Mercer Socially Responsible Australian Shares Fund

Product Name

Mercer Socially Responsible Australian Shares Fund

Issuer

 Mercer Investments (Australia) Limited

Category

Investment

Type

Fund or Trust

Target

Retail, Wholesale, Institutional

Certified Since

2018

Asset Classes

Australian only equities

Markets

Australia

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 energy efficiency
  • Riaa icons 15 Social and sustainable infrastructure
  • Tree green background Sustainable land and agricultural management
  • Investment2 More sustainable companies

It has some level of screening for:

  • Riaa icons 33 Fossil fuels
  • Riaa icons 99 Pornography

It fully excludes:

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

Overview

The Mercer Socially Responsible Australian Shares Fund provides exposure to Australian shares using a socially responsible and multi-manager approach. The investment managers for the Fund must take into account Mercer’s commitment to sustainable investing and active ownership through ESG integration, proxy voting and engagement in their investment decision making process and must not invest in companies excluded by the Fund (see below for more information). The Fund is also designed to achieve a carbon intensity that is 20% below the carbon intensity of the benchmark, as measured annually. 


Description

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 an ageing population, climate change and human rights.

Mercer believes a sustainable investment approach is more likely to create and preserve long-term investment capital and more specifically that:
  • 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.
  • 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.
  • 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.
  • 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.  Therefore, proxy voting and engagement around material ESG issues are incorporated throughout our investment decision making and ownership practices.
This combined approach to the integration of ESG considerations and investment stewardship is captured at Mercer as a sustainable investment approach. 

Environmental, Social and Governance (ESG) factors 
The investment managers we appoint are encouraged to consider ESG factors, such as those listed below, when assessing investment risk and opportunities, as relevant to the type of investment.
• Climate change
• Water 
• Waste and pollution 
• Biodiversity
• Health and safety
• Labour standards (including in the supply chain)
• Human rights and community impacts 
• Demographics / consumption
• Board structure, diversity and independence
• Remuneration that is aligned with performance 
• Accounting and audit quality 
• Anti-bribery and corruption

The investment managers we select are required to exclude investments in the following companies: 
  • Tobacco - 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.
  • Controversial weapons: 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 semi-automatic civilian firearms. 
  • With a material exposure* to:
    • Alcohol production
    • Carbon intensive fossil fuels (defined as thermal coal and tar sands)
    • Gambling
    • Pornography
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% or more of a company's revenue in the last financial year. 
 
The Fund is also designed to achieve a carbon intensity that is 20% below the carbon intensity of the benchmark as measured annually.






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