ESG Management is an integral part of our Active Owner Program
Our Active Owner Program is embedded across our investment decision-making framework at three levels:
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1. ESG integration – choosing our investments(1)
ESG factors are considered before we make an investment and throughout the life of the investment, whether we’re investing directly or through external managers.
Download our fact sheet to see how we integrate ESG factors into each asset class.
ESG integration in each asset class - pdf, 386KB
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2. Stewardship – using our influence(4)
As an active investor we exercise the rights and responsibilities of being a large shareholder. Our objective is to effectively communicate our long-term investment interests to companies so that we can improve returns for our members.
Direct engagement is important as it enables us to influence the make-up of company boards and encourage positive behaviour on issues that impact our members.
AustralianSuper predominately seeks to influence companies through our voting and engagement activities, and sometimes gets involved in class actions.
Company engagement
We regularly engage with the companies we invest in and the fund managers who invest on our behalf.
We believe that proactive and early engagement with companies on ESG factors gives us the ability to influence outcomes that can maximise investment performance for our members.
Our engagement process encompasses three key areas:
- Ongoing relationship building: ensure companies understand the importance of ESG factors on an ongoing basis.
- Themes based engagement: focus on specific ESG themes that our ESG program has identified as a priority.
- Ad hoc specific issues engagement: seek resolution of specific ESG concerns or to engage on a particular voting matter.
AustralianSuper’s engagement program works on several levels:
- Engaging directly with companies
- Working in conjunction with the Australian Council of Superannuation Investors (ACSI)
- Working collaboratively with other like-minded investors.
Class actions
Class actions are a way that shareholders, as a collective group, can claim for losses against a company where a reasonable case can be made that the loss occurred due to breaches of corporate regulations. Class actions aren’t appropriate in cases where a loss is a result of a judgement, where directors applied reasonable skill and judgement, which turned out to be wrong.
AustralianSuper uses class actions as a:
- last resort governance mechanism;
- cost-effective way to recover member losses caused by a company’s misleading and deceptive conduct; and
- mechanism to improve general governance standards in the market.
In our role as Trustee for all members, we carefully consider whether or not we will join a Class Action. We generally only participate if we've had a large investment across the whole portfolio. If we participate we do so on an anonymous basis to ensure we do not adversely affect other investments. If the Class Action is successful any proceeds, after costs, are apportioned back to the investment options that held the investment.
As a general rule we will participate in class actions as a class member where:
- It has been determined that there is a genuine allegation of a breach of law;
- This breach resulted in a large financial loss for the Fund;
- A reliable and reasonable assessment that there are low (and reasonable) costs associated with the litigation has been made; and
- It has been assessed that there are no significant reputational risks to AustralianSuper
Member Direct and Class Actions
Class Actions in relation to smaller investments, including those in Member Direct are not generally pursued. Members are unable to participate individually as they do not directly own the investment. Proceeds, after costs, from successful actions are apportioned back to the relevant investment options to offset some of the costs of the option. They do not go back to individual members.
Share voting
Voting on resolutions at general meetings is a key right and responsibility for shareholders. It presents a significant opportunity for us to communicate our view on how companies are performing in creating long-term investment value for members.
AustralianSuper votes on company and shareholder resolutions for Australian and international listed companies. Every year, we vote on company and shareholder resolutions on issues ranging from director elections and remuneration plans to climate change and mergers and acquisitions.
The Fund supports resolutions that enhance value, promote or require appropriate disclosure, ensure effective board composition and operation, and encourage appropriate pay-for-performance remuneration outcomes.
We actively consider climate change-related shareholder resolutions on which we vote, supporting those we believe are effective in achieving a net zero economic transition and/or will result in improved disclosures on climate change.
We may consider advice from proxy advisors and external managers, but ultimately make our own decisions based on what we believe will promote long-term company value and investment outcomes for members.
We value transparency in relation to our voting and vote on thousands of resolutions each year. You can view our voting records online and more about our approach to voting via the Share Voting Approach document below.
AUSTRALIANSUPER’S SHARE VOTING APPROACH (PDF) ESG and stewardship policy (PDF)
Share voting records
Australian Share Voting - 1 July 2021 to 31 March 2022 - pdf, 602KB
International Share Voting - 1 July 2021 to 31 March 2022 - pdf, 5.3MB
Australian Share Voting - 1 July 2020 to 30 June 2021 - pdf, 689KB
International Share Voting – 1 July 2020 to 30 June 2021 - pdf, 16.9MB
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3. Choice – reflecting our members’ values
Many members have different values, so it’s important we consider these preferences in our investment choices. Every two years we survey members to ensure we keep up to date with what’s important to them.
Our latest research showed that most members were happy with the investment approach of our Balanced option and its approach to ESG integration – this approach is consistently applied across all options.
For members who want the choice to invest based on their values, we offer the Socially Aware and Member Direct options.
