Investment Stewardship

What we do today will shape our future - our approach to Investment Stewardship

Investment stewardship covers the management of environmental, social and governance (ESG) risks and active ownership of the companies to which TCorp’s clients have exposure.

TCorp’s Investment Stewardship Policy is underpinned by a belief that integrating ESG factors into the investment process is likely to lead to better outcomes over time compared to an exclusion based approach.

Where exclusions are made, these will be based on government policy (for example, tobacco) or in alignment with Australia or New South Wales convention commitments.

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Pillars of Stewardship

TCorp is targeting global best practice implementation for its Stewardship policy that is based on five “Pillars of Stewardship”.

Integration

Engagement

Proxy Voting

Collaboration

Disclosure

Embedding good stewardship and ESG principles into investment decisions making processes including the way in which investment managers are selected and monitored.

Entering into communication with company management to ensure the ESG risks and opportunities are being identified and managed.

Exercising shareholder rights to promote good corporate governance and management of ESG factors within portfolio companies.

Working together with like-minded investors to pool responses, share information and enhance influence on ESG matters.

Good stewardship starts with a public commitment which is then reported against on a regular basis.

Key Milestones

TCorp is now a member of the following collaborative ESG initiatives:

  • Australian Council of Superannuation Investors - ACSI engages with companies and policymakers with the goal of progressing material ESG issues on behalf of its members.
  • Investor Group on Climate Change - a collaboration of Australian and New Zealand investors focussing on the impact that climate change has on the financial value of investments.
  • We have become a signatory to the Carbon Disclosure Project (CDP) which is a global initiative aimed at requiring companies to disclose information on their greenhouse gas emissions.

Climate Change

Academic and industry evidence indicate that climate change is expected to have an impact on investment portfolios over the long-term. As part of its approach to ESG integration, TCorp expects its investment managers to assess climate change-related risks and opportunities in its investments and to manage them accordingly. This may include, but is not limited to:

  • Reviewing the carbon footprint of investment strategies.
  • Understanding the climate change and carbon reduction strategies of any carbon intensive companies in the portfolio, and their potential to reduce emissions.
  • Analysing the resiliency of any real assets given the anticipated physical impacts of climate change including acute or severe weather incidence.
  • Considering the energy, water and waste efficiency of assets in the portfolio.
  • Assessing the viability and valuation of fossil fuel reserves, given the shift to a low carbon energy mix (e.g. stranded assets risk).
  • TCorp will continue to assess the investment implications of a changing climate as well as collaborate, via industry bodies such as IGCC, to promote orderly transition to a low carbon economy.