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Active ownership

As a shareholder in hundreds of Australian and international companies, we take our responsibility seriously and work actively with the companies in which we invest to improve their environmental, social and governance (ESG) practices.

LGS is committed to being an active owner of our investments. We believe that by working with the superannuation industry and engaging with companies on environmental, social and governance practices, we can minimise risks for members, maximise member returns and make a difference to society.

Strategies we use to influence change include:

votes

Proxy voting

We hold shares in the majority of top listed companies in Australia and overseas. As a shareholder we are entitled to undertake proxy voting at the shareholder meetings of most of the ASX200 companies and approximately 500 of the world’s largest listed companies.

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We vote at shareholder meetings because we believe that it is important to fulfil our ownership obligations and rights that come with being a long-term shareholder. We use the recommendations of the Australian Council of Superannuation Investors and CGI Glass Lewis to guide our voting at shareholder meetings and publish our voting decisions before company meetings.

For more information on proxy voting at LGS:


Company engagement

To help minimise risks and promote long-term shareholder value, we engage with the companies we invest in through a variety of channels.

These channels include:

Our aim is to increase awareness and understanding of current and future ESG issues, improve governance standards and encourage greater disclosure.


Industry collaboration

We believe that by working with other investors on key ESG issues, we will have a much greater impact on company activities and their long-term performance.

Industry groups and initiatives that we are involved with include:

Principles for Responsible Investment (PRI)

pri3LGS has been a signatory to the United Nations Principles for Responsible Investment (PRI) since 2007. The PRI initiative is an international network of investors working together to incorporate sustainability issues into investment decision making and ownership practices.

As a PRI signatory we publish an annual report that details our processes and progress on implementing responsible investment.


Australian Council of Superannuation Investors (ACSI)

acsiLGS is a founding member and Board representative for the Australian Council of Superannuation Investors (ACSI). ACSI provides independent research and advice to super funds to manage ESG investment risks.


Investor Group on Climate Change

igcc2LGS is a founding member and management committee representative for the Investor Group on Climate Change (IGCC). The IGCC aims to:

  • raise awareness about the potential impacts of climate change to the investment industry, corporate, government and community sectors
  • facilitate the inclusion of climate change impacts in investment analysis and decision making by the investment industry.

Responsible Investment Association Australasia (RIAA)

riaaLGS is a long-standing member of the Responsible Investment Association Australasia (RIAA), the peak industry body representing responsible and ethical investors across Australia and New Zealand.


Task Force on Climate-related Financial Disclosures (TCFD)

TCFD LGS is a supporter of the Task Force on Climate-related Financial Disclosures (TCFD), an initiative that has developed climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers and other stakeholders. The TCFD framework aims to facilitate the measurement of physical, liability and transition risks associated with climate change and enable companies to show how they are responding to these risks.


Asset Owner Disclosure Project (AODP)

AODP3LGS actively supports the Asset Owner Disclosure Project (AODP), an initiative that aims to protect asset owners from the risks posed by climate change through improved disclosure and industry best practice.

LGS was ranked number one in the 2017 AODP ‘Global Climate 500’ index. The index assesses how the world’s biggest investors, including superannuation funds, are managing the risks and opportunities associated with climate change.


CDP initiative

cdpLGS is a signatory to the CDP initiative. This initiative provides investors access to company greenhouse gas emissions and water usage data as well as management strategies for climate change, water and deforestation risks.


Portfolio Decarbonisation Coalition

pdcLGS joined the Portfolio Decarbonisation Coalition (an initiative led by the United Nations Environment Programme Finance Initiative and CDP) in 2015. The coalition commits signatories to reduce the carbon intensity of their investments and provides knowledge exchange and stakeholder dialogue opportunities.


Divestment

As a last resort we will divest from companies that have not implemented change with regard to their ESG risks. This minimises our exposure to ESG risks that may have a material impact on a company’s financial performance and ultimately, member returns. We believe that the act of divestment sends a signal to companies about their activities and the need for change.


Transparency

We disclose comprehensive information about our responsible investment practices to raise awareness about how we manage our members’ retirement savings.

This includes annual reporting through the Principles of Responsible Investment and Montreal Carbon Pledge and participation in sustainability benchmarking surveys including the Asset Owners’ Disclosure Project, RIAA Responsible Investment Benchmark, GRESB and Infinity by SuperRatings.

Principles of Responsible Investment Transparency Report, 2017


Any questions?

If you have any questions about our active ownership practices, please send us an email.

 


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