Our Socially Conscious investment option gives our members the opportunity to align the way their super savings are invested with their social and environmental values.
If you’d like to take action on climate change, minimise social harm and protect human rights, labour rights and the environment, this could be the investment option for you.
The fees are comparable to a typical Balanced investment option, and you still have access to all the benefits and services of a large super fund.
Invest in Socially Conscious and you can meet three key objectives. It’s never been easier to invest in a super option that makes a difference.
Minimise social harm
By not investing in companies that are materially involved in activities that potentially cause social harm for example tobacco production, alcohol, gambling, military weapons, civilian firearms, nuclear power, adult entertainment and genetically modified organisms.
Protect human and labour rights and the environment
By not investing in companies that have been involved in severe incidents or controversies, or are not adhering to widely accepted global conventions
Take action on climate change
By not investing in companies that hold fossil fuel reserves used for energy purposes.
If you aren't a VicSuper member, you can select this investment option when you join VicSuper, it takes less than 10 minutes to join.
What is the Socially Conscious investment option?
VicSuper’s Socially Conscious investment option is what’s known as a socially responsible investment option. It provides our members with the opportunity to invest their super savings in alignment with their social and environmental values.
VicSuper’s Socially Conscious investment option has been certified by RIAA (Responsible Investment Association of Australia) according to the strict operational and disclosure practices required under the Responsible Investment Certification Program.
The Socially Conscious investment option is available to VicSuper’s FutureSaver and Flexible Income members. It is not offered via VicSuper’s Guaranteed Income Products.*
* VicSuper relies on Challenger Life Company, under life policies issued to VicSuper by Challenger, to fund payments to members who select these products. VicSuper does not itself provide a guarantee.
Which social and environmental objectives apply to the option?
VicSuper’s Socially Conscious investment option incorporates a wide range of explicit social and environmental objectives.
The Socially Conscious investment option aims to help our members:
- take action on climate change by not investing in companies that hold fossil fuel reserves used for energy purposes;
- minimise social harm by not investing in companies that are materially involved in activities that potentially cause social harm, for example tobacco production, alcohol, gambling, military weapons, civilian firearms, nuclear power, adult entertainment and genetically modified organisms;
- protect human rights, labour rights and the environment by not investing in companies that have been involved in severe incidents and/or controversies, or have been found to not be adhering to widely accepted global conventions.
The objectives are achieved by applying a number of exclusionary screens when selecting companies for investment. These exclusionary screens only apply to the equities and fixed interest components of the investment option. We may introduce additional screenings in the future. Investments across the other asset classes apply an environment, social and governance (ESG) integration approach, with the exception of Cash, which is not subject to ESG integration. Find out more about ESG integration in a question below.
Socially Conscious investment option
Environmental, social and labour objectives and exclusionary screens
Take action on climate change Excludes investment in companies:
- with coal, oil and/or gas reserves used for energy purposes.
- deriving 5% or more revenue from mining of thermal coal or thermal coal based power generation.1
- whose principal business revenue is derived from direct fossil fuel activity in the following GICS2 sub-industries: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Drilling; Oil& Gas Equipment & Services1,3
Minimalise social harm Excludes investment in companies materially4 involved in:
- Civilian Firearms
- Military Weapons (cluster munitions, landmines, depleted uranium, biological/chemical1, nuclear, conventional)
- Nuclear Power
- Adult Entertainment
- Genetically Modified Organisms
Protect human and labour rights and the environment Excludes companies that have been involved in significant5 ESG controversies, or are predicted7 to have a high risk of being involved in such incidents in future. Controversies include incidents pertaining to society and the community, employees, the environment, business ethics, and the operations, products, and services of the company. The Certification Symbol signifies that a product or service offers an investment style that takes into account certain environmental, social, governance or ethical considerations. The Symbol also signifies that the VicSuper Socially Conscious investment option adheres to the strict operational and disclosure practices required under the Responsible Investment Certification Program for the category of Superfund Option. The Certification Symbol is a Registered Trade Mark of the Responsible Investment Association Australasia (RIAA). Detailed information about RIAA, the Symbol and the VicSuper Socially Conscious investment option's methodology and performance can be found at responsiblereturns.com.au, together with details about other responsible investment products certified by RIAA.6
1 This criteria applies to equities only.
2 The Global Industry Classification Standard (GICS) is an industry taxonomy developed in 1999 by MSCI and Standard & Poor’s (S&P) for use by the global financial community.
3 Companies who demonstrate that they are transitioning to clean energy may remain investable.
4 Materially means the company generally derives greater than 5% revenue from the activity.
5 For equities, companies with a “Severe” controversy score are excluded. For fixed interest, companies with an MSCI controversies score of 0 are excluded.
6 The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.
7 Companies with an ESG rating below a specified threshold will not be selected for investment.
What investment methodology is applied to equities?
Realindex1 Investments is the manager of the Australian and international equity investments in the Socially Conscious investment option.
The equity portfolio follows a customised, systematic equity strategy with the composition of the portfolio being reviewed constructed and rebalanced traded by Realindex.
After applying the exclusionary screens in the table above, a combined stock selection and portfolio weighting process is applied to the remaining stocks in the investable universe.
In this process, companies are selected and weighted in order to favour companies with good financial quality, value and momentum. Each of these attributes is measured as a composite of several underlying financial metrics.
In addition, an Environmental, Social, and Governance (ESG) signal is incorporated into the process so that firms with better ESG will be preferred. This signal is derived from data provided by external providers, and is made up of an overall ESG score, any change in to this ESG score, and the occurrence of recent ESG incidents.
1First Sentier Investors Realindex Pty Limited, (RealIndex) ABN 24 133 312 017, AFS Licence 335381, www.realindexinvestments.com.au
What investment methodology is applied to fixed interest?
The fixed interest component of VicSuper’s Socially Conscious investment option invests in a range of securities. For Australian fixed interest, where the option invests in company issued securities, VicSuper is invested in an ESG Australian bond index fund. For international fixed interest, VicSuper is invested in an ESG Global bond index fund. Both funds implement customised indices. The ESG Australian bond index fund uses a Bloomberg Barclays MSCI Australia 100mn ESG weighted SRI Select Index. The ESG Global bond index fund uses a Bloomberg Barclays MSCI Global Aggregate SRI Select ex-Fossil Fuels Index (AUD hedged). Both apply very similar exclusions those applied to equities investment including non-government securities associated with fossil fuels, alcohol, tobacco, gambling, adult entertainment, genetically modified organisms, military weapons, civilian firearms and nuclear power, as well as companies with an MSCI controversies score of 0. In addition, the ESG Global bond index fund excludes Treasury and Government-related issuers with an MSCI ESG Government rating below BB1.
For detailed information on the Bloomberg Barclays Index exclusion methodology and ESG weighting methodology see:
1 Countries are rated using MSCI’s ESG Government rating methodology. MSCI ESG Government ratings identify a country’s exposure to and management of environment, social and governance risk factors.
What is ESG Integration?
The Principles for Responsible Investment (PRI) defines ESG integration1 as the systematic and explicit inclusion by investment managers of environmental, social and governance factors or issues into traditional financial analysis.
ESG Integration requires the consideration of qualitative and quantitative ESG information in investment processes, with the objective of enhancing investment decision-making. ESG analysis is used to inform economic analysis and industry analysis. It includes analysing how ESG issues can affect a company or an assets financial value by affecting costs, revenues and business growth assumptions.
1 PRI Reporting Framework 2018
What are the investment features?
What companies is the Socially Conscious investment option invested in?
1. The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.
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