Growth (Lower Carbon) investment option

In addition to the above general approach to responsible investment, the Growth (Lower Carbon) investment option targets a lower exposure to carbon emissions and fossil fuels (relative to Growth and to the market index) through underlying investments in the Russell Investments Sustainable Global Shares ex Fossil Fuels Fund and the Russell Investments Global Bond Fund. This investment option provides an option for members who prioritise both a longer investment horizon and an additional focus on lower carbon emissions and renewable energy.

The Growth (Lower Carbon) option underlying fund composition is as follows:

• 80% in the Russell Investments Sustainable Global Shares ex Fossil Fuels Fund. This fund aims to reduce exposure to carbon emissions by 60% versus the MSCI ACWI ex-Australia Index and eliminate exposure to fossil fuel reserves.
• 20% in the Russell Investments Global Bond Fund. This fund does not exclude fossil fuels but does target a carbon footprint that is 20% less than the market index for the corporate debt portion of the fund (acknowledging the difficulty in measuring the carbon footprint of sovereign bonds).

Specifically, the Russell Investments Sustainable Global Shares ex Fossil Fuels Fund seeks to exclude companies that:

• Have fossil fuel reserves.
• Have significant involvement in fossil fuel-related activities, being companies that derive more than 10% of revenue from thermal coal extraction or power generation from coal.
• Have significant involvement in oil and gas-related activities, being companies that derive more than 10% of revenue from oil and gas exploration, production, refining, transportation and/or storage or that are part of these Global Industry Classification Standard subsectors:
  • Integrated oil and gas.
  • Coal and consumable fuels.
  • Oil and gas drilling.
  • Oil and gas exploration and production.

The Russell Investments Sustainable Global Shares ex Fossil Fuels Fund also has exclusions relating to tobacco and armaments similar to the other UniSaver investment options and consistent with the trustee’s general approach to responsible investing.

Russell Investments’ approach and philosophy

Russell Investments incorporates responsible investing practices into its manager evaluation process, portfolio management, advisory services and portfolio implementation. Their responsible investment beliefs and practices are outlined in Our Responsible Investing Practices [PDF, 4.7 MB] [external link].

Russell Investments is committed to researching, measuring, reporting and considering climate change risks and opportunities as integral parts of the investment practice and of business operations more generally.

Active ownership is the use of shareholder rights to advocate for good corporate governance and improve the long-term value of a company. Russell Investments sees active ownership as a fundamental part of their responsible investing strategy. Active ownership is the use of shareholder rights to advocate for good corporate governance and improve the long-term value of a company. Russell Investments believes that they have a responsibility to exert influence on corporate governance, social and environmental practices through the exercise of proxy voting rights and engagement activities.

In April 2021 Russell Investments committed to achieve net zero carbon emissions for all investment portfolios by 2050 and set the goal of reaching net zero in their own business operations by 2030.  They also joined the Net Zero Asset Managers [external link] (NZAM) initiative. This is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.

Russell Investments is a signatory to the United Nations-supported Principles for Responsible Investment (PRI) and is recognised as a Responsible Investment Leader 2023 by the Responsible Investment Association Australasia [external link] (RIAA).

Russell Investments is a founding signatory to New Zealand’s inaugural stewardship code [external link]. The code establishes a clear framework for investors to engage on environmental, social and corporate governance issues and consideration of an ao Māori worldview.