At First State Super our philosophy is members first. Everything we do and every decision we make is for our members.
Why invest responsibly?
We care deeply about the communities and ecosystems we’re part of, so focusing on environmental, social and governance (ESG) when investing is in our DNA. Not only do companies which act sustainably consider the environment and the community as well as their workforce, but they also create a great workplace which is going to perform better over the long term. Therefore, they’ll provide greater returns to our members in the process.
Responsible Investment (RI) is actively considering environmental, social and corporate governance factors (also referred to as sustainability considerations) within investment decision making and ownership practices.
At First State Super it is more than just about integration; as a universal owner we have the opportunity to make a real difference. What we invest in will impact the environment, the community and our members’ retirement savings.
Who we are
Our RI team is a part of our broader investment function. Our Head of RI reports to the Chief Investment Officer (CIO) and has a team of four dedicated analysts researching ESG issues.
What we do
Environmental, Social and Governance (ESG) research: we focus on issues such as clean energy; toxic waste management; social licence to operate, safety and good governance, including diversity.
Active Ownership: we actively engage with companies on ESG issues and use our voting rights to influence and generate positive outcomes.
Advocacy: we influence public policy to ensure all companies are promoting a long-term sustainable industry.
Appointments: we seek to appoint investment managers who share our RI philosophy.
Responsible investment in action
At its core, Responsible Investment involves understanding all risks when making investment decisions. Integrating environmental, social and governance factors allows us to take a holistic view; it means using our ownership to influence corporate behaviour and long-term value creation.
We do this by voting at company AGMs and engaging with companies. As shareowners, we believe we have an obligation to ensure that the companies we invest in are directed and controlled by boards of directors and senior executives in an appropriate way – which will enhance their performance over the longer term, and hopefully produce better financial outcome for members. We vote on issues such as executive remuneration, director elections, capital raisings and shareholder proposals relating to environmental and social issues. In 2017 we voted on over 400 issues and took a contrary position to management 11% of the time.
We also engaged with corporations and policy makers to drive change and develop strategies to address these matters. We’ve worked to assess our investment managers and ensure they factor these risks and strategies into their decision making, as well as engaging directly with companies. Finally, we actively seek sustainable investments. With the lowering cost of renewables and increasing evidence of climate change related risks, we know it’s good business sense.
By incorporating environmental, social and governance factors into our decision making, we can better manage risks that affect investment performance. This not only helps facilitate long-term, sustainable returns – it also helps secure prosperity for all of us, now and into the future.