We believe the effective management of environmental, social and governance risks and opportunities will support our requirement to maximise returns.
Our environmental, social and governance (ESG) risk management policy is consistent with our obligations under the Future Fund Act 2006, our investment mandates, investment beliefs, investment strategy and international best practice. We seek to provide a prudent and robust approach that is aligned to our overall objective.
We focus on those ESG factors that have the potential to materially impact the performance of our investment portfolio and/or our reputation. Relevant ESG factors vary by industry and across asset classes, but can include any of the following: occupational safety, human and labour rights, climate change, sustainable supply chain, corruption and bribery.
We focus on understanding the full spectrum of future risks and opportunities to which our portfolio is exposed, and invest accordingly.
Our approach, outlined in our ESG risk management policy, includes the evaluation of ESG factors in direct investments and integration of ESG into the process for selecting the external investment managers responsible for individual investment decisions.
We exercise the ownership rights associated with our investments according to our corporate governance voting principles. We also engage with key investee entities, either directly or in partnership with our investment managers, to promote enhanced ESG performance and establish a climate of long term asset stewardship.
Our ESG risk management policy provides a framework which helps us to determine what entities and sectors are excluded from the investment portfolio for non-financial reasons.
In line with this, we have excluded entities on the basis of Australia’s international convention commitments or direct involvement in the manufacture of tobacco products.
View the list the list of companies excluded from our portfolio.
Further information about how we integrate ESG risks and opportunities into the portfolio is available in our Annual Reports, and in our ESG risk management policy, contained within our in our Statement of Investment Policies.