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.
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.
Investments in tobacco and nuclear weapons excluded from UniSaver portfolioPosted 18 September 2018
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
British Universities Superannuation Scheme actively engages on ESG issuesPosted 18 September 2018
Like UniSaver, the trustee of UniSaver’s British counterpart Universities Superannuation Scheme (USS) is bound by a fiduciary responsibility to maximise investment returns to members. However, its trustee is well convinced of the link between risk and return and environmental, social and governance factors. The trustee’s responsible investment strategy focuses on it being an active shareholder. With over £60 billion under management, one can imagine the fund’s sheer size gives it plenty of clout. It focuses on having a “seat at the table” where it can “act as an active and engaged owner who is working to improve standards and pushing companies for positive change, for sustained improvement”.
Read about USS’s approach to responsible investment
Investors use new tool to track carbon performancePosted 18 September 2018
Britain’s Universities Superannuation Scheme (USS) is one of 13 pension funds to sign up to the Transition Pathway Initiative (TPI). The initiative aims “to better understand how the transition to a low-carbon economy affects their investments”. The grouping has developed an online tool that can be used to assess a company’s management quality and carbon performance.
Read about the Transition Pathway Initiative
Access the TPI tool
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