Our responsible ownership approach means we integrate environmental, social and corporate governance (ESG) considerations into our investment processes. We do this before we invest and continue during our ownership.
ESG stands for environmental, social and governance.
Integrating a consideration of ESG factors into our investment processes helps us manage risk and generate strong long-term returns for our members.
Examples of some of the ESG factors we consider include:
Our responsible ownership approach has five pillars:
We integrate a consideration of ESG factors into our investment processes. Our approach is not limited to a set-and-forget analysis of an investment. We take a holistic approach to assessing ESG risks and opportunities throughout our investment ownership.
Here are some examples of key ESG factors we consider:
Environmental factors
Social factors
Governance factors
Our approach to ESG integration is not limited to a set-and-forget analysis of an investment, but rather is a holistic approach to assessing ESG risks and opportunities over an investment’s life. We do this by considering ESG factors in our asset and manager due diligence and selection, when we first invest and through ongoing monitoring.
When selecting investment managers, it’s important to determine how well they integrate ESG issues into their portfolios because this supports better long-term returns for our members. We focus on managers’ policies, alignment, transparency, process, and active ownership approach.
We have been recognised by the UN-backed Principles of Responsible Investment as leaders for our approach to manager selection, appointment and monitoring.
Read more about how we assess investment managers in our Responsible Investment Report.
We believe we’re more effective and have a greater impact when we work together with industry associations and like-minded investors.
We have contributed to policy, advocacy, market development and education.
We have also encouraged change by making submissions to reforms (either directly or through our advocacy partners).
Stewardship means actively monitoring and engaging with the companies we invest in and the fund managers we partner with.
We aim to positively influence a company’s policies, behaviours and practices in areas such as:
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
Engagement through our partners:
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 a particular sector or company from our investment portfolios.
As a result, we have implemented fund-wide restrictions and exclusions, so we don’t invest in:
1 The fund-wide controversial weapons exclusion does not apply to companies involved in the development, production or maintenance of nuclear weapons. Note that these companies are excluded from the Socially Conscious investment options. See Socially Conscious investment options for more information.
Note that the above exclusions don’t apply to indirect exposure to these types of companies. This includes derivatives, exchange traded products such as ETFs, and investment vehicles governed by an uncontrolled entity including, but not limited to, unit trusts and fund of funds via pooled vehicles. In addition, the implementation of these 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.
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.
