Respect of ESG Matters
Our members come from all walks of life and from every facet of the legal community.
We therefore provide our members access to a wide range of investment options with different asset allocation and return objectives.
The Board has adopted investment beliefs which guide how we invest on behalf of our members. These investment beliefs include the following belief in respect of ESG matters:
"We believe that environmental (including climate change), social and governance opportunities and risks exist and should be taken into consideration to the extent we can practically do so and within the context of optimising net risk-adjusted returns."
The Board has approved the exclusion of tobacco stocks from directly held Australian share portfolios.
legalsuper has recently awarded two investment mandates to managers exhibiting strong ESG conviction.
Alliance Bernstein (AB) has multiple ESG focus areas. Central to these is a portfolio risk identification framework developed to understand the extent of modern slavery risk within portfolios, as well as within the supply chains of those companies it holds.
In recognition of its ongoing work to combat modern slavery and human trafficking, AB was honoured with the Combating Modern Slavery Award at the 2021 Themis AFC Awards.
In addition, AB is very active as an advocate for climate change and has formed an ongoing relationship with Columbia University’s Earth Institute to create and deliver climate risk training to internal AB investors and stakeholders.
Using the Task Force on Climate-related Financial Disclosures (TCFD) framework, the team conducts scenario analysis on how Australian companies could be affected by climate change. AB is working to understand, assimilate and, over time improve climate scenario analysis and investment decision-making.
Aikya uses specialised proprietary criteria to assess the quality of stewardship of companies. This starts with obtaining a clear understanding of the purpose of a business, followed by analysis of its environmental, social and governance track record, and concludes with a process to investigate and understand organisation-wide culture.
Aikya actively avoids companies where the business has a negative social utility (tobacco, gambling, fossil fuels, munitions), or where companies are forced to inflict significant damage to environment and communities in order to serve their purpose. Sustainability issues are investigated with the same level of detail as the financial metrices of a company.
As ESG data on a business is not standardised and can often be open to interpretation, Aikya has developed its own industry specific detailed maps combining various sustainability reporting standards such as Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and the United Nations Sustainable Development Goals (UN SDG), through which it compares various companies within an industry and across the entire industry value chain.
Aikya has an active engagement agenda with all its portfolio holdings.