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Aware Super

PRI reporting framework 2020

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Promoting responsible investment

SG 09. Collaborative organisations / initiatives

09.1. Select the collaborative organisation and/or initiatives of which your organisation is a member or in which it participated during the reporting year, and the role you played.

Select all that apply

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Liza McDonald our Head of Responsible Investment is a member of the Australia Country Network Committee

First State Super has joined the PRI Oil & Gas Thematic advisory group as well as the Climate Action 100+ supported by the PRI

Attended and supported Australia industry events and hosted the PRI's launch of collaborative initiatives in our Sydney and Melbourne offices.

 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

First State Super is a full member of the Australian Council of Superannuation Investors

Liza McDonald, First State Super's Head of Responsible Investment is on the Board and the Member Council

First State Super participates in research and engagement activities to support ACSI's initiatives

Representatives of First State Super have participated in the ACSI annual conference by speaking on a panel related to Modern Slavery

 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Enhanced signatory status, supporter to encourage companies to report under CDP and supported 2019 disclosure initiative by adding signature to letters to companies that hadn't responded.

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Signatory - supporting companies to respond to the questionnaire

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

First State Super is the lead investor for three Australian companies - Origin; AGL & Santos. 

We contributed a case study to the first progress report and were part of a panel at the Investor Group on Climate Change Summit in Australia focussed on CA100+ .  The panel included representatives from the companies we were engaging with. 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Liza McDonald Head of Responsible Investment is on the executive committee

First State Super sits on the ESG Research Australia working group and ESG Research Australia Awards working group. This involves monthly meetings and input to the direction of the groups. In relation to the Awards working group First State Super was on the assessment panel to determine the recipients of the awards and Liza McDonald is one of the judging panel for the award recipients.

 

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Our CIO Damian Graham is on the Management Committee of IGCC. 

First State Super are members of the Transition Working Group.

First State Super attends all member meetings, events and provides input to the discussions 

          RIAA
        

Your organisation’s role in the initiative during the reporting period (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

Member of RIAA and SRI product certified by RIAA.

Participate in corporate engagement working group

Contribute to conference sessions as panellists

First State Super is a member of the Human Rights Corporate Engagement Working Group committee and responsible for input into the disclosure engagement program

          Workforce Disclosure Initiative
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

First State Super became a signatory and supporter of the Workforce Disclosure Initiative.

We lead the promotion of this disclosure initiative in Australia by broadening the target companies to the ASX50.  This involved liaising with other signatories to get their support; liaising with WDI to include more target companies; sending letters on behalf of WDI and support investors to the target companies.  Our engagement activities with companies are used to encourage them to report under the WDI.

          Hermes Eos
        

Your organisation’s role in the initiative during the reporting year (see definitions)

Provide a brief commentary on the level of your organisation’s involvement in the initiative. [Optional]

First State Super has appointed Hermes Eos as our international engagement provider.

Hermes Eos helps long-term institutional investors around the world to meet their fiduciary responsibilities and become active owners of international public companies. Their team of engagement and voting specialists monitors the investments of First State Super in global companies and intervenes where necessary with the aim of improving performance and sustainability and promotes ESG integration.


SG 09.2. Assets managed by PRI signatories

Indicate approximately what percentage (+/- 5%) of your externally managed assets under management are managed by PRI signatories.

70 %

SG 10. Promoting RI independently

10.1. Indicate if your organisation promotes responsible investment, independently of collaborative initiatives.

10.2. Indicate the actions your organisation has taken to promote responsible investment independently of collaborative initiatives. Provide a description of your role in contributing to the objectives of the selected action and the typical frequency of your participation/contribution.

Description

          Presented at member seminars to promote First State Super's approach to Responsible Investment and ESG integration - approximately 4 x yearly 
Presented to internal staff to promote First State Super's approach to Responsible Investment and ESG integration - approximately 4 x yearly 
Presented to our fund managers – ongoing throughout the year.  A recent example has been presenting to  BlackBird VC on ESG integration. 
Presented at a variety of conferences and education forums, often in the form of panel sessions on the role of ESG in investments. 

Presented to our fund manager BlackBird VC on ESG integration
        

Frequency of contribution

Description

          Support broker research by tagging commissions
        

Frequency of contribution

Description

          Participated in survey with Australia National University on Supply Chain Research
        

Frequency of contribution

Description

          As part of our manager assessment and monitoring process we are asking our managers to be more transparent. This includes reporting publicly and to First State Super on how they integrate ESG  and report publicly and to us on how they integrated ESG into their investment process as well as their voting and engagement activities.
        

Frequency of contribution

Description

          Presented at industry events held by ESG RA, RIAA, PRI in Person in Paris, ACSI, Bloomberg, IGCC Climate Summit
        

Frequency of contribution

Description

          Published research reports on Climate Change - Portfolio Transition Plan
        

Frequency of contribution

Description

          Manager assessments include promoting that investment managers adopt the PRI through asking all fund managers if they are signatories.
        

Frequency of contribution

Description

          Contributed to articles: Sustainability Report; Investment Magazine
        

Frequency of contribution

Description

          PRI Australia Network Committee
        

Frequency of contribution

Description

          Board member and risk committee member of ACSI
        

Frequency of contribution

10.3. Describe any additional actions and initiatives that your organisation has taken part in during the reporting year to promote responsible investment [Optional]

In our discussions with our current investment managers as well as prospective managers, we encourage the adoption of the Principles and of our Responsible Investment policy.  We also encourage our managers to report publicly on their ESG activities and disclose how they integrate ESG risks into their investment process.


