PositiveIMPACT through your super
The PositiveIMPACT investment option is offered to members of MyLife MySuper, MyLife MyPension and Catholic Super. The option consists of an ultra-low carbon portfolio with social, environmental and sustainability-focused assets.
Investments are made into companies, organisations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.
How do we select our investments?
For many years we have applied a comprehensive approach to Responsible Investment across our entire portfolio, and we’ll continue to do so because we think it will enhance long-term results. As a natural outworking of our approach, we have a number of strategies or investments in our portfolio where there is a clear and tangible environmental or social impact. Members in our other Managed Choice options have exposures to these assets in a less concentrated manner.
But we understand that some members wish to invest with a greater concentration on these strategies. The PositiveIMPACT option is designed for those members. We are able to offer it because of our long history of embracing sustainability and social issues within our mainstream options.
What do we currently invest in?
No single asset or project will represent more than around 3% of the total portfolio. Compared to our standard managed choice options, the PositiveIMPACT option will have a narrower set of underlying investments, but it will still be well diversified.
The managers in this option were chosen because they are global leaders among their peers in terms of integrating sustainability into their decisions, or the underlying assets inherently generate environmental or social benefits.
Assets are in the following areas:
Fund managers in the PositiveIMPACT portfolio
Consistent with our overall approach to Responsible Investment within all of our Managed Choice options, we are naturally inclined towards considering investments which have a sustainability theme. To make it into the PositiveIMPACT portfolio, such investments must meet our standard risk/return criteria. By applying these criteria with an open mind, we have found a number of strategies that pass the test. Listed below are the Fund managers in the PositiveIMPACT portfolio:
Co-founded and chaired by Al Gore, Generation is a highly reputable and deeply experienced global share manager that fully integrates sustainability analysis into the decision making process. read more
Their investment philosophy is founded on the principle of stewardship – careful, considered and responsible management of funds. Sustainability is a hallmark of their approach. read more
GEEREF invests in renewable energy projects in developing countries around the world. Not only do these projects generate clean electricity, they also create jobs and efficiencies for local communities, providing enormous social, and development benefits.read more
GEEREF’s assets include:
- windfarms in Tanzania, Ghana, Kenya, and South Africa
- geothermal projects in Ethiopia and Kenya
- solar farms in India, Thailand, Vietnam and the Philippines
- run of river hydro in Georgia
- hydro projects of varying scales in the Philippines, Indonesia and Uganda, and
- rooftop solar in Jordan.
Founded in 2012, their investments include a wide range of energy infrastructure assets including offshore wind, onshore wind, offshore power transmission, biomass and waste to energy, and solar PV investments. Their projects are mainly in Europe, North America and East Asia (Taiwan).
Lighthouse Solar will own solar systems and earn revenue from parties who have contracted to buy electricity generated from these solar systems. This is achieved through entering long-term electricity supply agreements such as power purchase agreements.read more
A social infrastructure fund that invests in a small portfolio of schools here in Australia as well as a hospital in South Australia which will be Australia’s most technologically advanced.
The option is comprised of the following:
- 60% in listed equities, managed by 2 overseas-based managers who are global leaders in terms of integrating sustainability analysis into investment decisions– Generation Investment Management and Stewart Investors. All of this 60% will be invested with a global mandate. There may be a small allocation to Australia from time to time but no dedicated Australian exposure.
- 20% in property, mainly Australia, where managers do rate highly on sustainability dimensions.
- 4% in a private equity portfolio which invests in renewable energy and energy efficiency in developing countries (mainly Asia and Africa).
- 4% in a Solar PV (photovoltaic) fund here in Australia.
- 4% in a renewable energy fund (mainly in Northern Europe and the United States).
- 4% in a private debt fund making loans to small companies with growth ambitions and where sustainability is a key part of the business case.
- 4% in a portfolio which is invested in schools in Queensland and a hospital in Adelaide.
PositiveIMPACT has a return objective which is equal to that of our Balanced option, and a risk which is between that of our Aggressive and Moderately Aggressive options.
We don’t support negative screening (i.e.: automatic exclusion of various stocks due to the nature of their activities, commonly applied to so-called “sin stocks” such as those involved in alcohol, tobacco etc.) because:
- We believe negative screening will achieve very little unless our actions were part of a broad global movement such as the anti-apartheid movement of the 1960s. Indeed, funds who sell sin stocks lose influence over the company concerned. The companies continue to operate in the same way as before. If we’re about achieving change for the better, then staying invested in the company and pursuing change through engagement is a more productive approach. Companies are increasingly prepared to listen to shareholders and have a constructive dialogue across a wide range of issues. Engagement can be slow and tedious but much has been achieved over the last decade through this activity. The only exceptions to this rule are companies which are engaged in businesses which are illegal or in contravention of Australia’s international treaty obligations, or where the underlying business is morally indefensible eg: production of landmines or cluster bombs.
- It entails choosing a particular set of values and it is impossible to get a broad consensus within a fund such as ours with over 76,500 members. Even once the target areas are identified, arbitrary decisions are required relating to the specifics e.g.: do we exclude just tobacco producers or include retailers of tobacco? If the latter, then all retailers or just those with tobacco revenue exceeding 10%.
- Since some of the stocks screened out may offer good investment prospects, it potentially compromises our fiduciary responsibility to act in the interests of our members.
Given we do not explicitly screen, we cannot guarantee that there will never be any exposure to activities of this type. Underlying investee companies may be highly diversified across business lines and geographies and have complex supply chains. However, the philosophy and research process of the two managers in the PositiveIMPACT portfolio (Generation and Stewart) is such that the chances of this are extremely rare and if any such exposure arose it would be miniscule in proportion to the entire portfolio. Furthermore, if inadvertent exposure arose, the managers would quickly address the situation and respond appropriately, although this will not necessarily mean selling of the stock in question. In addition, the portfolio will be focused on companies which meet high standards of behaviour on sustainability dimensions which are much broader than those specified.
There will be no explicit screens in management of the listed equity component of the portfolio. However, the philosophy and process of the managers is such that we wouldn’t expect that there will ever be material exposure to companies involved in these activities.
They invest in companies which are part of the solution to the world’s sustainability challenges, not part of the problem. That being said, the managers will take a holistic approach. For instance, if 99% of a company’s activities are convincing from a sustainability perspective but there is a small subsidiary somewhere doing something which raises question marks, then the attitude would be to consider the stock for inclusion in the portfolio and engage with the company with respect to the 1% to make change. It’s also worth noting that the definition of sustainability will be very broad. That is, it’s not just about a company’s products and direct inputs and not just environmentally focused. Instead, it goes to a wide range of corporate behaviours (supply chain, HR management, community relations, social licence to operate).
We will communicate to our PositiveIMPACT investors with stories about projects and companies that their super is invested in through email and on the PositiveIMPACT stories section of the website. We will also give those in our Facebook community positive environmentally and socially themed stories about the impact of their super.