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 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 issues to VicSuper by Challenger, to fund payments to members who select these products. VicSuper does not itself provide a guarantee.
VicSuper’s Socially Conscious investment option incorporates a wide range of 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, controversial 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 screen apply only to the Australian and international equities and Australian 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.
The following table outlines the exclusionary screens applied to the equities and Australian fixed interest:
| Socially Conscious - environmental and social objectives |
| Take action on climate change |
Excludes investment in companies:
- with coal, oil and/or gas reserves used for energy purposes
- deriving 30% or more revenue from mining of thermal coal or thermal coal based power generation1
- whose principal business revenue is derived from direct fossil fuel activity in the following GICS2 sectors: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Equipment & Services.1,3*
|
| Minimise social harm |
Excludes investment in companies materially4** involved in:
- Tobacco
- Alcohol
- Gambling
- Military weapons (cluster munitions, landmines, depleted uranium, biological/chemical1, nuclear, conventional)
- Civilian Firearms
- Nuclear power
- Adult Entertainment
- Genetically modified organisms
|
| Protect human and labour rights and the environment |
Excludes companies that have found to not be adhering to international norms represented by the:
- UN Declaration of Human Rights
- ILO Declaration on Fundamental Principles and Rights at Work, and
- UN Global Compact.
Excludes companies that have been involved in significant^ environmental, social and governance controversies.
|
*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** Material means the company generally derive greater than 5% revenue from the activity.
^5 MSCI Controversies score of 0.
The equities component of VicSuper’s Socially Conscious investment option invests in companies sourced from a custom index designed for VicSuper. The custom index combines the MSCI Global Fossil Fuels Exclusion Index and the MSCI Global Socially Responsible Index plus an additional fossil fuel direct activity screen. After applying the exclusionary screens listed above, a best‐in‐class selection
1 process is applied to the remaining equities in the selection universe.
For detailed methodologies and criteria for the applicable MSCI Indices see:
The additional fossil fuel direct activity based screen excludes companies that operate in the following GICS*
2 sub-sectors: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Equipment & Services.
1 Companies are rated using MSCI’s ESG rating methodology. MSCI ESG Ratings identify companies that have demonstrated an ability to manage their ESG risks and opportunities. Companies with an ESG ratings score below a specified threshold will not be selected for investment
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.
The Australian fixed interest component of VicSuper’s Socially Conscious investment option invests in a range of securities. Where the option invests in company issued securities, VicSuper is invested in an ESG bond index fund. This fund applies the same exclusionary screens as the MSCI Global Socially Responsible Index through a customized Bloomberg Barclays MSCI Australian Socially Responsible (SRI) and ESG-weighted Index but does not apply an additional fossil fuel direct activity screen. After applying the exclusionary screens listed in the table above, an ESG tilting process is applied to the remaining issuing companies. This is achieved by over-weighting issuers with high and/or improving MSCI ESG ratings and under-weighting those with lower and/or declining ESG ratings.
For detailed information on the Bloomberg Barclays Index exclusion methodology and ESG-weighting methodology see:
# Companies are rated using MSCI’s ESG rating methodology. MSCI ESG Ratings identify companies that have demonstrated an ability to manage their ESG risks and opportunities.
The Principles for Responsible Investment (PRI) defines ESG integration
1* 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
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