SG 11. Dialogue with public policy makers or standard setters

11.1. Indicate if your organisation - individually or in collaboration with others - conducted dialogue with public policy makers or regulators in support of responsible investment in the reporting year.

If yes

11.2. Select the methods you have used.

11.4. Provide a brief description of the main topics your organisation has engaged with public policy-makers or regulators on.

Tax and tax transparency, ASX Listing Rules, Modern Slavery Act, Whistleblower policies, executive remuneration, climate change and culture.

ACSI submission to the GRI on Tax and Payments to Governments

https://acsi.org.au/submissions/acsi-submission-to-the-gri-on-tax-and-payments-to-governments/

ACSI submission on Simplifying, Clarifying and Enhancing the Integrity and Efficiency of the ASX Listing Rules

https://acsi.org.au/submissions/acsi-submission-on-simplifying-clarifying-and-enhancing-the-integrity-and-efficiency-of-the-asx-listing-rules/

ACSI submission to the Board of Taxation on the Post-implementation review of the Tax Transparency Code

https://acsi.org.au/submissions/acsi-submission-to-the-board-of-taxation-on-the-post-implementation-review-of-the-tax-transparency-code/

ACSI Submission on the Modern Slavery ACSI 2018 – Draft Guidance for Reporting Entities

https://acsi.org.au/submissions/acsi-submission-on-the-modern-slavery-act-2018-draft-guidance-for-reporting-entities/

ACSI submission on ASIC Consultation Paper 321: Whistleblower policies

https://acsi.org.au/submissions/acsi-submission-on-asic-consultation-paper-321-whistleblower-policies/

APRA discussion paper 'Strengthening prudential requirements for remuneration'

https://www.apra.gov.au/consultation-on-remuneration-requirements-for-all-apra-regulated-entities

 

https://www.hermes-investment.com/stewardship/eos-literature/

EOS at Federated Hermes contributes to the development of policy and best practice on environmental, social and governance matters and shareholder rights to protect and enhance the value of the shareholdings of its clients over the long term.

In 2019, in relation to environmental concerns, Saker Nusseibeh, CEO of Hermes Investment Management, and Bruce Duguid, head of stewardship at EOS, attended a two-day Vatican summit on the energy transition, along with CEOs from major oil companies, asset managers and asset owners. The summit highlighted the need for urgent action on the climate emergency and focused on three key issues: a just transition to a low carbon economy; introducing reliable and meaningful carbon pricing; and transparency in reporting climate risks. Mr Nusseibeh signed two accords on behalf of Hermes on carbon pricing and transparency of financial risks, showing its commitment to taking genuine action on the climate crisis.

EOS is also an active member of the PRI’s Plastics Investor Working Group, advising on strategy and engagement. EOS gave feedback on the research for three PRI reports published in 2019, setting out what investors would find useful. The three reports explore why plastic is a problem, plastic value chain risks and opportunities, and how the plastic landscape is changing. The aim is to help investors identify where and how their portfolios might be exposed to plastic, so they can engage at the corporate and policy levels accordingly.

With regard to social issues, EOS responded to the UK Home Office’s consultation on potential revisions to the Modern Slavery Act and argued for a requirement to report on all six of the currently recommended areas, instead of adopting a ‘comply or explain’ approach. It supported the creation of a registry to enable stakeholders, including investors, to access companies’ modern slavery statements. It argued that a central registry should include a list of the companies caught by the Act’s reporting requirement, regardless of whether they had submitted a compliant statement.

EOS supported ‘Find It, Fix It, Prevent It’, a collaborative initiative to combat modern slavery. This calls on UK-listed companies to increase their efforts to address this issue and to support the provision of remedy to victims. And as an advisory committee member of the PRI cobalt supply chain collaborative engagement, EOS was the only investor representative to attend an OECD-led field trip to the Democratic Republic of Congo to see first-hand the human rights challenges, particularly around artisanal-scale mining. EOS also participated in an on-site OECD roundtable, sharing its perspective and experience with local and international stakeholders.

In relation to governance, EOS contributed to several reviews and consultations looking at ways to overhaul the UK audit sector, including the Competition and Market Authority’s study, the Business, Energy and Industrial Strategy consultation and the Brydon Review. In the consultations EOS expressed its concerns about audit quality, and called for more professional scepticism, with auditors prepared to challenge management, rather than taking a tick-box approach.

In the US, following moves by the Securities and Exchange Commission (SEC) to restrict rights relating to shareholder proposals and regulate proxy adviser activity, EOS wrote to the SEC pointing out that proxy advisers are contractual agents of institutional investors, not of the companies who are the subjects of their research.

EOS also joined an Asian Corporate Governance Association delegation to South Korea to engage with regulators, government departments and businesses on ways to improve corporate governance there. During the trip EOS urged stakeholders to do more to stimulate the economy and encourage entrepreneurialism, without diluting corporate governance standards. EOS argued against the proposed introduction of dual-class share structures, which may threaten minority shareholder rights. EOS also expressed the need for clearer guidance on the so-called 5% rule, whereby shareholders with a 5% stake in a company must state if they plan to influence management. The law was conceived as an anti-takeover measure but there are concerns it could make some asset owners reluctant to adopt the country’s stewardship code due to uncertainty about the legitimacy of engaging with companies on corporate governance.

 


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