Policy
> Our Premise
> Our Measures
> Our Commitment
What Does the Ethical Symbol Mean?
Methodologies Used in Ethical Investment Screening
> Australian
> International
The Christian Bible teaches us how to live, including investment and the management of money. We understand “Ethical investments” to be investments that are consistent with standards and values set by the Bible and by Jesus Christ himself. The Bible teaches us responsible and sustainable investing. This flows out of the declaration that God himself is the creator and the ultimate owner of all that we see, (Ps 24:1, Job 41:11), and has charged us with the responsibility of being stewards on His behalf, (Gen.1:26-28, Matt. 25:20-21).
In measuring investment suitability against these Biblical standards and values, we believe that over the long term our investments will achieve greater and more sustainable returns for investors. We also believe that we have a responsibility to manage our money in line with these principles and to make a difference in the society and communities in which we live.
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We measure the acceptability of our investments by seeking investments in companies and industries that uphold and adhere to the following standards and values:
Financial Best Practices
- Proactive governance and accountability
- Honesty and integrity
- Transparent and timely reporting
- Sustainable financial returns
- Solid risk management
Social Responsibility
- Responsible and fair workplace management practices*
- Responsible community and stake-holder relations
- Tolerance, respect and dignity for all persons
- Encouragement of family values
Environmental Care
- Efficient energy and resource use
- Long term, sustainable environmental practices
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Where possible and practical we will:
- avoid investment in organisations that do not measure favourably against the above standards and values;
- seek to introduce investment options for our members that provide the ability to actively screen out negative business practices (e.g. gambling, pornography and human rights abuse) and encourage positive business practices (e.g. proactive community care, family values and fairness);
- seek to positively influence fund managers and companies through active engagement, both directly and in conjunction with other like minded investors.
*At the present time, the above Policy applies explicitly to screened investments only. Unscreened investment options therefore may not specifically take into consideration labour standards or environmental, social or ethical considerations.
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ACSuper has been certified by the RIAA according to the strict disclosure requirements under the Responsible Investment Certification Program.
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ACSuper has been certified by RIAA according to the strict disclosure practices required under the Responsible Investment Certification Program. See www.responsibleinvestment.org for details.
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For Australian investments, the underlying manager (currently Van Eyk Ethical) employs the following ethical investment methodology. The manager draws upon the S&P/ASX 200 and about 50 smaller companies using the Corporate Monitor 5 Star Rating System for environment, social and governance performance. The Model Portfolio’s universe of eligible companies has:
- No direct involvement in gaming, tobacco, weapons or uranium mining
- An environment rating of 3 or better (as rated by Corporate Monitor)
- A social and governance rating of 2 or better (as rated by Corporate Monitor)
Corporate Monitor’s rating descriptions
Environmental rating:
- environmental impact of products and services – uranium, logging, mining, greenhouse gas, plastics, packaging, recycling, genetically modified food and energy
- environmental reporting
- environmental management
- penalties for environmental compliance
- environment awards
- pollution levels.
Social rating
- community relations and philanthropy
- human rights
- indigenous issues
- involvement in weapons and defence equipment
- products associated with ethical social concerns – alcohol, tobacco, and gaming
- labour standards – employment practices and policies, record for employee discrimination, equal opportunity in the workplace, occupational health and safety, and employment disputes.
Governance rating
- legal compliance – corporate governance, trade practices, fair trading
- instances of organised shareholder activism, or complaints on behalf of shareholders concerning ethical business conduct and corporate governance behaviour
- governance awards
- CEO and Senior Executive Remuneration
- non-Executive Director and Chairman’s remuneration
- auditor’s remuneration for services other than auditing
- board committee structures and independence
- concentrated shareholdings
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For international investments, depending on the underlying manager(s),
there are currently two different methodology employed.
Methodology One
Current manager is AMP Capital Responsible Leader International Shares
In selecting managers, consideration and assessment is made from a financial, social and environmental perspective. Financial analysis, which is conducted in partnership with independent consultants, includes detailed analytics together with a review of each manager’s investment process, team and style.
Specifically, we seek out managers that are identifying leaders across industries, in their responsible approach to the following SRI 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
- Governance considerations
– including meeting corporate governance guidelines on board structures and remuneration. Additionally, investment managers and funds will also be well regarded if they actively participate in corporate engagement and governance initiatives.
Managers are also required to avoid companies operating within sectors with recognised high negative social impact. This means the Funds will avoid exposure, either directly or indirectly through underlying managers and funds, to companies with material exposure to the production or manufacture of alcohol, armaments, gambling, pornography, tobacco and uranium. Material exposure is considered to be where a company derives more than 10% of its total revenue from these industries.
Methodology Two
Current manager is Hunter Hall
Underlying manager implements its ethical investment policy by seeking to avoid investment in businesses that are, in its opinion, involved in activities that are harmful to people, animals or the environment.
Specifically, this involves the use of a ‘negative screen’ which restricts investment in companies that derive revenues associated with the sale of armaments or tobacco, gambling, factory farming, destruction of the environment and uranium mining.
While the negative screen as described above may seem straightforward, investors should be aware that from time-to-time borderline cases arise where it is unclear whether a potential investment should be rejected or not. In such cases the Directors of the underlying manager retain the right to exercise their collective judgement and will take the merits of the investment into account.
Acknowledging the difficulty with such borderline cases, the underlying manager follows a policy of transparency in relation to investments and aims to provide as much information about the Trusts’ investments as possible to investors.
The underlying manager investment team continually monitors all investments in the Trusts. In the event that the activities of an investee company change, or if additional information becomes available such that the investment is considered to breach the ethical investment policy, the investment is disposed of as soon as practicable. When disposing of an asset under such circumstances the manager endeavours to dispose of the asset for the best price it reasonably can, taking into account liquidity and other market forces. It is possible therefore that disposal of such an investment could extend over a period of time.
Investors should be aware that our ethical policy does not restrict investment in businesses engaged in mining, the manufacture or sale of alcohol*, or which use animal by-products.
*at time of printing the underlying manager has confirmed that they do not hold any stocks in the Alcohol industry.
We are of the view that mining does not necessarily cause permanent damage to the environment provided that due attention is paid to site remediation, control of contamination, worker safety and the welfare of any nearby population.
Labour standards are not taken into account in the selection, retention or realisation of investments.
The fund may, from time to time, have varying exposure to methodology one or two.
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