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First State Superannuation Scheme

PRI reporting framework 2017

You are in Indirect – Manager Selection, Appointment and Monitoring » Overview

Overview

SAM 01. Role of investment consultants/fiduciary managers

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation uses investment consultants and/or fiduciary managers.

01.2. Indicate how your organisation uses investment consultants in the selection, appointment and/or monitoring of external managers.

Asset class

Asset class

01.3. Indicate if your organisation considers responsible investment in the selection, appointment and/or review processes for investment consultants.

01.7. Additional information [Optional].


SAM 02. RI factors in selection, appointment and monitoring across asset classes

02.1. Indicate for which of the following externally managed asset classes your organisation, and/or your investment consultants, consider responsible investment factors in investment manager: (a) Selection, (b) Appointment (investment management agreements/contracts), and (c) Monitoring

Select all that apply

Asset classes

(a) Selection

(b) Appointment

(c) Monitoring

Listed equity

Fixed income - SSA
Fixed income - Corporate (financial)
Fixed income - Corporate (non-financial)

02.2. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

Our asset consultant, Willis Towers Watson, helped us develop a questionnaire for new and existing managers to assess their responsible investment attitude and capabilities. Through this process Willis Towers Watson is fully aware of our position on responsible investment, and although they won't screen out or positively recommend a manager on this basis, they are aware of what is important to us and will frame their recommendation accordingly. Willis Towers Watson has been involved in our manager selection for our socially responsible option and throughout this process only recommended those with a known solid track record in the E, S, and G space.

Once a manager has been recommended a RFP is sent to the manager which contains a section on high level questions relating to E,S and G. Further down the due diligence process we then send a second E,S,G questionnaire, which is much more detailed and asks managers about their philosophy on responsible investment, how they integrate it, their capacity to integrate it and their alignment with our views on responsible investment. This questionnaire is used internally to rank and score managers so that the investment team is aware of how their manager is performing both in terms of financial return but also from an E, S or G perspective. It is envisioned that we will correlate financial performance with E, S and G performance to form an idea of how they affect one another- this however will only be possible once enough data is collected. The responses to the questionnaire are also used as a tool for engagement with the manager. The engagement that we have with a manager at the beginning serves us later on in the monitoring phase such that if in our internal screening process we find a company that scores poorly on an E, S, or G issue we can approach our managers to engage with the company, or if bad enough, to consider dropping from their portfolio.

When appointing managers, we also ensure proxy voting is included in the contract. Thus through proxy voting season we are in contact with our managers daily with regards to mostly governance concerns of a company. This regular contact ensures that our position on responsible investment is reinforced.  We are reviewing our IMAs at the moment to enhance our RI aproach and include reporting on engagement activities.

Every two years we send out our ESG questionnaire to existing managers so that even if they filled it out on appointment we can re-score them to see if they have improved or fallen behind. We use these scores as a basis for internal ranking and if necessary for further engagement on responsible investment issues.

02.3. Additional information. [Optional]


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