ESG and stewardship policies
Australian Asset Owner Stewardship Code
AustralianSuper is a signatory to the Australian Asset Owner Stewardship Code (the Code). Download our Stewardship Statement to see how we promote long-term value creation in the listed equities we invest in through our stewardship activities.
AustralianSuper’s stewardship statement (PDF) AustralianSuper’s stewardship statement (PDF)
Download our policy to find out more about our approach to ESG and stewardship
ESG and stewardship policy (PDF) ESG and stewardship policy (PDF)
Share Voting approach
This document outlines our approach to voting on Australian and international companies.
AUSTRALIANSUPER’S SHARE VOTING APPROACH (PDF) AUSTRALIANSUPER’S SHARE VOTING APPROACH (PDF)
Collaborating for bigger impact
Working with industry investors and groups gives us better insights and more influence on shared ESG issues.
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The Australian Council of Superannuation Investors
AustralianSuper, with other major Australian super funds, is a member of the Australian Council of Superannuation Investors (ACSI) engages with companies and policymakers with the ambition of progressing material ESG issues on behalf of its superannuation fund members.
We also use ACSI as a proxy voting advisor, which is a key input into our active voting process.
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Principles for Responsible Investment
We’ve been a signatory to the United Nation’s Principles for Responsible Investment (PRI) since 2008. PRI develops and implements six global principles that help integrate ESG factors into mainstream investment practices and provides guidance on key challenges.
Membership of the PRI means we have agreed to implement these principles, work collaboratively with other signatories on responsible investment issues and be reviewed on an annual basis on our progress on ESG activities.
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Other collaborative initiatives
- Investor Group on Climate Change: an industry group that aims to ensure that risks and opportunities associated with climate change are incorporated into investment decisions for the benefit of the investor.
- Carbon Disclosure Project: a global initiative that asks the largest companies to disclose investment-related information about their greenhouse gas emissions.
- ESG Research Australia: a research organisation that aims to encourage better investment decision making through better ESG investment research.
- Asian Corporate Governance Association: a member organisation dedicated to working with investors, companies and regulators in the implementation of effective corporate governance throughout Asia.
Reporting our progress
We participate in global industry reporting projects to monitor the success of our Active Owner Program.
PRI Global Assessment Report
The PRI assesses each signatory annually. In the 2020 PRI Global Assessment Report, AustralianSuper achieved the highest possible rating of A+ for its Overarching Approach to Responsible Investment.
Responsible Investment Association Australasia
Australia has been recognised as a Responsible Investment Leader in the RIAA 2021 Responsible Investment Benchmark Report Australia and RIAA 2021 Responsible Investment Super Study
Active Owner Program in practice
ESG issues are important as they can impact the future value and investment performance of assets, which is important for our members.
There are many important ESG issues facing asset owners today. Here’s an overview of some of the biggest issues we’re managing through our Active Owner Program.
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Climate change
Climate change is one of the most significant investment issues facing investors today. Climate related risks will impact all economies, asset classes and industries.
AustralianSuper supports the goals of the Paris Agreement on climate change, which aim to limit global warming to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5° Celsius by 2100.
We believe we can drive the transition to a low carbon economy by the way we invest, and our actions as asset owners.
AustralianSuper is committed to continually building and improving our climate change processes and disclosure in line with industry best practice. Our climate change report explains how we’re managing the transition to the low carbon economy in our portfolios, and tracks our performance against various climate change metrics.
Find out more on our climate change page
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Gender diversity
Research shows that skilled and suitably diverse boards make for better-governed companies and better long-term performance.
We're working to increase the board diversity of the companies we invest in.
Find out how we’ve been working to increase the board diversity of the companies we invest in through Active Owner Program.
Active Owner Program and Gender diversity Active Owner Program and Gender diversity
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Human rights and labour supply chain
Inadequate supply chain management can expose companies to operational, financial and reputation risks relating to child or forced labour (constituting modern slavery), in addition to inequality, discrimination and poor working conditions.
The labour supply chain is the chain of people that link the activities involved in the planning, sourcing of materials, and production of goods. These activities can take place in more than one country.
As a significant global investor, we believe we have a responsibility to use our size to advocate for improved outcomes on ESG issues, such as modern slavery. By actively addressing modern slavery and collaborating with other investors and civil society, we believe we are heightening awareness of this issue and contributing to the mitigation of modern slavery risk for the most vulnerable people globally.
From an investment perspective, these issues can impact the long-term value of a company.
See how we manage these issues through our Active Owner Program and our detailed Modern Slavery Statement.
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Executive remuneration
Executive remuneration is a key issue in society and for investors alike. Ensuring that there are the right long-term value creation mechanisms in place in a company and that value is fairly distributed is an important focus of our active owner program.
Our active owner program aims to ensure remuneration frameworks deliver appropriate pay for performance outcomes, reasonable pay levels and transparent disclosure.
Find out how
Active Owner Program and Executive remuneration Active Owner Program and Executive remuneration