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Colonial First State

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

CFSIL has an in-house investment management function (Investments Team) which constructs and manages multi-manager portfolios for which CFSIL is RE and RSE. The Funds offer single sector and multi sector investment  options to members which invest into these Schemes. The team uses an external investment consultant, Mercer,  who provides advice on strategic asset allocation, manager selection and portfolio construction.

The Investments Team capability is also used to construct the portfolios for the MySuper products.  The investment strategy used for the default is known as Lifestage, which utilises a lifecycle approach. We believe that the lifecycle philosophy (with asset allocation that changes with the age of the member) is a superior approach to manage the superannuation assets of members who do not select their own strategy, than a default that has a single asset allocation for all members (making it necessary for the member to change options with age or when circumstances change).

CFSIL recognises that ESG factors can have a material impact on investments  as disclosed in our Responsible Investment Framework on our public website.

A CFSIL wide exclusions policy applies to the producers of tobacco and manufacturers of controversial weapons across our equity and bond holdings.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

The RSE Trustee considers the best interests of Fund members in making investment related decisions. CFSIL recognises that ESG factors can have a material impact on ithe risk and returns of nvestments over the long term,  and as such, the CFS Responsible Investing Framework is made available on the CFS website. https://www3.colonialfirststate.com.au/content/dam/colonial-first-state/docs/about-us/trustee-documents/CFS%20Responsible%20Investing%20Framework.pdf

The relevance of ESG factors to investment decision making is subject to the Responsible Investing Framework, which aims to integrate ESG considerations into investment processes and support the pursuit of sustainable long term investment outcomes for members. For CFSIL, including its MySuper offering, ESG risks are addressed under the Environmental, Social & Governance Risk Management and Voting Policy, and a CFSIL wide exclusions policy applies to the producers of tobacco and manufacturers of controversial weapons, for all equity and bond holdings.

The RSE Trustee aims to provide transparency to members regarding its approach to ESG factors. For that reason, product-specific approaches to ESG factors are outlined in relevant product disclosure documents.

Furthermore, the investment manager of an Investment Option may take into account ESG factors when making investment decisions.

More information on our responsible investment approach is available on our public website at:  https://www3.colonialfirststate.com.au/about-us/corporate-profile/responsible-investment/our-beliefs-lead-to-our-approach.html

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

In order to understand and incorporate member sustainability preferences we are updating our Member survey in 2020. Results from previous survey have been disclosed on our public website.

https://www3.colonialfirststate.com.au/about-us/corporate-profile/responsible-investment/our-responsible-investing-journey.html

Our Modern Slavery approach will be disclosed as it continues to evolve https://www3.colonialfirststate.com.au/about-us/corporate-profile/responsible-investment/modern-slavery.html

Our climate change approach will be disclosed as it continues to evolve https://www3.colonialfirststate.com.au/about-us/corporate-profile/responsible-investment/climate-change.html

Because the nature of CFSIL's investment platforms, products and strategy differ across platform. There is no one set of investment principles or overall investment strategy applied. 

Product Disclosure Statements (PDS)  are linked below and describe the additional investment philosophies and approaches of the various platforms, products and investment strategies offered within. 

FirstChoice Investment

https://www3.colonialfirststate.com.au/content/dam/prospects/fs/1/4/fs1492.pdf?8

FirstChoice Wholesale Super and Pension
https://www3.colonialfirststate.com.au/content/dam/prospects/fs/5/7/fs5735.pdf?8
https://www3.colonialfirststate.com.au/content/dam/prospects/fs/6/0/fs6080.pdf?6

 


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

All Board and executive leadership team members are required to declare all conflicts of interest at all meetings, and conflicts of interest between business units or parties are required to be declared in all recommendations as per the CFSIL Conflicts of Interest Policy and regulatory requirements.

In practice, where perceived conflicts of interest exist between the parent company (Commonwealth Bank of Australia) and other internal business entities, the Non–Independent Non-Executive Director and any relevant members of the management team excuse themselves from supporting management recommendations to ensure decision making is led by the business area of expertise and the Independent Non-Executive Directors.

As a limited liability company, CFSIL is required to comply with laws outlined in the Australian Corporations Act 2001 issued by the Australian Government. As a RE and scheme operator, CFSIL is required to hold an Australian Financial Services license (AFSL) issued by the Australian Securities and Investment Commission (ASIC) which allows the business to operate, market-make and deal financial products, issue managed investment schemes, administer our products and funds, and transact on behalf of our members. CFSIL as an RE is required to comply with all ASIC issued regulation applicable to AFSL holders.

 

03.3. Additional information. [Optional]

In addition to complying with both the Corporations Act 2001, AFSL licensee and ASIC regulations, as a superannuation provider and thus an RSE Trustee, CFSIL is also required to hold an RSE License and comply with all Australian superannuation regulation, prudential and reporting standards issued by the Australian Prudential Regulatory Authority (APRA). This licensing requirement and set of regulations only applies to Australian superannuation funds (i.e. asset owners) and provides strict guidance on superannuation fund governance, business structure, remuneration, strategic planning, member outcomes, managing conflicts of interest, investment governance and operational and investment risk management.

In relation to investments or other arrangements through related parties, the CBA Group implements governance procedures that are designed to ensure that the RSE Trustee and each other entity involved has identified the relevant considerations (e.g. acting in the best interests of relevant members), and makes the required decision in the correct capacity, having regard to these considerations.

CFSIL has operated as an RSE Licensee and superannuation fund for over 20 years. We believe we are compliant with all the legal and regulatory requirements of an asset owner including those relating to board and investment governance, business structuring, remuneration and managing conflicts of interest. We recognise that, like any asset owner, there are processes that can be improved, and we are working to make these improvements to ensure better member outcomes.


SG 04. Identifying incidents occurring within portfolios (Private)


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