Mercer Socially Responsible Australian Shares Fund

Product Name

Mercer Socially Responsible Australian Shares Fund


Mercer Investments (Australia) Limited




Fund or Trust


Retail, Wholesale, Institutional

Certified Since


Asset Classes

Australian only equities



Investment Approaches

Negative Screening, ESG Integration

It Includes:

  • Riaa icons 14 Education
  • Riaa icons 32 Green property
  • Riaa icons 12 Healthcare and medical products
  • Riaa icons 11 Impact investments
  • Riaa icons 10 Renewable energy and climate change solutions
  • Riaa icons 15 Social and sustainable infrastructure
  • Tree green background Sustainable land and agricultural management
  • Investment2 More sustainable companies

It fully excludes:

  • Riaa icons 41 Alcohol
  • Riaa icons 36 Armaments
  • Riaa icons 33 Fossil fuels
  • Riaa icons 42 Gambling
  • Riaa icons 99 Pornography
  • Riaa icons 35 Tobacco


Sustainable investment and ESG considerations, including labour standards We build sustainability principles into our investment portfolios to help protect and enhance the value of the Funds’ investments. We look beyond traditional financial factors to consider the potential investment impacts of corporate governance, as well as environmental and social issues – such as labour standards, an ageingpopulation, energy and resource constraints and climate change. Mercer believes a sustainable investment approach is more likely to create and preserve long-term investment capital and more specifically that: 1. Environmental, Social and Corporate Governance (ESG) factors, including labour standards, can have a material impact on long term risk and return outcomes and these should be integrated into the investment process. 2. Taking a broader perspective on risk, including identifying longer-term sustainability themes and trends, is likely to lead to improved risk management and new investment opportunities. 3. Climate change poses a systemic risk and investors should consider the potential financial impacts of both the associated transition to a low-carbon economy and the physical impacts. 4. Active ownership (or stewardship) helps the realisation of long-term value by providing investors with an opportunity to enhance the value of companies and markets. 5. Accessing long-term streams of returns, rather than focusing on short-term price movements, can add value. This combined approach to the integration of ESG considerations and investment stewardship is captured at Mercer as a sustainable investment approach. Mercer believes that sustainable investment principles can be applied across all asset classes. The investment managers appointed to the Funds are: 1. Encouraged to consider ESG factors, such as those set out in the following table, in assessing investment risk and opportunities, as relevant to the type of investment, and 2. Required to exclude investments in companies that manufacture tobacco products and controversial weapons, as detailed below under Exclusion of tobacco and controversial weapons companies. ESG factors ENVIRONMENTAL - Climate change - Water - Waste and pollution - Biodiversity SOCIAL - Health and safety - Labour standards (including in the supply chain) - Human rights and community impacts - Demographics / consumption GOVERNANCE - Board structure, diversity and independence - Remuneration that is aligned with performance -Accounting and audit quality -Anti-bribery and corruption We also believe that principles of active ownership and investment stewardship are of value in the investment process. For that reason, proxy voting and engagement around material ESG issues are incorporated throughout our investment decision making and ownership practices, as documented in the Mercer Funds Sustainable Investment Policy (described below). In addition, the PDSs for the following Funds set out additional socially responsible considerations, including ethical issues, which are taken into account when making investment decisions for these Funds only: • Mercer Australian Socially Responsible Shares Fund. • Mercer Socially Responsible Global Shares Fund – Unhedged Units • Mercer Socially Responsible Global Shares Fund – Hedged Units. Exclusion of tobacco and controversial weapons manufacturers As a reflection and extension of our commitment to sustainable investment, the Responsible Entity excludes: Ÿ Companies involved in the manufacture and/or production of tobacco products (regardless of revenue), including subsidiaries and joint ventures, as well as any other company that derives 50% or more of revenue from other tobacco-related business activities such as packaging, distribution and retail of tobacco products. Ÿ Companies that manufacture whole weapons systems, or delivery platforms, or components that were developed or are significantly modified for exclusive use in cluster munitions, anti-personnel landmines, biological or chemical weapons, as well as companies involved in the production and retailing of automatic and semiautomatic civilian firearms. These exclusions apply to all Mercer Funds. Investment managers in most asset classes have fully implemented the exclusions, with some residual exposures under review. Mercer prefers an integration and engagementbased approach to sustainable investment and believes exclusions should be a last resort. Mercer has therefore developed an exclusions framework to govern the consideration and maintenance of all exclusions. The reasons to exclude are typically not one dimensional; rather there are likely to be a number of underlying factors that make continuing to include the product or activity in the investment universe untenable. These factors are likely to reflect a combination of beliefs, social impact, public policy, reputation, client expectations, ability to influence and portfolio impact. In the limited instances where exclusions are applied, Mercer will seek to use its influence with companies, regulators, governments and other standard setters to address the underlying issue of concern.


Mercer Australian Socially Responsible Shares Fund. 
ESG considerations, including labour standards, principles of sustainable investment and good corporate governance are incorporated throughout the Fund’s investment decision making and ownership practices.  The investment managers for this Fund must take into account:

  • The sector exclusion criteria shown below ;

  • The Fund’s total carbon intensity, given the risks associated with climate change; and

  • Mercer’s commitment to sustainable investing and good corporate governance through ESG integration, proxy voting and engagement in their investment decision making process. 

Sector exclusions
The Fund will not invest in companies with material exposure to:

  • Tobacco production

  • Alcohol production

  • Gambling or gaming services

  • Pornography

  • Carbon intensive fossil fuels, defined as thermal coal and tar sands oil

  • Armaments.

Material exposure is defined as 5% of revenue or greater in the last financial year, with the exception of carbon intensive fossil fuels where material exposure is defined as 20% of revenue or greater in the last financial year.

The Fund is designed to achieve a carbon intensity that is 20% below the carbon intensity of the benchmark, as measured annually.

Other products certified by the Responsible Investment Association Australasia (RIAA)

Mercer Socially Responsible Global Shares Fund -Hedged Units

Mercer Socially Responsible Global Shares Fund -Unhedged Units

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