Our ESG and Stewardship program
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:
| Environmental | Social | Governance |
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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 classes.
Our ESG and Stewardship program has three pillars:
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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.
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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.
Company engagement
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:
- Relationship building: helping companies understand the importance of ESG factors on an ongoing basis.
- Themes-based engagement: focusing on strategic ESG themes that our ESG program has identified as a priority.
- Company specific issues engagement: seeking resolution of specific ESG concerns or engaging on a particular voting matter.
AustralianSuper’s engagement program includes:
- Engaging with Australian listed companies directly and via the Australian Council of Superannuation Investors (ACSI).
- Our subscription to EOS at Federated Hermes, which grants us access to insights and opportunities regarding engagements with over 1,000 international companies annually.
- Working 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.
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 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 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.
AUSTRALIANSUPER’S SHARE VOTING APPROACH (PDF) ESG and stewardship policy (PDF)
Share voting records
Australian Share Voting – 1 July 2023 to 30 September 2023 - pdf, 708KB
International Share Voting – 1 July 2023 to 30 September 2023 - pdf, 810KB
Australian Share Voting – 1 July 2022 to 30 June 2023 - pdf, 751KB
International Share Voting – 1 July 2022 to 30 June 2023 - pdf, 7.9MB
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 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.
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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 option.
Your investment options – find out more
ESG and stewardship policies
ESG and Stewardship policy
Download our policy to find out more about our approach to ESG and stewardship.
ESG and stewardship policy (PDF) ESG and stewardship policy (PDF)
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 seek long-term value creation through our stewardship activities.
AustralianSuper’s stewardship statement (PDF) AustralianSuper’s stewardship statement (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 to amplify our voice
Working with other investors and industry groups gives us better insights and more influence on 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). 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.
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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 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 activities.
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Responsible Investment Association Australasia
The Responsible 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.
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Other collaborative initiatives
- Climate 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.
- Australian 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.
- Investor Group on Climate Change (IGCC): a collaboration of Australian and New Zealand institutional investors focused on the impact of climate change on investments.
- Institutional Investor Group on Climate Change (IIGCC): a collaboration of European institutional investors focused on the impact of climate change on investments.
- Sustainable Development Investments Asset Owners Platform (SDI AOP): AustralianSuper jointly established the SDI-AOP to help investors evaluate companies on their contribution to the UN Sustainable Development Goals.
- Investors 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 investment risks.
- International 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 and processes.
Reporting our progress
We participate in industry reporting projects to monitor the success of our ESG and Stewardship program.
PRI 2021 Assessment
AustralianSuper 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.
AustralianSuper’s full PRI results are available in our PRI Assessment and Transparency Reports available here:
References:
- Responsible Investment Association Australasia, https://responsibleinvestment.org/about-us/
- Climate Action 100+, https://www.climateaction100.org/
- 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.