We integrate ESG considerations into investment decisions and undertake stewardship activities to support long term outcomes.
Funds SA defines responsible investment as a financial outcomes focused approach that complements traditional investment analysis through Environmental, Social and Governance (ESG) integration and stewardship.As part of investment due diligence process, Funds SA explicitly considers ESG issues and opportunities in investment analysis and decision making, through the activities of our external managers and across our total portfolio. Funds SA requires investment managers to provide information on their ESG processes to establish how each investment manager:
- incorporates the assessment of ESG risks into due diligence activities,
- integrates ESG considerations into investment decision making, and
- monitors ESG risks within the portfolio.
Investment Stewardship is the responsible oversight and management of investments. It is an important component of Funds SA’s approach to responsible investment and focuses on Funds SA’s responsibility to take actions that protect and create long-term value for its clients. Funds SA does this through various means including proxy voting, engagements, and class actions.
Our Responsible Investment Policy outlines how our responsible investment program is implemented in line with the objectives of the Superannuation Funds Management Corporation of South Australian Act 1995. Funds SA is also a signatory to the UN-supported Principles for Responsible Investment.
Socially Responsible Investment Option
In our Socially Responsible investment option, underlying investment managers actively incorporate the consideration of ESG factors in their investment decisions. The option invests in line with socially responsible investment criteria established by Funds SA, which includes a focus on renewable energy and social infrastructure, restrictions on investments in areas of high negative social impact and a ‘best-in-class’ approach to target the best companies in each economic sector according to external ESG ratings. The strategy is implemented by engaging external investment managers to provide investors with exposure to a portfolio of diversified asset classes, with an emphasis on growth assets (such as shares and property).
Funds SA recognises that climate change presents a systemic risk impacting potential investment returns over the coming decades. Across the globe economies are decarbonising, and this brings significant risk and opportunity for investors. Our Climate Change Position Statement outlines our approach to addressing climate change risks in line with the objectives of the Superannuation Funds Management Corporation of South Australian Act 1995.