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PRI reporting framework 2020

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Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the internal and/or external roles used by your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for responsible investment.

Roles

Select from the below internal roles

          Head of Responsible Investment
        

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

Responsibilities for overseeing and/or implementing RI related activities within LGS include:

  • Board - The LGS Board has ultimate responsibility for the oversight of the LGS RI program. The Board meet on a monthly basis and provide final review and approval for the LGS SRI Policy and participation in RI related activities (this follows review and approval by the CEO and Investment Committee). Details of Board members including their qualifications and experience are available on the LGS website at https://www.lgsuper.com.au/about-us/board-and-executive-team/board-of-directors/.
  • Investment Committee - The board-level LGS Investment Committee consists of six people, four from the LGS Board and two external independents. The Investment Committee meet every 6 weeks to review LGS’ strategic asset allocation, investment mix and potential new investment opportunities. An RI report is prepared for each investment committee meeting. This report covers recent RI related activities and engagements that we have undertaken in addition to ESG reviews of potential new investment opportunities. The Investment Committee are responsible for overseeing the implementation of the LGS SRI Policy, including any changes to the policy (which is reviewed on at least an annual basis).The IC also reviews all ESG/RI asset class reviews. 
  • CIO - The LGS CIO oversees the Investments Team which includes the RI team. The Head of RI reports to the CIO and seeks their feedback and approval for RI policy reviews and related implementation activities.
  • Head of  Responsible Investment - The LGS Head of RI has the main responsibility for overseeing the RI program for LGS. They are responsible for the development and review of all RI related policies, including the LGS SRI Policy and the LGS Proxy Voting Policy as well as overseeing all RI related activities, including memberships in bodies such as the PRI. The head of RI also produces all annual asset class reviews and provides thought leadership for example adopting global best practice and research to the LGS Investment Portfolio. 
  • Portfolio managers - The LGS Portfolio Manager utilises ESG data provided by the RI team members for the internally managed SRI Overlay.
  • Investment analysts - The LGS Investment Analysts provide support to the RI team when required, including holdings analysis, manager engagement, due diligence and internal process building.
  • Dedicated RI staff - The LGS Responsible Investment Analyst and Administrator are responsible for implementing all RI related policies and activities including proxy voting, company engagement, negative screens, reporting, participation in collaborative initiatives and manager reviews.
  • External managers or service providers - Depending on the asset class and type of investment (trust vs. active mandate), RI parameters are usually included in the investment management or service agreement for external managers and service providers. In the majority of cases, the external manager is required to provide a level of oversight and accountability for RI performance and is also responsible for implementation across their portfolio, with some input from LGS. 

 

 

 

 

 

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

3 Number

07.4. Additional information. [Optional]

Alongside our internal staff (Head of Responsible Investment, Responsible Invstment Analyst and Responsible Investment Administrator) who manage responsible investment, we ustilise ACSI’s governance, research, engagement and proxy voting team to implement our responsible investment program.


SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. Indicate the roles in the organisation that have oversight, accountability and/or management responsibilities for climate-related issues.

Board members or trustees

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Risk Officer (CRO), Investment Committee

Other Chief-level staff or heads of departments

Portfolio managers

Investment analysts

Dedicated responsible investment staff

External managers or service providers

07.6 CC. For board-level roles that have climate-related issue oversight/accountability or implementation responsibilities, indicate how these responsibilities are executed.

Responsibilities for overseeing climate-related issues and activities within LGS include:

  • Board - The LGS Board has ultimate responsibility for the oversight of our approach to climate change. The Board meet on a monthly basis and provide final review and approval for the LGS SRI Policy (including carbon investment restrictions) and participation in climate related activities.
  • Investment Committee - The LGS Investment Committee consists of six people, four from the LGS Board and two external independents. The Investment Committee meet up to 8 times per year to review LGS’ strategic asset allocation, investment mix and potential new investment opportunities. An RI report is prepared for each investment committee meeting. This report covers recent climate change related activities and engagements that we have undertaken in addition to ESG and carbon reviews of potential new investment opportunities. The IC are also provided with an update on our exposure to low carbon investments and potential new investment opportunities. The Investment Committee are responsible for overseeing the implementation of the LGS SRI Policy, including any changes to the policy (which is reviewed on at least an annual basis).
  • The Board, Investment Committee and Responsible Investment team are advised by ACSI for the Australian Equities market. ACSI, on behalf of members, manager and monitors climate-related priority companies and provides updates to member funds via formal semi-annual engagement reports and other informal member briefings on a quarterly basis. These reports track progress on climate-related objectives for specific companies and provides updates on broader climate change trends in the market. ACSI prioritse companies for engagement on climate change risk and are exploring voting recommendations for laggard companies where there has been no progress in engagement. 

07.7 CC. For management-level roles that assess and manage climate-related issues, provide further information on the structure and processes involved.

  • Head of Responsible Investment - The LGS Head of RI has the main responsibility for overseeing our approach to managing climate change risks and opportunities. They are responsible for the development and review of all RI related policies, including our commitment to managing climate risks and the carbon investment restrictions in the LGS SRI Policy and our approach to engagement on climate issues in the LGS Active Ownership Policy. They are also responsible for overseeing all climate change related activities, including participation in industry working groups on climate change (e.g. PRI and IGCC) and external engagements with companies on climate risks and opportunities.
  • Portfolio managers - The LGS Portfolio Manager utilises carbon data provided by the RI team members for the internally managed SRI Overlay.
  • Dedicated RI staff - The LGS Responsible Investment Analyst and Administrator are responsible for implementing all climate-related components of LGS policies and activities including proxy voting, company engagement, negative screens, reporting, participation in collaborative initiatives and manager reviews.
  • External managers and service providers - Depending on the asset class and type of investment (trust vs. active mandate), RI parameters including carbon related investment restrictions and performance reporting are usually included in the investment management or service agreement for external managers and service providers. In the majority of cases, the external manager is required to provide a level of oversight and accountability for RI performance and is also responsible for implementation across their portfolio, with some input from LGS. ACSI, on behalf of members, manages and monitors climate-related priority company engagement and provides updates to member funds via formal semi-annual engagement reports and other informal member briefings on a quarterly basis. These reports track progress on climate-related objectives for specific companies and provides updates on broader climate change trends in the market. Management can also be informed on climate-related issues through ACSI’s Member Council and climate specific events and meetings.

07.8 CC. Indicate how your organisation engages external investment managers and/or service providers on the TCFD recommendations and their implementation.


SG 08. RI in performance management, reward and/or personal development

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Board members/Board of trustees

08.1b. RI in personal development and/or training plan

08.2. Describe any activities undertaken during the reporting year to develop and maintain Board members’ skills and knowledge in relation to responsible investment.

The Investment Committee receives responsible investment reports that provide updates on LGS' RI program and industry developments. The Investment Committee also review RI assessments of ESG risks that are undertaken for all asset classes and new manager proposals. The new PRI Academy module for trustees was also promoted following its release and has been completed by the Chair of the LGS Investment Committee.

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Operating Officer (COO), Investment Committee

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Other C-level staff or head of department

          Head of Responsible Investment
        

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Portfolio managers

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Investment analysts

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Dedicated responsible investment staff

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

LGS does not have a variable remuneration component to our compensation.

08.4. Describe the level of experience board members/trustees/chief-level staff have with incorporating ESG factors into investment decision-making processes.

          The staff have over a decade of experience in incorporating ESG factors into the LGS investment decision making process.
        

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