Our investment manager Russell Investment’s has a long-term strategy to address environmental, social and governance issues. “We believe that responsible investing and performance can be complementary. Our responsible investment solutions aim to capture the right exposure without jeopardising return.” This document sets out Russell Investments’ approach to responsible investing.
Ensuring members’ funds are invested responsibly is a concern for the trustee’s directors, as it is for many members. This section details our approach as we navigate this important but complex issue. It also brings together a range of discussion documents and news items on responsible investment from around the world.
Investing for the futurePosted 22 November 2018
Promoting good stewardship practices through active ownershipPosted 21 November 2018
Being an active owner is central to Russell Investments’ commitment to responsible investing. Its active ownership activities aim “to promote changes that protect and enhance shareholder value and shareholder rights”. The company’s approach to active ownership incorporates proxy voting, corporate engagement and participating in groups dedicated to environmental, social and governance issues. The company reports annually on these activities which support its commitment to the United Nations Principles of Responsible Investment and other stewardship codes.
Read Russell Investment's Responsible Ownership: Engagement Report 2017
Investments in tobacco and nuclear weapons excluded from UniSaver portfolioPosted 18 September 2018
Since 2017, our portfolio has excluded investments in companies that manufacture tobacco products or nuclear weapons. This followed a decision by our investment manager, Russell Investments, to exclude these types of investments from its global fixed interest (bonds) and equities (shares) portfolios. These portfolios account for around two-thirds of UniSaver’s assets, but it effectively means tobacco and nuclear weapons investments are excluded from the entire exposure. The exclusion, for example, doesn’t extend to Australasian shares, which are managed by third-party managers. However, there are no tobacco companies or nuclear weapons manufacturers listed in New Zealand or Australia, so this isn’t an issue. The two exclusions were in addition to the existing exclusions relating to companies producing anti-personnel mines and cluster munitions.
Targeting the ESG issues that impact performancePosted 18 September 2018
Russell Investments believes there is a strong correlation between how a company addresses environmental, social and governance (ESG) issues and that company’s financial performance. However, they argue that materiality matters. Some ESG factors will be more relevant (or material) to some companies than others. They cite the example of fuel efficiency being more material in terms of investment performance for an airline than, say, for an investment bank. The company has developed a new scoring system for assessing investment opportunities that takes this materiality into account.
Read the Russell Investments article on why materiality matters
The trustee’s investment beliefs constitute the investment philosophy of the scheme and guide the investment of UniSaver’s assets. One of these beliefs is that responsible investment can reduce risk and impact returns positively.
Read more about our investment beliefs in our Statement of Investment Policy and Objectives
Our policy includes not investing in companies involved in the manufacture of cluster munitions, anti-personnel mines, nuclear explosive devices and tobacco.
Read our policy
We require our investment manager Russell Investments to abide by the United Nations Principles for Responsible Investment (UNPRI) when making investment decisions on behalf of UniSaver.
Read more about UNPRI
Russell Investments was one of only 20% of firms to receive the highest possible overall score of A+ from the UNPRI.
Read more about Russell Investments' approach and philosophy