How are labour standards and environmental, social or ethical considerations taken into account?
The Trustee invests the assets of the APSS with the aim of achieving the best financial outcomes for members, whilst keeping risks within acceptable levels and adhering to the laws and regulations across all jurisdictions in which investments are held.
The Trustee believes that labour standards and environmental, social or ethical considerations (commonly referred to as 'environmental, social and governance', or 'ESG' factors), have the potential to affect the long-term financial value of the APSS’s investments. These factors include, but are not limited to the financial risks created by climate change, the use of natural resources, cyber security, human rights, responsible labour practices, workplace health and safety and employee relations. Inadequate management of ESG risks may result in regulatory penalties, brand and reputational damage, asset damage or loss of revenue, any of which can undercut investment outcomes.
A proper regard for the environmental or social practices and proper governance of the entities in which the APSS invests is therefore part of the responsible management of the financial interests of our members.
The Trustee invests the assets of the APSS by appointing investment managers or investing in managed funds. Therefore, to give effect to the management of ESG risks and ensure appropriate monitoring and review of ESG factors, the Trustee’s Investment Committee will, on an ongoing basis, assess and monitor its appointed investment and fund managers on the extent to which they integrate ESG considerations into their investment decisions.
The Trustee does not prescribe how its investment managers or managed funds should apply ESG considerations but it has a preference for managers that maintain and apply policies and frameworks that consider ESG factors as part of investment decisions. Specific ESG methods – and the type of actions taken if an investment no longer meets a manager's ESG policy – are applied according to the managers’ discretion, as appropriate for each investment. Managers that do not apply ESG considerations may still be appointed or retained by the APSS provided that the risk to the APSS is not material and is proportionate to the expected financial outcome.
Excluded Investments
The Trustee has elected to restrict its public market equity investment managers from investing in the shares of companies that produce tobacco products. Where the APSS invests in pooled funds managed by third parties, the exclusion on shares of tobacco-producing companies does not apply, as the investment rules of those funds are determined by their management companies.
1300 360 373
1300 360 373
