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Our journey to become a more responsible investor began in in 2015 with work that led to our Responsible Investment Framework. This has evolved and continues today with the renewal of our commitment in our Responsible Investment Policy. We continue to work towards providing you with the means for sustainable, long-term wealth protection and enhancement.


November 2016

Responsible Investment Framework


April 2017

Signed UN Principles of Responsible Investment


July 2017

Investment manager and customer surveys


May 2018

Launched alliance offering with Affirmative Investment Management


October 2018

Signed Tobacco-Free Finance Pledge


December 2018

Commitment to divest tobacco and controversial weapons producers


February 2019

Controversial weapons collaboration – letter to index providers


April 2019

Report to Principles of Responsible Investment


October 2019

Launched Global Stewardship fund with partner Baillie Gifford

December 2019

Fully divested from tobacco producers and controversial weapons manufacturers

April 2020

Report to Principles for Responsible Investment

May 2020

Signed PRI collaboration – Investor Statement on Coronavirus Response

 

June 2020

Became a member to Investor Group on Climate Change


August 2020

Assessment report from Principles for Responsible Investment

Member survey

In November 2016 we published our Colonial First State Responsible Investing Framework. In the Framework we make a number of Responsible Investment (RI) commitments, one of which is to “understand customer and client environmental, social and governance (ESG) needs”.


In light of this commitment, we have conducted research in order to gauge our members′ understanding of Responsible Investment – what the term means, what ethical issues are most important to members and the perceived impact if Colonial First State was to adopt a responsible investment strategy.


Perhaps not surprisingly, not all of you interpret the term ‘Responsible Investing’ the same way. Although the majority (69%) of respondents associated ‘Responsible Investing′ with fund performance and ensuring that returns are maximised and risk is minimised, on further questioning only 1 in 3 associated the term with ethical and/or environmentally conscious investments.

Top priorities for our members

70%

want no child labour

66%

want no cluster munitions, landmines or nuclear weapons

60%

want no tobacco producers

55%

want no animal testing

50%

want no gambling or deforestation

Manager survey

We also asked our investment managers questions around their consideration of ESG factors in conjunction with the range of other risks and opportunities that may affect the long-term investment outcomes. This informs our view when researching and selecting investment strategies, partnering with investment managers, undertaking portfolio construction and allocating assets.


The results of the survey showed that 90% of our managers said they were incorporating or considering ESG factors in some way, although it also illustrated the wide divergence in responses between global and local managers, and between boutiques and large institutional managers. It probably comes as no surprise that the larger global managers are leading the integration of responsible investing practices mainly due to their resourcing and influence.


One of the key takeaways from the survey was that less than half the investment managers surveyed were considering climate change to be a risk to their investments and only 18% were measuring the carbon footprint of our portfolios at the time. Thinking on climate change has evolved drastically in just a few years and so we intend to survey our managers again to see what the current state of thinking is.

Manager survey Key points

99%

response rate (72 out of 73 managers)

90%

are integrating ESG into their investment process

<20%

are measuring carbon footprint of portfolios

45%

believe climate change is an investment risk

Disclaimer

Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (Colonial First State) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. Colonial First State also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from colonialfirststate.com.au or by calling us on 13 13 36.