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.
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 objectives listed below apply only to the equities component of the investment option while the other asset classes apply an environment, social and governance (ESG) integration approach.
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 or whose principal business revenue is derived from direct fossil fuel activities;
- 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, 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 following table outlines how the option’s equities investments will achieve these objectives:
| 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 generation
- whose principal business revenue is derived from direct fossil fuel activity in the following GICS sectors: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Equipment & Services.*
|
| Minimise social harm |
Excludes investment in companies materially** involved in:
- Controversial weapons (cluster munitions, landmines, depleted uranium weapons, biological/chemical weapons)
- Civilian firearms
- Nuclear weapons
- Tobacco
- Alcohol
- Adult Entertainment
- Conventional weapons
- Gambling
- Genetically modified organisms
- Nuclear power
|
| 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.
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* Companies who demonstrate that they are transitioning to clean energy may remain investable.
** Generally derive greater than 5% revenue from the activity.
^ MSCI Controversies score of 0.
After applying the exclusions listed above, a best‐in‐class selection# process will be applied to the remaining eligible companies in the equities universe. More information about the underlying investment methodology can be found under the next question and answer “What investment methodology is applied”.
# 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.
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. For detailed methodologies and criteria for the applicable MSCI Indices see:
The direct fossil fuel activity based screen excludes companies that operate in the following GICS* sub-sectors: Integrated Oil & Gas; Oil & Gas Exploration & Production; Oil & Gas Refining & Marketing; Coal & Consumable Fuels; Oil & Gas Storage & Transportation; Oil & Gas Equipment & Services.
An ESG integration approach is applied to investments across other asset classes (alternatives, fixed interest and real assets). No special considerations are applied to cash.
Find out more about ESG integration in the question below.
* 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 Principles for Responsible Investment (PRI) defines ESG integration˅ 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.
˅ PRI Reporting Framework 2016 Main definitions.
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