New South Wales Treasury Corporation - Investment Stewardship

Investment Stewardship

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

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

TCorp’s Investment Stewardship Policy is underpinned by a belief that understanding and managing ESG issues is critical to achieving sustainable investment outcomes.
 
We adopt the following principles in how we manage client portfolios:
  • We are effective stewards of the assets entrusted to us, thereby supporting the NSW Government in delivering on its promises to the people of NSW
  • We identify, evaluate and manage the exposure and impact of ESG factors to drive better risk-adjusted returns
  • We are “active owners” of our investments in order to protect and enhance long-term value.

Download TCorp’s policy on Investment Stewardship

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Pillars of investment stewardship

TCorp’s approach to investment stewardship is informed by global best practice. 

Integration

Engagement

Proxy Voting

Collaboration

Disclosure

Integrate ESG factors into investment decision making

Engage with entities to ensure investment and ESG risks and opportunities are being managed

Exercise ownership rights

Work with industry participants to strengthen the system

Transparency for our clients and stakeholders

Collaboration

We collaborate to promote our client’s interests and to encourage the development of industry best practice standards to foster a sustainable and robust financial system. TCorp is a member of the following collaborative ESG initiatives:

  • Investor Group on Climate Change - a collaboration of Australian and New Zealand investors focusing on the impact that climate change has on the financial value of investments
  • Australian Sustainable Finance Initiative - a collaboration of Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies and academia working together to develop a Sustainable Finance Roadmap for Australia
  • Thinking Ahead Institute (TAI) - a global not-for-profit group whose aim is to influence change in the investment world for the better by improving the provision of savings. Members comprise of asset owners and investment managers that are motivated to influence the industry for the good of savers worldwide. TCorp is a member of TAI and an active participant on working groups
  • NSW Sustainable Finance Steering Committee. 

Climate Change

Academic and industry evidence indicate that climate change is expected to have an impact on investment portfolios over the long term. TCorp recognises the importance of governance, strategy, risk management and disclosure in addressing climate related risk as reflected in the Task Force on Climate-related Financial Disclosures recommendations. 

TCorp will undertake additional analysis across portfolios to identify, assess and manage climate related risk with the objective of managing risk adjusted returns. We expect our investment managers and advisors to identify and assess climate related risks and to manage them accordingly. Activities undertaken to assess and manage climate impact on portfolios may include but are not limited to:

  1. Understanding the climate change and carbon management strategies of carbon intensive exposures across the portfolio, and their potential to reduce emissions
  2. Analysing the resiliency of real assets given the anticipated physical impacts of climate change including acute and chronic risks
  3. Considering the energy, water and waste efficiency of assets in the portfolio
  4. Assessing the viability and valuation of fossil fuel reserves, given the transition to a low carbon economy (e.g. stranded assets risk)
  5. Assessing the impact on portfolios under various climate change scenarios.