verification is undertaken by our ESG data provider ISS STOXX. For unlisted direct investments, an internal assessment is made.

⁵ A component is a key component if it plays an essential role in the functionality of the specified weapon system or is specifically designed or modified for the specified weapons.

⁶ Note that these document titles may change as ISS STOXX may update their website from time to time. 

Measuring our positive impact

We believe one of the real opportunities for us as a responsible owner is developing a way to measure and monitor the impacts of our investments. One way we have responded to this opportunity is by creating our Positive Impact Measurement Framework and Sustainable Development Investing Assessment methodology.

Measuring this positive impact is critical to ensuring our investments are effective at instigating and maintaining change, compared to what would’ve happened without financing.

You can read more in our Responsible Investment Report.