Our trustee believes the integration of sustainable investing concepts, often referred to as environmental, social and governance (ESG) factors, has an influence on the long-term investment outcomes of the fund. We therefore consider these factors when determining the fund’s investment strategy.
As the trustee outsources the implementation of its investment strategy to external investment managers, it is expected that each investment manager will have regard for ESG factors, if they believe these will have a meaningful impact on investment performance.
Each investment manager may have its own policy on the extent to which labour standards or environmental, social and ethical issues are taken into account when making investment decisions. The policies of each individual manager are considered when selecting managers and monitoring their management of ESG factors and risks.
When considering the fund’s investment strategy, the trustee has determined that it will not invest in (i.e. apply a 'negative screen' to) companies whose primary purpose is tobacco manufacturing or production of controversial weapons, based on the trustee’s agreed screening application.
The trustee’s decision not to invest in these companies is for both financial and social reasons. These exclusions apply to the fund’s direct holdings in listed shares and fixed interest portfolios. For indirect holdings, such as derivatives, unit trusts and structures like exchange-traded funds, the trustee does not maintain the same degree of control over individual investments, therefore these exclusions may not apply to these investments.
As an investor on behalf of our members, the trustee believes that climate change presents both risks and opportunities for our fund. We believe we have an important role to play with respect to climate change through our investment decision-making. Read our climate change position statement.
We are continuing to develop our framework and approach to climate change, which includes how we can improve the resilience of the fund’s assets, monitor and mitigate against climate change-related risks and invest in opportunities that make a positive difference in this area.
We aim to report against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) framework, outlining the ways in which we seek to monitor, assess and manage investment-related climate risks. You can read more about this reporting in our most recent Annual Report.