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Australian Council of Superannuation Investors (ACSI)

Service Providers Framework 2020

You are in Research and Data Provision » Research/process level

Research/process level

RDP 02. Sources for research and/or rating

02.1. Indicate the types of sources you use for research and/or ratings of companies/sectors/geographies or similar. Tick all that apply.

02.2. Indicate how ESG factors are incorporated into your research and/or rating methodology

02.3. Describe how you define materiality and how this is captured in your research and/or rating methodology as well as final product.

          The focus of ACSI’s research, policy and representation is environmental, social and governance (ESG) investment risks and opportunities. ESG is systematically incorporated into all research, analysis and voting advice provided by ACSI to our members, therefore, we do not have to implement a rating methodology to ensure that we are capturing material ESG issues.  

However, we can speak to how we define material ESG issues: In this ACSI views materiality as a consideration of whether an ESG issue will affect the long-term financial performance of companies in which our members invest. 
We determine which companies we focus on through research, prior engagement and the previous year’s proxy voting, as well as understanding the size of our members’ holdings. We focus our activities (like advocacy, voting and engagement) on material themes and companies.

02.4. Additional information. [OPTIONAL]

Governance guidelines:

Research reports:

Government submissions:

ACSI annual report:

RDP 03. Stakeholder input

03.1. Describe how you actively include input and information, wherever possible, from relevant stakeholders or interested parties, in the research process or in reaching assessment conclusions.

          ACSI’s ESG approach and research agenda is overseen by our Member Council, in consultation with Management. Its members actively contribute and set the goals and direction ACSI takes including the research topics for each year.   

ACSI also engages directly with ASX-listed companies to discuss issues, incorporating their feedback, and some NGOs groups on specific issues related to relevant listed companies or ESG themes.

03.2. Additional information. [OPTIONAL]

RDP 04. Up-to-date assessment and ratings

04.1. Indicate how you ensure that your ESG assessment of companies/ sectors/ geographies or similar is up-to-date and that new information is incorporated or new assessments are conducted at reasonable intervals.

04.2. Additional information. [OPTIONAL]

ACSI ensures that its data and assessments of companies are regularly updated, and we re-evaluate our ESG assessment and information on ASX300 companies and sectors through a variety of mechanisms throughout the year and more formally at particular intervals, such as during our sustainability disclosure research project in the first quarter of each year, prior to meeting a company and during the preparation of our voting advice for AGMs. ACSI also monitors controversies and communicates new information to members about ASX300 companies as they arise.

This means that our ESG information is kept up-to-date and is incorporated into the information we provide to members.

Examples of this are evident in ACSI's longitudinal research projects such as CEO Pay in ASX200 Companies and Sustainability Reporting Practices of the ASX200, which require thorough collection and collation of data to make an informed decision on a company's performance.

RDP 05. Balanced research and assessment

05.1. Indicate how you typically ensure a balanced approach to your research methodology and assessing/rating of companies/sectors/geographies or similar. Tick all that apply and explain your approach to each option.

Type of indicators

Explain your approach

          ACSI collects and assesses both qualitative and quantitative information.
This includes information and assessing indicators on specific companies or by index, sector, historical and current performance and particular thematic risks.

Explain your approach

          ACSI ensures that its data and assessments of companies are kept updated with past and current performance. This allows ACSI to make an informed decision on the improvement or deterioration of a company’s performance. This is achieved through a company-data record keeping system and a data and record keeping process employed by all staff.

Explain your approach

          ACSI’s core business activity is covering all areas of environmental, social and governance research and analysis.
ACSI conducts multiple thematic research projects on a variety of ESG topics such as fossil fuels, workplace mental health and safety, board composition and CEO pay. ACSI’s research projects each year cover E, S or G, or a combination of topics, therefore removing the issue of having all projects with the same single focus.

Explain your approach

          ACSI maintains a balance between company-provided information and independent information by actively utilizing both when conducting company and thematic research. ACSI accesses all publicly available information provided by the company alongside research and analysis by independent sources.

05.2. Additional information. [OPTIONAL]

ACSI’s research is special purpose and does not rate companies as such on an ESG basis, as contemplated by the ARISTA standard, nor is it designed to help companies form an investment opinion.

RDP 06. Consistency and comparability

06.1. Describe the control processes in place to ensure quality of research.

          Indicator 06.1, in its entirety, does not fit with the way ACSI conducts research as our research is special purpose and does not rate companies as such on an ESG basis, as contemplated by the ARISTA standard, nor is it designed to help companies form an investment opinion. ACSI’s research reports are thematic and discuss material risks and opportunities and therefore do not have the same criteria and methodology across all of them.

However, we can elaborate on the processes ACSI employs for all the work we do to ensure our research reports and voting reports are of high calibre and quality. 

ACSI’s core business activity is providing environmental, social and governance research and analysis and staff are employed to be ESG subject matter experts. In conjunction with this ACSI has different control processes to ensure the quality of research is assured. 

One or many of the following controls may be applied depending on the material:

- Seeking member input 
- Review by senior analysts
- Seeking input and working with other subject matter experts
- Review by executive management and/or CEO
- Seeking feedback from companies 
- Supplying a copy to companies

It is also worth noting that ACSI has a policy of correcting factual errors if any are made.

06.2. Additional information. [OPTIONAL]

RDP 07. Emerging ESG issues and trends (Private)

RDP 08. Client use of outputs

08.1. Describe how research and data provision outputs are used by clients.

Describe how research and data provision outputs are used by clients.

ACSI members use the research and data provided by ACSI to inform their investment decision-making processes, exposure to ESG investment risks and opportunities, help protect and manage their investments for the long-term and assist funds to exercise their responsibility of active ownership and stewardship of the shares they own within the ASX300. This is done via a multi-faceted approach through thematic and longitudinal research, policy advocacy, company engagement and proxy voting advice. ACSI provides research on material ESG issues to support our members advocacy, engagement and voting programs.

08.2. Additional information. [OPTIONAL]

RDP 09.