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Australian Ethical Investment Ltd.

PRI reporting framework 2019

You are in Strategy and Governance » Asset class implementation not reported in other modules

Asset class implementation not reported in other modules

SG 16. ESG issues for internally managed assets not reported in framework

Describe how you address ESG issues for internally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Fixed income - Corporate (non-financial)

We only invest in line with our public Ethical Charter (www.australianethical.com.au/australian-ethical-charter). The 23 Charter principles guide us to investments which support people, animals and the environment (positive screening) and which do not cause them unnecessary harm (negative screening).

The consistent, rigorous application of our Charter principles defines a sustainable investment universe which we believe produces good outcomes for both the planet and the financial interests of our clients.

Our Ethical Charter requires us to assess the impacts on people, animals and the environment of the assets, products and services funded (including impacts from the way assets, products and services are produced, supplied, used and disposed of). This process draws on data and analysis from company, industry, government, responsible investment, scientific and civil society sources. This broad and deep research of short and long term social and environmental impacts of companies and sectors builds a more complete understanding of the prospects and risks of the companies and sectors in our universe. As well as defining a sustainable investment universe, this enables more impactful engagement with companies.

Refer also SG 01.5.

Fixed income - Securitised

We only invest in line with our public Ethical Charter (www.australianethical.com.au/australian-ethical-charter). The 23 Charter principles guide us to investments which support people, animals and the environment (positive screening) and which do not cause them unnecessary harm (negative screening).

The consistent, rigorous application of our Charter principles defines a sustainable investment universe which we believe produces good outcomes for both the planet and the financial interests of our clients.

Our Ethical Charter requires us to assess the impacts on people, animals and the environment of the assets, products and services funded (including impacts from the way assets, products and services are produced, supplied, used and disposed of). This process draws on data and analysis from company, industry, government, responsible investment, scientific and civil society sources. This broad and deep research of short and long term social and environmental impacts of companies and sectors builds a more complete understanding of the prospects and risks of the companies and sectors in our universe. As well as defining a sustainable investment universe, this enables more impactful engagement with companies.

Refer also SG 01.5.

Property

We only invest in line with our public Ethical Charter (www.australianethical.com.au/australian-ethical-charter). The 23 Charter principles guide us to investments which support people, animals and the environment (positive screening) and which do not cause them unnecessary harm (negative screening). Our Ethical Charter requires us to assess the impacts of the development and operation of buildings on people, animals and the environment. This includes the impacts of greenfield developments, the environmental sustainability of buildings as well as the purposes for which buildings are used. Refer also SG 01.5.

Cash

We only invest in line with our public Ethical Charter (www.australianethical.com.au/australian-ethical-charter). The 23 Charter principles guide us to investments which support people, animals and the environment (positive screening) and which do not cause them unnecessary harm (negative screening). The Fixed Income Module includes information about our approach to corporate financial issuers which is applicable to our screening of cash investments. Refer also to SG 01.5.

Money market instruments

We only invest in line with our public Ethical Charter (www.australianethical.com.au/australian-ethical-charter). The 23 Charter principles guide us to investments which support people, animals and the environment (positive screening) and which do not cause them unnecessary harm (negative screening). The Fixed Income Module includes information about our approach to corporate financial issuers which is applicable to our screening of money market investments. Refer also to SG 01.5.

16.2. Additional information [Optional].


SG 17. ESG issues for externally managed assets not reported in framework

17.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Private equity

We screen all investments under our Ethical Charter, including investments made through external managers. This includes investment in venture capital and private equity funds. We assess a fund’s investment strategy and authorised investment criteria, as well as the capacity of the fund manager to take into account impacts on people, animals and the environment in their selection and management of investments. For our current investments in externally managed private equity funds, we review individual investments proposed by the funds for alignment with our Ethical Charter, and we have an option not to participate in investments which we assess not to be aligned. Our ongoing engagement with and monitoring of external managers and their sustainability reporting includes:

  • the alignment of investments selected by the manager with our Charter
  • the way in which the manager selects and engages with the companies they invest in to promote the interests of people, animals and the environment and to minimise harm to them.

Property

We screen all investments under our Ethical Charter, including investments made through external managers. This includes investment in externally managed property. We assess a fund manager’s investment strategy and authorised investment criteria, as well as the capacity of the fund manager to take into account impacts on people, animals and the environment in their selection and management of investments. Our ongoing engagement with and monitoring of external managers and their sustainability reporting includes:

  • the alignment of investments selected by the manager with our Charter
  • the way in which the manager selects and engages with the companies they invest in to promote the interests of people, animals and the environment and to minimise harm to them.

17.2. Additional information.


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