Positive and negative investment screening
Australian Ethical will only invest where making the investment is assessed to be aligned with our 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). This requires us to assess the positive and negative impacts on people, animals and the environment of a company's products and services (including impacts from the way those products and services are produced, supplied, consumed and disposed of).
Within Australian Ethical’s screened universe of investments, our assessment of investment opportunity and risk and our decisions to buy and sell individual investments and to otherwise manage our investment portfolios is informed by our ethical assessment of companies and industry sectors (including their positive and negative impacts on people, animals and the environment).
Company engagement and advocacy
Australian Ethical influences better management by companies of their impacts on people, animals and the environment i.e. to increase positive and reduce negative impacts. This may include influencing through private engagement, voting, public praise or criticism, shareholder resolutions and divestment.
Investment industry influence
Australian Ethical pursues opportunities to increase the capacity and motivation of other investors to also act to advance the interests of people, animals and the environment. This includes exercising influence as member, office holder and working group participant of industry associations and initiatives, as well as independent advocacy for responsible investment.
Public policy advocacy
Australian Ethical uses its investor influence to promote government policies and public attitudes which advance the interests of people, animals and the environment. This includes submissions for government policy consultations and the exercise of a responsible public investment voice on important issues.
Measurement and transparency
Australian Ethical pursues opportunities to measure and report on the impact of its action to further the aims of the Ethical Charter. This is important as a tool both for increasing impact and for demonstrating impact to Australian Ethical members and other clients and stakeholders. Australian Ethical reports in accordance with standards and guidelines of the Global Reporting Initiative (GRI), and current channels for impact reporting include annual Australian Ethical group sustainability reporting, member communications, social media, Good Money magazine and the Australian Ethical website.
Australian Ethical regularly reviews its priority actions in the above areas, taking into account current social, animal and environmental needs and opportunities for us to make the biggest difference.
In the above areas Australian Ethical acts both independently and collaboratively with other investors as well as with non-investment companies and groups. We are an active participant in a number of investor organisations including the UN Principles for Responsible Investment, Responsible Investment Association of Australasia, Investor Group on Climate Change, Portfolio Decarbonisation Coalition, Financial Services Council and Association of Superannuation Funds of Australia Limited.
External investment services
Australian Ethical only uses external investment services where the provision of those services is assessed to be aligned with the Ethical Charter. For example, we may appoint an external investment manager for some investments where we are satisfied that those investments will be managed in accordance with the Ethical Charter, having regard to the investment mandate and external manager’s capabilities.