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Australian Ethical Investment Ltd.

PRI reporting framework 2019

You are in Strategy and Governance » Objectives and strategies

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]

Our Ethical Advisory Group (see SG 07.2) meets approximately eight times per year. The activity of the Ethical Advisory Group is reported to the board quarterly.


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

          Contribution to training on ESG incorporation methodologies.
        

Progress achieved

Our ethics research team, CIO and CEO participated in a range of responsible investment working groups, presentations, panels and conferences which dealt with ESG integration opportunities and challenges (including initiatives organised and coordinated by Responsible Investment Association of Australasia, Investor Group on Climate Change, Financial Services Council, BBFAW and PRI).

Key performance indicator

          Contribution to training on ESG engagement methods and opportunities.
        

Progress achieved

Our ethics research team, CIO and CEO participated in a range of responsible investment working groups, presentations, panels and conferences which dealt with ESG engagement opportunities and challenges (including initiatives organised and coordinated by Responsible Investment Association of Australasia, Investor Group on Climate Change, Financial Services Council, 30% Club, FAIRR and PRI).

Key performance indicator

          Implementation of our Advocacy Plan for the year, and pursuing other engagement and advocacy opportunities as they arise to advance our Ethical Charter
        

Progress achieved

We engaged with companies about:

- disregard for the interests of customers in the financial services sector

- harm to animals caused by live export of sheep

- action to align activities with the Paris Climate Agreement and the net zero emissions transition  

- worker exploitation in agricultural supply chains

- reduction, refinement and replacement of the use of animals in medical research.

Positive progress was reported by companies in these areas. Further information is available here:

https://www.australianethical.com.au/ethical-influencing/

https://www.australianethical.com.au/animal-wellbeing/

Key performance indicator

          Efficiency and effectiveness of ethical screening process
        

Progress achieved

Ongoing review of frameworks for application of our Ethical Charter and third party ESG data and analysis used. Revised frameworks adopting for banking, governments and diversity.

Financial performance of investments

ESG characteristics of investments

Key performance indicator

          Screening of all investments under the Australian Ethical Charter, taking account of positive and negative impacts on people, animals and environment.
        

Progress achieved

All potential new investments were assessed under our Ethical Charter. We did not invest in 'non-aligned' companies (other than nominal holdings held for advocacy purposes).

Key performance indicator

          Progress towards our target of net zero emissions by 2050 across all our investments (target set under Portfolio Decarbonisation Coalition in 2014).
        

Progress achieved

The carbon footprint of our share investments remains well below the footprint of the benchmark (34% of the carbon intensity of benchmark at 31 December 2017). This shows the effectiveness of our Ethical Charter in identifying low-carbon investments. Our share investment in renewable power generation is proportionately about six times that of the global sharemarket. The growth in renewable power generation capacity, represented by our current share investments and projected over the next five years, is aligned with what is required to limit warming to below 2 degrees (under the IEA SDS and B2DS scenarios).

Further information is available in our Sustainability Report (pages 20-26 https://www.australianethical.com.au/wp-content/uploads/2018/10/Sustainability-Report_2018-WEB_24102018.pdf).

 

Other activities

Key performance indicator

          Contribution to collaborative investor engagement initiatives as part of our annual Advocacy Plan and to advance our Ethical Charter.
        

Progress achieved

We contributed to the following collaborative investor engagement initiatives:

- reduction of antibiotic use in animal agriculture and increased use of plant based protein in food (FAIRR)

- Climate Action 100+ engagement with carbon intensive companies and sectors (IGCC).

Further information is available here:

https://www.australianethical.com.au/ethical-influencing/

https://www.australianethical.com.au/animal-wellbeing/

Key performance indicator

          Increased institutional investor participation in collaborative engagement and advocacy.
        

Progress achieved

We encouraged investor participation and support for shareholder resolutions in responsible investment working groups, presentations and panels dealing with shareholder engagement and investor disclosure. These were organised and coordinated by Responsible Investment Association of Australasia, Investor Group on Climate Change and Financial Services Council. We have seen a growing level of institutional investor support for shareholder resolutions on ESG issues.

Key performance indicator

          Public communication of specific engagements and investment impacts.
        

Progress achieved

Ongoing communication of investment examples, company engagements and portfolio impact through our annual reporting, Advocacy Fund reporting, Good Money magazine, website articles and social media. Examples include:

https://www.australianethical.com.au/wp-content/uploads/2017/09/AEI-Annual-Report_FA_SPS_WEB_2017.pdf

https://www.australianethical.com.au/news/12-ways-we-are-for-a-better-world/

https://www.australianethical.com.au/news/fair-goals-30-club/

https://www.australianethical.com.au/news/keen-green-find-shade-thats-right/

https://www.australianethical.com.au/news/powerful-ethical-argument-for-wind/

https://www.australianethical.com.au/news/australian-ethical-is-divesting-from-amp/

https://www.australianethical.com.au/news/two-ethical-companies-invested/

https://www.australianethical.com.au/news/australias-live-export-trade-needs-end-now/

other description (1)

          Impact measurement and reporting
        

Key performance indicator

          Identification, measurement and reporting of new impact metrics
        

Progress achieved

Our 2017-18 reporting (https://www.australianethical.com.au/wp-content/uploads/2018/10/Sustainability-Report_2018-WEB_24102018.pdfi) included information about the climate performance and SDG impact of our investment portfolio. This included carbon footprint data for our share investments (emissions intensity 34% of blended benchmark as at 31 December 2017, as assessed by Trucost); 'sustainable impact revenue' earned by companies we invest in (sustainable impact measured as over 3 times impact of blended benchmark as at 31 December 2017, assessed using MSCI ESG Research data on revenue from social impact solutions and environmental impact solutions); alignment of our energy sector investments with a well below 2 degree path; company and government engagement outcomes; and information about the impact of specific investments. Challenges include availability, consistency and reliability of data; capturing and balancing multiple positive and negative impacts of  products and services (production, distribution and consumption). 

06.2. Additional information.


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