• Responsible investing

  • What is responsible investing?

    Responsible investing, also known as sustainable, socially conscious, green or ethical investing, is any investment strategy which seeks to consider both financial return and social good.

    It's the integration of environmental, social and corporate governance (ESG) factors into investment management processes and ownership practices in the belief that these factors can have a material impact on financial performance. It involves research, selection and monitoring of an investment security or portfolio.

    You want your super and savings to be safe and earn the best possible returns. There are also issues you may feel passionate about:

    • Environmental—Climate change, unsustainable consumption of natural resources
    • Social—Human rights, labour standards, health and safety
    • Governance—Corporate governance and ethics.

    Responsible investment gives you a way to base financial decisions on your convictions, end up with solid returns and make a positive contribution to our world.

  • Why invest responsibly?

    Responsible investment is a way to generate competitive returns and find sustainable solutions to many of the challenges we face in the 21st century. By managing ESG impacts and opportunities, the Fund is likely to be more financially sustainable in the long term and should deliver better long-term financial performance.

    Events in the natural world and the economy show how environmental and social issues can impact directly on the performance of companies.

    Adopting a responsible investment approach is about ensuring you are minimising your exposure to the financial risks increasingly associated with such factors as:

    • Climate change
    • Changing energy needs
    • Poor ethical and governance practices
    • Water shortages and exploitative labour practices.

    For example, whatever solutions governments finally agree as the best ways to lessen the impacts of climate change will have an impact on the profitability of companies all around the world.

    Why? Because companies who emit carbon will, at some point, pay for their pollution levels, and those who are helping to reduce carbon, such as renewable energy and energy-efficient companies, will be provided with:

    • Attractive financial benefits
    • Competitive advantage
    • Efficiency savings
    • Reputational benefits and
    • Employee loyalty and incentives.

    The Global Financial Crisis (GFC) had a devastating effect on individuals and communities worldwide and has led investors to demand greater accountability from the companies in which they invest. Companies and financial markets needed to rebuild with an improved regulatory framework, improved ethics and governance standards, and address the short-term preoccupations which led to the GFC.

    If you find yourself talking about environmental, social and ethical issues that you are passionate about, why not invest your money in line with these causes as well?

  • How Australian Catholic Superannuation invests responsibly

    PRI logoAustralian Catholic Superannuation has been a signatory to the United Nations Principles of Responsible Investment (UNPRI) since May 2009. These principles provide a framework for the investment community to achieve better long-term investment returns and more sustainable markets using ESG criteria. We encourage each of our investment managers to consider ESG factors alongside traditional financial measures when making investment decisions.

    In addition to the ESG integrated approach, Australian Catholic Superannuation also offers an investment option—Socially Responsible Balanced—that takes into account labour standards and environmental, social and ethical issues. This option is currently invested in the AMP Capital Responsible Investment Leaders Balanced Fund.

    The Responsible Investment Leaders Balanced Fund uses a multi-manager approach in implementing its Sustainable and Responsible Investment strategy. In selecting managers, consideration and assessment is made from a combined financial, social and environmental perspective. From a social and environmental perspective, AMP Capital seeks out managers that are identifying leaders across industries, in their responsible approach to the following issues:

    • Environmental considerations—including energy and resource use and product stewardship (for example, where a company takes into account the life cycle of the product, from manufacture to the extent to which the product can be recycled)
    • Social considerations—including indigenous relations and community involvement; ethical considerations, including meeting fundamental human rights; and articulating and implementing a Code of Conduct
    • Labour standards—including occupational health and safety; International Labour Organisation standards; working conditions; and the exclusion of child labour and governance considerations, including meeting corporate governance guidelines on board structures and remuneration.

    Managers are also required to avoid companies operating within sectors with recognised high negative social impact. This means the underlying funds will avoid exposure to companies with material exposure to:

    • The production or manufacture of alcohol
    • Armaments
    • Gambling
    • Pornography
    • Tobacco
    • Uranium.

    Material exposure is considered to be where a company derives more than 10% of its total revenue from these industries. In addition to the specific negative screens, the underlying managers generally adopt a balanced scorecard approach to determine whether they can invest in a particular company.

    As part of our diversified portfolios, Australian Catholic Superannuation also invests in a number of funds that focus on ESG themes. These include the:

    • Generation Climate Solutions Fund—which focuses on renewable energy generation and distribution, energy efficiency, carbon markets and climate-related financial services.
    • Energy Infrastructure Fund—which invests a large proportion of its assets in a number of wind farms and has investments in Australian renewable fuels.
    • Sustainable Agriculture Fund—which has an investment strategy focused on farming sustainably.

    Further, infrastructure investments in our other funds also include those based on renewable energy generation, such as hydro and solar energies, as well as investment in desalination plants.

  • Our other socially responsible investment memberships

    To implement the UNPRI and support responsible investing initiatives, Australian Catholic Superannuation is a member of the:

    RIAA logo  

    Responsible Investment Association Australasia (RIAA)

    RIAA is committed to promoting the concept and practice of responsible investment to the general public, the mainstream investment community, analysts, superannuation trustees, financial advisers, regulators, religious, charitable and other values-based organisations, government and non-government organisations and to the corporate sector. For more information, visit the RIAA website.

     IGCC logo  

    Investor Group on Climate Change (IGCC)

    IGCC aims to encourage government policies and investment practices that address the risk and opportunities of climate change for the ultimate benefit of superannuation fund members. For more information, visit the IGCC website.

     ACSI logo  

    Australian Council of Superannuation Investors (ACSI)

    ACSI provides independent research and advice to superannuation funds on the environmental, social and corporate governance risks of companies in which they invest. ACSI engages with government, regulators and the investment industry to promote governance best practice on ESG standards. For more information, visit the ACSI website. 

     ESG RA logo  

    ESG Research Australia (ESG RA)

    ESG Research Australia is an Australian association of superannuation funds, fund managers and asset consultants which has the single objective of increasing the amount and quality of stock broker research in Australia that includes consideration of environmental, social and governance (ESG) issues. For more information, visit the ESG RA website.

  • Want to know more?

    For more information, you can download AMP Capital Investors’ most recent Responsible Investment Leaders Balanced Fund Quarterly Report (PDF) which includes a market and economics overview, investment performance figures and a responsible investing update.

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