Super is a long-term investment, so we believe it's appropriate to think about the long-term prospects of the investments we make on our members' behalf.
As part of our commitment to sustainability, we ensure that Environmental, Social and Governance (ESG) factors play an important part in TelstraSuper’s decision-making process.
We assess our investments against a range of ESG criteria as determined by our board of directors. These criteria are regularly reviewed and set the rules by which we will or won’t invest in an asset, company or industry. These criteria are informed by our formal Sustainable Investment Policy.
For example, in the past we have decided to divest from (or negative screen) companies involved in tobacco manufacturing and controversial weapons, specifically those identified as being involved in manufacturing cluster munitions and landmines. We also actively look to invest in (or positive screen) a number of sustainable energy projects like wind farms.
TelstraSuper takes climate risk seriously as part of these ESG considerations. We believe the best way to address the risks of Climate Change is through coordinated global co-operation and action. TelstraSuper signed-on to Climate Action 100+ as a participant which is an investor initiative launched in 2017 to encourage the world’s largest corporate greenhouse gas emitters to take necessary action on climate change. Details of our position on climate change are available in the TelstraSuper Climate Change Statement.
Our commitment to effective stewardship
We’re a signatory of the Australian Asset Owner Stewardship Code (Code). This is in line with our belief that effective stewardship is vital to protecting and enhancing long-term value for our members.
The voluntary Code was developed by the Australian Council of Superannuation Investors (ACSI) in 2018 as a way to increase the transparency and accountability of stewardship activities in Australia. It’s similar to other Codes around the world.
Signing on to the Code simply means we’re committing to more transparency and accountability about the work we do. We also hope to influence the greater investment industry to follow suit. As part of the Code, we publicly report against six key principles. You can find out more in our Stewardship Statement.
Hi, I’m Graeme Miller and I’m Chief Investment Officer at TelstraSuper.
While TelstraSuper considers many things before we invest your money, today I’m sharing a quick overview as to how we approach responsible investment – what we call ESG considerations.
You might have heard the term ESG before:
E stands for environmental – so the effect a company has on the natural environment
S stands for social – such as how a company manages relationships with its employees and the wider community
And G stands for Governance - such as the company’s leadership team, audits and shareholder rights
We believe thinking about ESG is not only important to be a good corporate citizen, but it’s also important to our investment returns. This is because companies that act in a responsible way tend to succeed financially better than those that don’t.
TelstraSuper considers ESG factors for the life of our investment. We also require external fund managers we use to do the same – and we have a process to regularly check that they do.
TelstraSuper also has a number of other measures in place to assist us in being a responsible investor. This includes: deciding not to invest in certain industries that we feel have poor ESG credentials – for example tobacco manufacturing companies, or companies making controversial weapons such as cluster bombs and land mines. And actively investing in industries that we feel do have good ESG credentials. For example we hold significant investments in clean energy such as solar and wind farms.
We’re working hard so that our investment approach remains consistent with our beliefs on responsible investment to help achieve the best financial outcomes for you. You can find out more by visiting the TelstraSuper website.
Getting the right peopleWe carefully evaluate and assess all of our investment managers’ ESG capabilities, practices and policies prior to their appointment and then review these on an ongoing basis.
Manager appointment process
As part of our new manager appointment process, whether in-house or external, there are provisions contained within the investment agreement which require each manager to have due regard to ESG factors as part of their investment processes.
In our experience, when investments are made having considered ESG factors, these tend to be better investments, have less risk and often deliver better outcomes for our members.
Direct engagement to influenceWe’re a shareholder in thousands of Australian and global companies and take an “active” ownership position – including exercising our voting rights.
Taking an active ownership stance
Taking an active ownership position means that we can engage with the companies we invest in and vote on decisions at their company meetings.
We can choose to exercise our voting rights on decisions impacting issues such as climate change, gender diversity, human rights and labour supply chain, or executive remuneration. In 2017, we exercised our vote at over 1,500 meetings.
For example, we may choose to exercise a vote against an increase in director/executive remuneration if we feel a company has not behaved in an appropriate way or fallen short of our ESG expectations.
Our proxy voting policy is publicly available and we report annually on our proxy voting activity.
Collaborating to get better outcomesTelstraSuper has a number of strategic partnerships and regularly works with the wider industry to build our influence.
The Principles for Responsible Investment
Originally set up by the United Nations, the PRI develops and implements global principles for the incorporation of ESG issues into investment analysis and decision-making.
As a signatory since 2007, TelstraSuper is committed to seeking greater disclosure and incorporating ESG issues into our future investment decision-making.
You can find out more about the Principles and the implementation process at unpri.org
The Australian Council of Superannuation Investors
TelstraSuper is an active member of the Australian Council of Superannuation Investors (ACSI). ACSI members collaborate to achieve genuine, measurable and permanent improvements in the ESG practices and performance of the companies they invest in.
As part of the partnership, we have adopted the ACSI Governance Guidelines when determining our voting instructions; however we may take an alternate position if we believe that it’s in the long-term interest of our members.
We also subscribe to the ACSI Australian Proxy Voting Alert Service. Areas of engagement focus include:
- Climate change
- gender diversity
- human rights and labour supply chain
- executive remuneration
- culture and whistleblowing.
You can read more about ACSI and current projects at acsi.org.au
Climate Action 100+ participant
TelstraSuper signed-on to Climate Action 100+ as a participant in December 2019. Climate Action 100+ is an investor initiative launched in 2017 to encourage the world’s largest corporate greenhouse gas emitters to take necessary action on climate change. More than 370 investors with over $US41 trillion in assets collectively under management are engaging companies to:
- Implement a strong governance framework
- Take action to reduce greenhouse gas emissions across their value chain; and
- Provide enhanced corporate disclosures on climate related matters
Read more about Climate Action 100+.
Investing in the futureWe actively invest in clean energy infrastructure opportunities such as wind and solar electricity generators.
Here’s just a few of the projects we are invested in for our members:
AGL renewable energy sources in Australia
We are invested in the Powering Australian Renewables Fund, a landmark partnership with AGL to develop, own and manage approximately 1,000 megawatts (MW) of large-scale renewable energy infrastructure assets.
1 MW of energy is equivalent to 1 million watts. To put this in context, most household appliances use between 3000 and 6500 watts of electricity annually.
This includes investment in projects like the 453 MW Coopers Gap Wind Farm project at Cooranga North, approximately 250 kilometres north west of Brisbane. The Cooranga North project will be the largest wind farm in Australia upon completion.
Other projects include the 102 MW Nyngan and 53 MW Broken Hill solar plants and the 200 MW Silverton Wind Farm in western New South Wales.
Wind and solar portfolios globally
TelstraSuper is also invested in a number of ESG influenced global projects, some of which include:
- A 1.6 gigawatt (GW) portfolio of wind and solar generation facilities across the U.S. serving as a platform for the continuing acquisition and management of wind and solar projects in North America.
- A global developer and operator of utility-scale solar projects globally. with 690 MW of installed capacity across France, Italy, Spain, Puerto Rico, Japan, Chile, the UK and South Africa with ~687 MW of additional projects in construction and development stages in Japan, Puerto Rico and Chile.
- The third largest generator of onshore wind energy in the UK and the largest non-utility owner of onshore wind energy in the UK. The current portfolio comprises 34 wind farms in the UK with a total capacity of 689 MW.