Posted 26 July 2022
The conflict in Ukraine has been deeply concerning and upsetting for many, and the impact on human life is devastating. At this very difficult time, our thoughts are with the Ukrainian people, their families and loved ones across the world.
In March this year, our Board committed to divesting from Russian-owned assets, now and for the foreseeable future.
We made this decision based on the increasingly volatile Russia-Ukraine conflict; escalating Russian sanctions; and to be in line with the federal government expectations that super trustees divest their Russian holdings.
In making this decision, we considered some key questions: “What would our members expect us to do? And what are the longer term effects of divestment from Russian assets on future returns?”
Our primary responsibility is to focus on the best financial interests of our members. Environmental, social and governance (ESG) issues have financial impacts, and are taken into consideration when building and managing our investment strategy and deciding on appropriate courses of action. It is with this in mind that we believe divestment is the right thing to do.
Objectively, the financial impacts to our investments are negligible. As at 24 February 2022 (the day the invasion of Ukraine commenced), the fund’s direct exposure to Russia was very small – estimated at $11m (0.09%) of the fund’s total assets.
Our investment managers who hold Russian assets on our fund’s behalf need time to divest given the current global sharemarket conditions. Both the New York Stock Exchange and London Stock Exchange have temporarily halted the trading of Russian-based companies listed on their exchanges. It is unclear when these markets will reopen.
With the understanding that this process is lengthy and likely to have its challenges, we will continue to work closely with our investment managers to achieve full divestment as soon as practicable.
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If you have any questions, please call us on 1800 023 928 between 8am and 7pm (AEST), Monday to Friday.