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PRI reporting framework 2020

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You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

ESG Objectives

          LGS' Responsible Investment approach uses negative screening (i.e. Restriction Lists) to limit our exposure to companies with a high ESG risk profile for our listed equities and fixed income portfolios.
When searching for new investment managers across all asset classes, due diligence should include a demonstration of how an assessment of ESG risks is incorporated into the investment process. The manager should specify the resources available to analyse ESG risks, including personnel and their expertise, and external research services used. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We assess ESG integration for all managers on an annual basis using pre determined propriety methodology which rates all managers converting qualitative aspects into quantitative scores.
        
          We review the quality of engagement, the metrics used to measure intangibles such as culture.
        
          We look at aspects of voting, philosophy alignment, coverage and disclosures.
        
          LGS promotes responsible investment principles during engagement with managers.
        
          We assess portfolio quality and emissions data/trends using external ESG data service providers. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          JP Morgan Global Government Bond Index
        

ESG Objectives

          When reviewing fixed income managers, LGS assess managers using proprietary methodology which rates all integration processes and policies. This enables LGS to develop a quantitative score for each manager. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We review any engagement activity and methodology employed by managers.
        
          We assess portfolio quality using external ESG service providers and other external sources.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          Bloomberg Ausbond Composite 0+ Year index
        

ESG Objectives

          LGS' Responsible Investment approach uses negative screening (i.e. Restriction Lists) to limit our exposure to companies with a high ESG risk profile for our listed equities and fixed income portfolios.

When searching for new investment managers across all asset classes, due diligence includes a demonstration of how an assessment of ESG risks is incorporated into the investment process. The manager specifies the resources available to analyse ESG risks, including personnel and their expertise, and external research services used. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          When reviewing fixed income managers, LGS assess managers using proprietary methodology which rates all integration processes and policies. This enables LGS to develop a quantitative score for each manager. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We review any engagement activities and methods employed by managers.
        
          We assess portfolio quality using external ESG service providers and other external sources.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          Bloomberg Ausbond Composite 0+ Year index
        

ESG Objectives

          LGS' Responsible Investment approach uses negative screening (i.e. Restriction Lists) to limit our exposure to companies with a high ESG risk profile for our listed equities and fixed income portfolios.

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          When reviewing fixed income managers, LGS assess managers using proprietary methodology which rates all integration processes and policies. This enables LGS to develop a quantitative score for each manager.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We review any engagement activities and methods employed by managers.
        
          We assess portfolio quality using external ESG service providers and other external sources.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          Bloomberg Ausbond Composite 0+ Year index
        

ESG Objectives

          LGS' Responsible Investment approach uses negative screening (i.e. Restriction Lists) to limit our exposure to companies with a high ESG risk profile for our listed equities and fixed income portfolios.

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          When reviewing fixed income managers, LGS assess managers using proprietary methodology which rates all integration processes and policies. This enables LGS to develop a quantitative score for each manager.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We assess portfolio quality using external ESG service providers and other external sources.  

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          Cambridge Associates LLC U.S Private Equity Index
        

ESG Objectives

          We advise managers of LGS investment restrictions that are contained in the standard due diligence questionnaire when on boarding PE managers. This is monitored.
        
          LGS has proprietary methodology to on board PE managers, rating all managers on a scale from laggard to leader. This takes aspects of ESG integration which may be qualitative and converts this to a score. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We assess soft skill set and influencing capabilities of PE managers.
        
          LGS promotes responsible investment principles to during engagement with managers.
        
          We include other aspects such as internal manager policy, financial conduct risk and governance & ownership at invested companies.
        

Incentives and controls

Reporting requirements

Benchmark

          FTSE/EPRA NAREIT Developed Index Net TR fully hedged
Mercer/IPD Australian Property Pooled Fund Index
        

ESG Objectives

          LGS promotes responsible investment principles to during engagement with managers.
        
          NABERS, GRESB

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        

Incentives and controls

Reporting requirements

Benchmark

          Australian 10 Year Govenrment Bond Yield + 4%
        

ESG Objectives

          LGS has developed proprietary methodology to rate ESG integration by our Infrastructure Managers. 

More information can be found on the LGS Sustainable and Responsible Investment Policy :https://www.lgsuper.com.au/assets/Documents/LGS-Sustainable-and-Responsible-Invest-Policy.pdf
        
          We interview all defensive alternative managers throughout the year to determine engagement activities of managers with assets.
        
          LGS promotes responsible investment principles to during engagement with managers.
        
          We seek to measure impact in 2020.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

04.4. Provide additional information relevant to your organisation`s appointment processes of external managers. [OPTIONAL]

          
        

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