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AMP Capital Investors

PRI reporting framework 2019

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Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

AMP Capital's ESG objectives are contained in our ESG and responsible investment philosophy. The document is publicly available at www.ampcapital.com/esg . Progress against these objectives is monitored by the AMP Capital Investment Committee.

Additional ESG objectives and/or strategic initiatives may be pursued by our key business divisions (e.g. Global Equities and Fixed Income, Real Estate and Infrastructure). These reflect our ESG priorities for a particular asset class and/or investment style. Progress against these objectives is usually reported to senior divisional management, and may also be featured in individual performance management plans and/or AMP Capital's business scorecard metrics.


SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          Further increase communication and engagement to raise awareness of ESG issues across AMP Capital
        

Progress achieved

Includes:

Key performance indicator

          Complete the full implementation of AMP Capital's new ethical decision-making framework
        

Progress achieved

Under the new AMP Capital ethical decision-making framework introduced in March 2017, companies or sectors may be excluded from our portfolio on ethical grounds. It was decided that manufacturers of tobacco, cluster munitions, landmines, biological and chemical weapons do not meet our new minimum ethical standards. This decision triggered one of the largest divestments of tobacco manufacturing securities by an investment manager in Australia, including approximately $440 million of equity and fixed income holdings and $130 million of investment in cluster munitions and landmines manufacturers.   

The new framework complements AMP Capital’s existing approach to addressing ESG investment risks by helping to resolve complex ethical issues as they arise. It also reflects the changing attitudes of our clients, who increasingly do not want to be invested in harmful products. 

These policy changes were publicly announced on 16 March 2017 following approvals by the Board of AMP Capital Holdings Limited and implementation of the changes commenced during 2017. 

In September 2018, AMP Capital announced the completion of the full implementation of the Ethical Framework and became a signatory and supporter of the Tobacco-Free Finance Pledge at the UN General Assembly in New York. 

Further details available at 

 

Financial performance of investments

Key performance indicator

          Understand greenhouse gas emissions profile of AMP Capital's equity and fixed income portfolios in order to better understand investment risk and impact of emissions.
        

Progress achieved

In 2017 AMP Capital commenced disclosing its carbon footprinting analysis for its flagship Australian and (externally managed) international equity funds. As part of this process AMP Capital measured kilograms of CO2e per thousand dollars of money invested in the fund, for the latest financial year and considered both operational and equity exposure. AMP Capital also calculated the emissions of the relevant Investment Index against which the fund's financial performance is typically assessed, e.g. ASX200 Index for Australian Equity Funds. Comparing the fund against the benchmark provides an indication of whether the fund is less, or more, exposed to greenhouse gas emissions.

In 2018 AMP Capital further expanded the carbon footprinting analysis having developed new methodologies for listed property (GREITs), listed infrastructure and corporate fixed income funds.The carbon footprint of these funds is now progressively published (disclosed) on relevant fund pages at www.ampcapital.com.au and will continue to be updated on an annual basis.

ESG characteristics of investments

Key performance indicator

          Undertake ESG Performance benchmarking for real assets including AMP Capital's flagship Real Estate and Infrastructure Funds.
        

Progress achieved

Within our real asset portfolios, AMP Capital continues to strengthen ESG strategies for its flagship property and infrastructure funds and their underlying assets.

To monitor ESG performance AMP Capital participates annually in the GRESB rankings, an ESG benchmarking assessment for real assets globally.

In 2018 three of AMP Capital’s eligible infrastructure funds again placed in the top ten global rankings, with each fund also rated in the top five within its sector peer group.

AMP Capital's flagship real estate funds, also scored more than 80% in the GRESB ratings and were awarded five Green Stars - the highest rating awarded.

Key performance indicator

          Sustainable Real Estate Strategy
        

Progress achieved

In 2017 AMP Capital made a commitment to make one of our flagship commercial office funds Net Zero Carbon by 2030 and committed to at least 100% of the annual Scope 1 and Scope 2 Greenhouse Gas emissions associated with the assets’ base building services to be either reduced, avoided or offset by 2030.

