As the fund for Australia's Higher Education sector, UniSuper's membership base has been highly engaged on ESG issues for well over 20 years. This understanding and regular engagement with our members has meant that we have awareness of many topical ESG issues early. This in combination with our lack of investment consultants, extensive investment delegations, high levels of investment internalisation (>75% of FUM) and a very experineced in-house investment team has meant that ESG has been fully integrated into our investment process. Further, a self-reliant, collaborative and collegiate approach mean that we are able to adapt, evolve, engage on and analyse ESG issues as they arise. This iterative approach allows for the materiality of risks to be assessed quickly, both from a financial and member perspective, and then determine the appropriate response (i.e. engagement, monitoring, reporting or collaboration)
Below is a summary of innovative aspects of our RI approach
- One of the first Australian funds to internalise, with ~ 70% of funds managed internally. Further, the combination of extensive delegations, lack of asset consultant and very experienced in-house investment expertise mean that we are able to quickly respond to opportunties as they arise.
- The CIO approves proxy votes for all Australian stocks managed by the internal team.
- UniSuper has a focus on "quality" assets at the right price. We take substantial positions and hold for the long term. In doing so, we view ourselves as being in partnership with the company and believe that building an ongoing respectful relationship is critical. We actively seek out company management and the board and vice versa to discuss all issues of concern and to set out our expectations. In doing so, we also highlight to those companies (and others that we engage with) what issues are of concern to our members. This is an on-going process of engagement.
- ESG disclosures: Providing regular feedback on sustainability reporting to companies, both on request and to drive improvements.
- Engaging with companies early on in their sustainability journey to encourage and support better reporting and actions.
- All external managers are active managers that consider ESG, with most having a specific sector/region focus (e.g. Technology, Healthcare, Infrastructure, Japan, India) with a deep understanding of the ESG issues that are prevalent in that particular sector/region and how companies are positioned with respect to these risks.
- UniSuper has a whole of portfolio approach to managing investments and ESG, and the combination of systems from our custodian (BNP Paribas), trading and analytics systems (Bloomberg) and our ESG data provider (MSCI) mean that we have ready access to understand investment and portfolio ESG risks and opportunities quickly and easily. These systems provide the backbone for compliance, climate risk exposure reporting, modern slavery and portfolio construction for our Sustainable options
- One of the first pension funds to release a TCFD report
- UniSuper offers 16 options to members and while all of these options apply responsible investment principles - integrating ESG and screening out tobacco. 3 options consider ESG factors in a more explict way:
- Sustainable High Growth and Sustainable Balanced - also screen out - alcohol, gaming, weapons and fossil fuel, considering revenues rather than GICS classifcations. These options also have minimum ESG scoring requirements and the Sustainable Balanced option invests in Green Bonds. These options have the same financial return objectives as their mainstream counterparts
- Global Environmental Opportunties - invests in (positive screen) companies that recieve more than 50% of their revenues from addressing environemntal issues - renewable energy, energy efficency, water and waste mangement, and green buildings
Collaboration and advocacy
- Like many Australian superannuation funds, UniSuper is an active participant in a number of collaborative groups. We seek to participate meaningfully and sit on the management committee/board of these groups.