Our commitment to responsible investment is underpinned by our consideration of ESG issues in the acquisition and stewardship of our investments.
The value of individual assets is affected by ESG factors. They are considered as part of the investment process so we are better placed to deliver sustainable, long-term investment returns for members. This applies to investments that we make directly, along with investments through external professional investment managers.
An assessment of ESG factors is important for the risk management of investments. Consideration of ESG factors in the investment process helps assess risks and opportunities of investments, particularly over the longer-term.
Issues include climate change, impact on local environment, pollution, waste, policy and regulatory changes.
Issues include health and safety, human rights, labour standards, workforce diversity, equal opportunity.
Issues include board composition, risk management, transparency, market conduct, executive remuneration.
ESG and our investment process
We apply our ESG Policy across all investment options and apply consideration of ESG issues in the acquisition and management of our assets. Our ESG Policy includes a commitment to adopt a proactive approach to ESG by those companies that we invest in, whether directly or via an independent investment manager, and to encourage the implementation of ESG policies and supervision systems.
We engage with the companies that we invest in and use proxy voting to influence their behaviour to act responsibly as we exercise shareholder voting rights. Our Proxy Voting Policy sets out how we exercise our voting rights across our investment portfolio.
We may not invest in a sector or company if we consider an investment is not appropriate for the fund to the extent that it may have a negative impact on the returns and/or the reputation of the fund. Tobacco is currently explicitly excluded from the investment strategy.
Commitments from our investment consultant
We use an investment consultant, Whitehelm Capital, to provide advice on investment strategy and manager selection. Whitehelm is a signatory to the United Nations backed Principles for Responsible Investing, a member of GRESB Infrastructure and a supporter of Taskforce for Climate Related Financial Disclosures (TCFD).
Whitehelm plays a key role in the identification of and investment in direct and infrastructure assets.
Whitehelm states that “The long-term, capital intensive nature of infrastructure assets means that the incorporation of ESG considerations is a critical component of protecting and increasing value. Whitehelm’s focus on these issues permeates each step of our investment process from acquisition through to divestment and includes actively working with our portfolio companies to disseminate these beliefs.”
Sustainable Responsible Investment option
We offer a Sustainable Responsible Investment balanced (SRI) option for members who want to incorporate social and environmental values into their super investments and avoid some industries.
The investment philosophy is for exposure to an actively managed diversified portfolio of investments across a wide range of asset classes, whilst incorporating environmental, social, and governance (ESG) screens to ensure only those companies with strong ESG credentials make it into the portfolio. Investment stewardship actively engages with companies to manage risk, effect change, and realise potential value over the long-term.
Find out more about climate change and our investments: