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BT Funds Management (NZ) Limited

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

          - Exclusions decision framework
        

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

Other description (1) - BTNZ's RI policy incorporates BTNZ's approach to  investment screens and securities exclusions for investments held.

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.

  • Our fiduciary duty prescribes that we act in the best interest of our customers.  As an organisation, BTNZ is cognisant of the need to make investment decisions that have regard for the risk-weighted return over nominated time periods.  BTNZ believes that long term investment outcomes can be enhanced if ESG considerations are factored in to the investment decision making process.
  • When considering ESG factors in the investment process, BTNZ is not seeking to take a moral stance. Instead, our approach is motivated by an objective of creating value and/or avoiding undue risks.
  • Consistent with our fiduciary responsibilities to our customers:
  1. We aim to incorporate ESG factors into investment analysis and decision-making processes (either directly or through third party investment managers (IMs)).
  2. We are active owners, consistent with our proxy voting policy.
  3. Where activity is in breach of national laws and international treaties supported by New Zealand, or engagement cannot deliver the necessary change, we implement asset restrictions, in line with our exclusion framework.
  4. We seek appropriate disclosure on ESG research and ESG-related issues by the IMs and/or entities in which we invest.
  5. We promote acceptance and implementation of ESG-related principles within the investment industry.

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]

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe why your organisation has not yet gone through a process to identify transition and physical climate-related risks and opportunities.

  • BTNZ is currently developing a climate change strategy, which will incorproate identifying transition and physical climate-related risks and opportunities across the BTNZ funds.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

  • As part of the ESG Credit Policy climate-related risks form part of the lending process for transaction-managed (commercial) lending. WNZL published its first Climate Change Impact Report in 2018, which used scenario analysis to quantify the possible impact of two transition scenarios on NZ’s economy. WNZL is currently undertaking an in depth climate risk assessment focussing on the financial impacts of particular physical climate risks.
  • BTNZ is currently developing a climate change strategy, which will incorproate identifying transition and managing material climate-related risks and opportunities across the BTNZ funds. This strategy is due to be presented to the BT Investment Committee in May 2020 and the BTNZ Board in June 2020, as part of a wider review of our responsible investment strategy.

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


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.

Other, specify (1) description

          - Exclusions decision framework
        

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].

  • As part of Westpac New Zealand Limited (WNZL), BTNZ's activites are governed by WNZL's guidelines and approach to environment, social and governance factors. These are outlined publically at https://www.westpac.co.nz/who-we-are/sustainability-and-community/. 

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.

  • WNZL's conflict of interest policies apply to all BTNZ and WNZL employees. These policies set out a process for identifying, declaring and managing conflicts of interest to ensure that any conflicts do not cause detriment to clients or allow senior managers to gain improper advantage or make improper use of their position.
  • Additionally the WNZL Code of Conduct applies to all BTNZ and WNZL employees. This sets out the standards of conduct expected of employees, and states in its principles that "we should not put ourselves in a position of conflict with the interests of a customer".
  • BTNZ has various policies, processes and internal controls to mitigate the risk of improper behaviour, including a comprehensive risk and compliance framework incorporating a 'Three Lines of Defence' model, online mandatory training, and investor surveys.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

  • BTNZ is made aware of company incidents through various means including news subscriptions, IMs, and our ESG research provider Sustainalytics.
  • Where BTNZ is exposed to a company involved in an incident, BTNZ will consider the incident and may request further information and an opinion from the relevant IM.

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