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Responsible ownership

Actions we take today should not compromise the outcomes received by investors tomorrow

We recognise that we must be increasingly mindful of the footprint our investments make in markets, communities and on the environment.

We believe that poor management of long-term environmental, social and governance (ESG) related risks by a company not only impact our investments but can potentially harm the broader community and environment as well.

We require management to be focused on long-term and sustainable value creation.

Responsible ownership is an approach to investing that explicitly incorporates consideration of ESG issues into investment decisions to better manage risk and generate strong long-term returns.

Our approach to responsible ownership

As stewards of our clients’ retirement savings, we have a duty to act in their best interests and to protect and grow the real value of their assets.

A critical part of this is a responsibility to monitor and engage with companies in which we invest, directly and through the fund managers we appoint. We also use our ownership rights to vote at company annual general meetings (AGMs).

Perhaps most importantly, we have an obligation to ensure that the companies we invest in on behalf of clients are governed in a way that will enhance their performance over the longer term.

We believe that good governance is essential to being able to generate the best financial outcome for clients. We generally support boards that have a majority of independent directors and that contain a diverse set of experience and skills appropriate to the business.

Additionally, we take an interest in the environmental and social practices of the listed companies in which we invest. We believe companies that take a sustainable approach to the environment and to the community, including their own workforce, will perform better over the long term.

Responsible ownership

Responsible ownership describes an investment process that incorporates an active consideration of environmental, social and corporate governance (ESG) factors (also referred to as sustainability considerations) within investment decision-making and ownership practices.

It's driven by the growing recognition among investors that responsible corporate behaviour can have a positive influence on the financial performance of companies, particularly over the long term.

It follows that investors who are aware of ESG-related factors that affect investment performance are better placed to manage risk and generate value.

ESG/sustainability refers to a range of factors associated with the long-term financial performance of companies, including:

  • Corporate structures that reduce agency risk (corporate governance), and
  • Appropriate oversight and management of risks that may result in costs or constraints on the company’s operations, and opportunities associated with superior management of these risks (environmental and social)

ESG/sustainability factors range from board skills and independence to vulnerability with respect to carbon costs or regulatory constraints, human capital management practices and stakeholder relations.

Engagement with companies we invest in

An important part of responsible ownership is engaging with the companies we invest in so that they understand who we are and what’s in our clients’ best interests.

As part of this engagement, we communicate with companies to achieve improvements in corporate governance or address underperformance in areas like environmental or social outcomes.

Engagement also includes communication with government regulators to improve the standards that apply to all companies – for instance in taxation law, and the law affecting directors’ duties and financial reporting.

Our engagement program works on several levels. We:

  • engage directly with the companies and with fund managers
  • participate in collaborative initiatives with other institutional investors, and
  • work in conjunction with a specialist corporate engagement firms.

ACSI – Australian Council of Superannuation Investors. ACSI engages with major listed Australian companies on ESG issues, provides research, policy and voting advice, and interacts with the regulators to ensure markets are focused on the long-term benefits of investors. Refer to ACSI's website for more information.

Hermes EOS helps long-term institutional investors around the world meet their fiduciary responsibilities and become active owners of international public companies. Their team of engagement and voting specialists monitors the investments of our clients in global companies and intervenes where necessary with the aim of improving performance and sustainability.

 

You can access our Responsible Investment policy here.



As an asset owner, we believe we have an obligation to seek to ensure that the companies and other assets in which we invest in are governed and managed in an appropriate way that will enhance performance over the longer term, and thereby produce the best financial outcome for clients. This is why we take an active interest in the ESG practices of the companies and assets in which we invest, and seek to exert influence on their governance, policies, practices and management through share voting, engagement and advocacy.

We have a significant exposure to listed share investments. Exercising the voting rights attached to shares held in public companies is something we regard as being integral to active ownership. Share voting is an important tool for engaging with companies. Voting is an effective way for the Trustee and other investors to publicly express its views on what a company is doing right, and what a company needs to improve.

Section 4.2 of our Responsible Investment: Environmental, Social & Corporate Governance Policy sets out our proxy voting policy.



The following information provides summaries of voting activity undertaken during the period 1 July 2019 to 30 September 2019.

We are able to support a proposal by voting ‘For’, against a proposal by voting ‘Against’ or choose not to vote either for or against by ‘Abstaining’.

Table 1: Summary of Voting for Period
Proxy Voting Details Number of Resolutions % of Total Resolutions
Total Resolutions 431
Total Votes "For" 370 86%
Total Votes "Against" 26 6%
Total Votes "Abstained" 13 3%
Total "Split" Votes 16 4%
Total "No Votes" / "Withheld" 5 1%

Remuneration Reports include the specific compensation outcomes for companies where changes require shareholder approval. The table below includes outcomes of votes on Remuneration Reports.

Table 2: Summary of Voting on Remuneration Reports
Proxy Voting Details Number of Resolutions % of Total Remuneration Resolutions
Total Remuneration Reports 36
Total Votes "For" 30 83%

Companies typically raise proposals to be resolved through proxy voting. On occasion, shareholders may bring proposals to be voted upon. The table below contains a summary of shareholder proposals for the period 1 July 2019 to 30 September 2019.

Table 3: Summary of Voting on Shareholder Raised Resolutions
Proxy Voting Details Number of Resolutions % of Total Remuneration Resolutions
Total Resolutions 3
Total Votes "For" 0 0%

Download PDF: Proxy Voting 2019



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