VicSuper Socially Conscious Investment Option

Product Name

VicSuper Socially Conscious Investment Option

Issuer

VicSuper

Category

Superannuation

Type

Superfund/Pension

Target

Retail

Certified Since

2016

Asset Classes

Diversified / Multi-asset

Markets

Australia

Investment Approaches

Negative Screening, ESG Integration

It Includes:

    It has some level of screening for:

    • Riaa icons 41 Alcohol
    • Riaa icons 36 Armaments
    • Riaa icons 33 Fossil fuels
    • Riaa icons 42 Gambling
    • Riaa icons 45 Genetic engineering
    • Riaa icons 50 Nuclear power
    • Riaa icons 99 Pornography
    • Riaa icons 35 Tobacco

    It fully excludes:

    • Riaa icons 52 Human rights abuses

    Overview

    VicSuper’s Socially Conscious investment option incorporates a wide range of explicit social and environmental objectives and it aims to help our members: • take action on climate change by not investing in companies that hold fossil fuel reserves used for energy purposes; • minimise social harm by not investing in companies that are materially involved in activities that potentially cause social harm, for example tobacco production, alcohol, gambling, military weapons, civilian firearms, nuclear power, adult entertainment and genetically modified organisms; • protect human rights, labour rights and the environment by not investing in companies that have been involved in severe incidents and/or controversies, or have been found not to be adhering to widely accepted global conventions. Investment risk may be slightly higher for the Socially Conscious investment option because the portfolio is not as well diversified and has fewer underlying investment managers compared to our standard investment options. Investment risk may also be higher due to the exclusion of specific industries including fossil fuels, alcohol and gambling. Notwithstanding, its investment universe is sufficiently diverse to avoid inadequate diversification.


    Description


    The objectives are achieved by applying a number of exclusionary screens when selecting companies for investment. These exclusionary screens only apply to the equities and fixed interest components of the investment option. Investments across the other asset classes apply an ESG integration approach, with the exception of Cash, which is not subject to ESG integration.

    Take action on climate change
    Excludes investment in companies:
    • with coal, oil and/or gas reserves used for energy purposes.
    • deriving 30% or more revenue from mining of thermal coal or thermal coal based power generation.
    • whose principal business revenue is derived from direct fossil fuel activity in the following GICS2 sectors: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Equipment & Services1,3

    Minimalise social harm
    Excludes investment in companies materially involved in:
    • Tobacco • Alcohol • Gambling • Civilian Firearms • Military Weapons (cluster munitions, landmines, depleted uranium, biological/chemical, nuclear, conventional)
    • Nuclear Power • Adult Entertainment • Genetically Modified Organisms

    Protect human and labour rights and the environment
    Excludes companies that have been found not to be adhering to international norms represented by the UN Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the UN Global Compact.
    Excludes companies that have been involved in significant5 ESG controversies.

    After applying the exclusionary screens a best-in-class selection process is applied to the remaining equities in the selection universe.

    The fixed interest component of VicSuper’s Socially Conscious investment option invests in a range of securities. For Australian fixed interest, where the option invests in company issued securities, VicSuperis invested in an ESG Australian bond index fund. For international fixed interest, VicSuper is invested in an ESG Global bond index fund. Both funds implement customised indices. The ESG Australian bond index fund uses a Bloomberg Barclays MSCI Australian Socially Responsible (SRI) and ESG-weighted Index. The ESG Global bond index fund uses a Bloomberg Barclays MSCI Global Aggregate SRI Select ex-Fossil Fuels Index. Both apply very similar exclusions those applied to equities investment including non-government securities associated with fossil fuels, alcohol, tobacco, gambling, adult entertainment, genetically modified organisms, military weapons, civilian firearms and nuclear power, as well as companies with an MSCI controversies score of 0. In addition, ESGOBI excludes Treasury and Government-related issuers with an MSCI ESG Government rating below BB. 


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