Sustainability is integral to VicSuper's investment policy
Applied to investing, sustainability means social, environmental, economic and governance factors are integrated into investment decisions.
Sustainability investing does not have the same objective as ethical investing. Ethical investing is akin to negative screening whereby stocks or sectors are excluded from the investment universe based on a core set of beliefs. In practice, this means companies involved in alcohol production, armaments or contraception, as examples, may be excluded. VicSuper does not exclude or include companies or securities based on ethical considerations.
At VicSuper, sustainability investing is an approach that, when applied to investments in company shares and other assets such as property and infrastructure, considers the implications of economic, environmental and social challenges and opportunities for profitability and shareholder value.
All companies within their particular industries face sustainability challenges. For example, the food production industry needs to be sensitive to the water intensity of its activities due to water availability concerns and potential costs related to increasing water prices. The ways in which food companies respond to this challenge will determine their ability to remain competitive, innovative and maximise shareholder value.
Over the long term, companies that best address their material sustainability risks and invest in related opportunities are more likely to increase long-term shareholder value, thereby providing a better outcome for the environment and society through sustainable economic development. This is particularly relevant to VicSuper as a universal investor and to VicSuper Fund members as the ultimate beneficiary.
VicSuper integrates sustainability into its investment approach at both the local and global level. For examples of sustainable investments in various asset classes, please select from the following: