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Local Government Superannuation Scheme

PRI reporting framework 2017

You are in Strategy and Governance » Implementation not in other modules

Implementation not in other modules

SG 12. ESG issues in strategic asset allocation

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

12.1. Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated.

12.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

12.3. Additional information. [OPTIONAL]

As per LGS Investment Restrictions, the fund will not make investments in companis that derive any revenues from controversial weapons (land mines, cluster bombs and nuclear weapons) and tobacco.

LGS will not make investments in companies that derive 10% of more of their revenues in armaments, gambling and old growth logging.

The fund will not make investment in companies that exhibit the following characteristics: - 

i) high ESG risk

ii) high carbon sensitive companies i.e. companies that derive one third of their revenue from coal mining, oil tar sands and coal fired electricity utilities.

Whilst these restrictions formally cover listed Australian and international equities , where possible LGS will endeavour to extend these restrictions across other asset classes including fixed income, credit and unlisted assets.

 


SG 13. Long term investment risks and opportunity (Not Completed)


SG 14. Allocation of assets to environmental and social themed areas

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

14.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

14.2. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

0.19 % of AUM

Brief description and measures of investment

Listed equity: Allocation to specific mandate to invest in companies generating at least 50% of revenues or deploying at least 50% of capital to the environmental sector (renewable energy, water treatments, waste and resource management, efficiency).

Fixed income - SSA: Allocation to Green or Climate Bonds issued by Supranational Agencies such as the IFC and European Investment Bank.

Private equity: Two mandates in a well-diversified 'clean technology' private equity 'fund-of-fund' investing in early stage and growth technologies in the area of environmental, resource and low carbon products and services.

Property: We purchase 100% GreenPower for all base building electricity requirements across our portfolio. We have also installed solar panel arrays at 4 of our properties, with plans to expand this where feasible.

Infrastructure: A small component of our infrastructure assets is invested in wind farms and hydro-electricity.

Hedge funds: LGS has allocated investment to a fund that invests in the Australian electricity wholesale market and related derivatives including renewable energy certificates and/or any other environmental related markets. The purpose of the fund is to increase our knowledge of the electricity markets and act as a form of hedge against rising power prices which may occur due to extreme weather events.

4.47 % of AUM

Brief description and measures of investment

LGS manages its property portfolio internally. It comprises 8 properties, a mixture of 3 retail centres, 4 commercial and 1 industrial property. Since 2007, LGS' entire direct property portfolio has undergone significant green refurbishments and fit outs aimed to improve the efficiency and attractiveness of the property portfolio, with most of the work focusing on lighting, air conditioning and introducing innovative technologies. More details on LGS efforts in direct property are detailed elsewhere in this PRI report as well as at: -

https://www.lgsuper.com.au/investments/how-we-invest-your-money/property-portfolio/

LGS has reduced its energy consumption in its property portfolio by more than 42% since 2009. Water consumption has reduced by 52% since 2009. The entire portfolio is rated 6 star NABERS Energy (the highest building energy rating in Australia) and the Global Real Estate Sustainability Benchmark (GRESB) survey has rated LGS's portfolio 5 stars - the highest attainable rating.

0.4 % of AUM

Brief description and measures of investment

Infrastructure: One of our infrastructure mandates is for community infrastructure, including owning and operating schools and hospitals across Australia.

0.01 % of AUM

Brief description and measures of investment

Listed equity: Allocation to specific mandate to invest in companies generating at least 50% of revenues or deploying at least 50% of capital to the environmental sector (renewable energy, water treatment, waste and resource management, efficiency).

          Waste and pollution control
        
0.01 % of AUM

Brief description and measures of investment

Listed equity: Allocation to specific mandate to invest in companies generating at least 50% of revenues or deploying at least 50% of capital to the environmental sector (renewable energy, water treatments, waste and resource management, efficiency).

14.3. Additional Information [Optional]

          
        

SG 15. ESG issues for internally managed assets not reported in framework (Not Applicable)


SG 16. ESG issues for externally managed assets not reported in framework (Not Completed)


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