23 December 2019
3 min read

We think long and hard about every investment decision we make. But did you know we put just as much effort into the way we run our business? From our recruitment practices to our business operations, everything we do is aligned with the principles of the Australian Ethical Charter.

The Australian Ethical Charter has been unchanged since 1986 and guides every investment decision we make. But as well as being part of our investment process, the charter also shapes the way we operate as a business. That includes the way we recruit our staff, the service providers we choose and the decisions we make when we operate our funds. In October we released our 2019 Sustainability Report which lays out how we run our business and how we measure our impact. Here are some of the highlights of the report.

Our low carbon footprint

We carefully monitor our carbon emissions. This includes the carbon footprint of our share investments as well as our operational carbon emissions. The carbon intensity of our share portfolio is 70 per cent less than the benchmark (a method of comparing investment returns and performance). We also invest six times more in renewable power than the global share market. We completely offset all of our operational emissions, which include the day-to-day operations of our office and transport for our employees. If you want to see how you can reduce your own carbon footprint by investing with Australian Ethical you can experiment with our Carbon footprint calculator. For a detailed explanation of our carbon footprint you can check out our 2019 Taskforce on Climate-Related Financial Disclosures Report.

A diverse and engaged workforce

Each year we run an employee engagement survey that tells us where we’re doing well and where we need to improve. In 2018-19 we achieved a score of 71%, maintaining our top quartile position in the Aon Hewitt Best Employers 2019 survey. Part of the reason for our high engagement is our Culture Club, which is made up of a cross-section of our employees. This group meets monthly to discuss how to keep staff engaged, enthusiastic and performing at a high level.

Building a diverse, inclusive workforce that reflects the whole of society is an important contributor to our success as a business. In 2017-18 we became one of the few companies listed on the ASX with 50:50 gender equality at the Board level, and the Board is currently 60% female. We’ve also increased the ratio of our senior management team to 44% female, and our overall workforce balance is 52% female. To demonstrate our beliefs, we actively participated in International Women’s Day, wore rainbow colours for International Day against Homophobia, Biphobia, Interphobia & Transphobia, ‘Wore it Purple’ in support of the LGBTIQ community, and held our own diversity and inclusion day to celebrate the unique backgrounds and abilities of all our employees.

Our ethical supply chain

Every company we invest in is carefully assessed to determine their alignment with the environmental and social principles of the Australian Ethical Charter. The same goes for our service providers. That includes our material service providers who provide our tea and coffee as well as Powershop, a company we invest in, which powers our office with renewable energy. We also work use investment services providers to help us manage your money ethically. These include:

  • Mercer: super fund administrator
  • Metlife: insurance to super fund members
  • Boardroom: registry provider for managed funds
  • National Australia Bank: custodial services, banking and lending facilities
  • KPMG: auditors

Larger companies we do business with or invest in must avoid contributing to breaches of human rights. We scrutinise companies with large supply chains in countries with a poor record on human rights or worker protection. We focus on the way influential companies monitor overseas workplaces, including for potential use of child labour. For example, we have chosen not to invest in several clothing and electronics companies because of human rights concerns. We voluntarily comply with the Modern Slavery Act which came into effect on 1 January 2019.

We’re profit-for-purpose

B Corporations are leading a global cultural shift towards a more sustainable economy by balancing profit with purpose. In 2014 we became the first publicly listed Australian company to become certified as a B Corp, and since then we have been named as a ‘Best for the World: Governance’ honoree every year running. That means we have scored in the top 10% of B Corps globally in the rigorous Governance section of the B Impact Assessment. This section evaluates a company’s overall mission, ethics, accountability and transparency.

As required by our Constitution, we donate 10% of our annual profits (after tax and before bonuses) to the Australian Ethical Foundation. The Foundation then allocates this funding to charitable organisations and social impact initiatives aligned with our three ethical pillars: the planet, people and animals. In 2018-19 we provisioned $937,000 for the Foundation which included $360,000 for our 20 Community Grants recipients.

An ethical and sustainable business

Our ethical approach encompasses everything we do as a business, from our investment process to the way we recruit, train and engage our staff. It includes who we will and won’t do business with, our governance practices and our carbon footprint. You can learn more about the way we run our business – including a detailed explanation of our investment process and our ethical approach – in our 2019 Sustainability Report.