We believe companies with good Environmental, Social and Governance (ESG) management provide better long-term returns.
AustralianSuper considers a range of ESG issues but
prioritises those which we believe are likely to have the greatest financial
impact on members’ investment returns. This can include risks, which can have a
negative impact, and opportunities, which can have a positive impact.
Issues we may prioritise include:
First Nations/cultural heritage
Our approach is more developed on some issues than
others and may vary depending on the asset. For more information on these
issues, please see the Responsible Investment section of our Annual Report.
Our ESG and
Stewardship program varies by asset class and doesn’t apply to all asset
Our ESG and Stewardship program has three pillars:
1. ESG integration – choosing our investments
ESG integration refers to the way we integrate ESG considerations when deciding which assets and companies to invest in and assessing their investment value. Our ESG integration approach varies by asset class and the characteristics of our investment, including whether we’re investing directly or through external managers.
2. Stewardship – using our influence (12)
As an active investor we exercise the rights and responsibilities of being a large shareholder. Our objective is to effectively communicate our investment interests to companies in a way which is consistent with maximising long-term value for members.
AustralianSuper predominately seeks to influence listed companies through our engagement, voting activities and select involvement in class actions.
We meet directly with the chairs and board members of ASX-listed companies on ESG issues that we believe can impact long-term value.
Direct engagement is
important as it provides the opportunity for us to influence the make-up of
company boards and encourage positive behaviour on issues that we believe can
impact members’ investment returns.
Our engagement process encompasses three key perspectives:
helping companies understand the importance of ESG factors on an ongoing basis.
focusing on strategic ESG themes that our ESG program has identified as a
Company specific issues engagement: seeking
resolution of specific ESG concerns or engaging on a particular voting matter.
AustralianSuper’s engagement program includes:
Australian listed companies directly and via the Australian Council of
Superannuation Investors (ACSI).
subscription to EOS at Federated Hermes, which grants us access to insights and
opportunities regarding engagements with over 1,000 international companies
collaboratively with other like-minded investors through collaborative
initiatives, such as Climate Action 100+ and Investors Against Slavery and
Trafficking Asia Pacific.
AustralianSuper also periodically meets with the
boards, management and investment managers of our unlisted assets.
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 creating long-term investment value for members.
votes on company and shareholder resolutions for Australian and international
listed companies. Every year, we vote on resolutions on issues such as director
elections, remuneration plans, climate change and mergers and acquisitions.
Each individual resolution is considered
on its own merits through the members’ best financial interest lens. We may
consider advice from proxy advisors, but ultimately make our own decisions
based on what we believe will create or enhance long-term company value on
behalf of members.
We vote on thousands of resolutions each
year. You can view our voting records online and learn more about our approach
to voting via the Share Voting Approach document below. This document includes
our principles on voting on director elections, board accountability, board
gender diversity and executive remuneration.
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 laws/regulations relating to the company’s conduct or market disclosures.
AustralianSuper uses class actions in members’ best financial interests as a:
Last resort governance mechanism;
Cost-effective way to recover member losses caused by a company’s conduct or market disclosures; and
Mechanism to improve standards of company practice in the market.
If the class action is successful any proceeds, after costs, are apportioned back to the investment options that held the investment.
Factors we consider when deciding if we will participate in Australian class actions as a class member include whether:
It has been determined that there is a genuine allegation of a breach of law;
This breach resulted in a financial loss for the Fund;
There is a reliable and reasonable assessment that the costs associated with the litigation are low (and reasonable); and
It has been assessed that there are no significant reputational risks to AustralianSuper.
For Member Direct, the Fund is not able to accommodate individual participation in class actions as holdings are indirectly held on members’ behalf by AustralianSuper.
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.
3. Choice – reflecting our members’ values
We understand that members have diverse values, preferences and
attitudes when it comes to investing. To help understand what’s important to
members we undertake member surveys. We consider
this research in the investment options we offer.
We have a range of
investment options for members to choose from, including the Socially Aware
Working with other
investors and industry groups gives us better insights and more influence on
The Australian Council of Superannuation Investors
AustralianSuper, with other major Australian super
funds, is a member of the Australian Council of Superannuation Investors (ACSI). ACSI engages with
companies and policymakers with the ambition of progressing company performance on ESG issues on behalf of
its superannuation fund members. AustralianSuper participates in a range of
ACSI working groups and may also consider ACSI’s proxy voting advice.
Principles for Responsible Investment
We’ve been a signatory to the United Nation’s Principles for Responsible
Investment (PRI) since 2008. PRI has
developed six global principles to help investors integrate ESG factors into
investment practices and provides guidance on key ESG 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
Responsible Investment Association Australasia
Investment Association Australasia’s mission is to promote, advocate for and
support approaches to responsible investment that align capital with achieving
a healthy and sustainable society, environment and economy1.
Other collaborative initiatives
Action 100+: AustralianSuper is a founding member and global steering
committee member of Climate Action 100+, the world’s largest investor
engagement initiative on climate change. Climate Action 100+ is promoting
change in more than 160 of the world's largest carbon emitters2.
Industry Energy Transitions Initiative (ETI): We’re a founding partner of
the ETI, which supports Australian heavy industry to accelerate action towards
achieving net zero emissions in their supply chains by 2050.
Group on Climate Change (IGCC): a collaboration of Australian and New
Zealand institutional investors focused on the impact of climate change on
Investor Group on Climate Change (IIGCC): a collaboration of European institutional
investors focused on the impact of climate change on investments.
Against Slavery and Trafficking Asia Pacific (IAST APAC): AustralianSuper
is a founding member, Steering Committee member and current co-chair of
IAST APAC. IAST APAC is creating a framework and engagement program to promote
best practice approaches to identifying and mitigating modern slavery
Corporate Governance Network (ICGN): AustralianSuper is a member of ICGN
and endorses its Global Stewardship Principles, which set out ICGN’s view
of current best practices in investor stewardship obligations, policies
Reporting our progress
We participate in industry reporting projects to
monitor the success of our ESG and Stewardship program.
PRI 2021 Assessment
achieved above or at median ratings for 14 out of the 15 assessment modules in
PRI’s 2021 pilot assessment report3. This includes five stars (the highest
possible rating) for its Investment and Stewardship policy, direct listed
equity integration approach and direct property and private debt approach.
PRI results are available in our PRI Assessment and Transparency Reports available
AustralianSuper PRI Assessment Report 2021
- pdf, 715KB
PRI 2021 Pilot Assessment report. PRI introduced a revised pilot Reporting Framework in its 2021 assessments with a different module grading system which shifted from alphabetical (A+ to E) in previous years to numerical (1 to 5 stars) ratings. The PRI Assessment report presents information reported directly by signatories in the 2021 reporting cycle. This information has not been audited by the PRI or any other party acting on its behalf.