In September 2018, this commitment was reaffirmed with the fund becoming a founding signatory of the World Green Building Council’s Net Zero Carbon Buildings Commitment announced at the Global Climate Action Summit in San Francisco . The fund was one of 7 Australian Real Estate entitites to make this commitment out of just 12 compan globally. At the same time 22 cities and 4 states and regions also made this commitment. Further detail can be found here: http://www.worldgbc.org/news-media/WorldGBC-Launches-Net-Zero-Carbon-Buildings-Commitment. Similar targets a are under consideration for other funds.

Our real estate division also completed a portfolio wide evaluation of climate change risk and resilience by market sector and for each asset using IPCC extreme Representative Concentration Pathway.  This information is being used to develop our long-term asset management plans and asset specific climate change risk assessments as well as climate change due diligence assessments for future transactions.

Other activities

Key performance indicator

          Climate Action 100+ (CA100+) is a 5-year collaborative investor engagement focused on the world's largest corporate emitters of greenhouse gases.
        

Progress achieved

Climate Action 100+ is an investor initiative established to engage with the world’s largest corporate greenhouse gas emitters on climate change. It includes more than 320 investors with over $33 trillion in assets under management. 

Launched in December 2017, Climate Action 100+ is coordinated by five partner organisations: Asia Investor Group on Climate Change (AIGCC); Ceres; Investor Group on Climate Change (IGCC); Institutional Investors Group on Climate Change (IIGCC) and Principles for Responsible Investment (PRI). 

CA100+ aims to engage with companies on improving their governance on climate change, reducing emissions and improving climate-related financial disclosures. The global companies include 100 ‘systemically important emitters’, accounting for two-thirds of annual global industrial emissions.

AMP Capital, through its ESG capability regularly engages with companies across a range of industry sectors on their approaches to managing a range of ESG risks including climate change. AMP Capital is involved in the CA100+ initiative in Australia and leading the CA100+ investor engagement with two large Australian companies.

Further details at http://www.climateaction100.org/

Key performance indicator

          AMP Capital is a co-founding signatory of the Tobacco-Free Finance Pledge
        

Progress achieved

The Tobacco-Free Finance Pledge is an initiative of Tobacco Free Portfolios and developed in collaboration with UNEP FI, PRI, PSI AXA, BNP Paribas, Natixis and AMP Capital

https://www.unepfi.org/psi/tobacco-free-finance/

The objectives of the Tobacco-Free Finance Pledge are to:

  • Highlight the leadership of financial institutions that have implemented tobacco-free finance policies and encourage others to follow suit.
  • Encourage the finance sector to play an active role in addressing global priorities, as outlined in the United Nations’ Sustainable Development Goals, including SDG 3 Health and Well-Being and SDG 17 Partnerships for the Goals, in addition to the World Health Organization Framework Convention on Tobacco Control.
  • Raise awareness among financial institutions of the essential role the finance sector must play to assist effective tobacco control and to ensure a tobacco-free world.
  • De-normalise financial and corporate associations with tobacco companies.
  • Encourage financial institutions to reflect on and reconsider their business relationships with the tobacco industry in light of the global tobacco epidemic.
  • Encourage the transition towards tobacco-free finance policies.
  • Prioritise tobacco on the corporate agenda as a product and industry distinct from any other with no safe level of use and no opportunity for effective engagement.

Further details https://www.ampcapital.com/au/en/media/articles/2018/September/amp-capital-divests-from-tobacco-securities-worth-a-440-million

 

06.2. Additional information.

Additional ESG objectives and/or strategic initiatives may be pursued by our key business divisions (e.g. Global Equities and Fixed Income, Real Estate and Infrastructure). These reflect our ESG priorities for a particular asset class and/or investment style. Progress against these objectives is reported to senior divisional management, and may also be recorded in individual performance management plans and AMP Capital's business scorecard metrics.


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