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Disclaimer:
3. Emissions intensity of Australian Ethical share investments compared to benchmark of S&P ASX 200 (for Australian shareholders) and MSCI World ex Australian Index (for international shareholders). Calculated at 31 December 2017.
4. Since 1 July 2016 we have been free from all companies whose main business is fossil fuels, as well as diversified companies that earn some fossil fuel revenue aren’t creating positive impact with their activities. We may invest in a diversified company which is having a positive impact in other ways such as producing renewable energy, providing its fossil fuel revenue is sufficiently low (a maximum of 5% to 33% depending on the fuel).
5. A report by PAX and the International Campaign to Abolish Nuclear Weapons (ICAN) noted Australian Ethical as the only Australian firm to make it on the ‘Hall of Fame’ list. (Do not invest in any nuclear associated companies and applied no revenue threshold for companies for manufacture of weapons, uranium mining, and nuclear generation).
7. Proportion of our share investments in renewable power generation compared to global share market. 

The carbon footprint of our investments is one way to check the effectiveness of our ethical investment approach to manage climate risk and support the transition to zero-emissions. The carbon footprint of our share investments at the end of 2017 was a third of the market benchmark*.  

At a sector level, this comes from our very low exposure to high emission industry sectors such as mining, and our significant exposure to low emission sectors such as healthcare and information technology (IT).

Our share portfolio is 66% less carbon intensive than the benchmark^

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Our carbon footprint target is net zero emissions

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Estimate the carbon footprint of your lifestyle and investments.

*Carbon footprint and carbon intensity are measured in tonnes CO2 e/AUDm revenue.

The benchmark is a blended bechnmark of S&P ASX 200 Index (for Australian share holdings) and MSCI World ex Australia index (for international share holdings).

We assess our share investment footprint based on the carbon intensity of the companies we invest in. The carbon intensity is calculated from direct and some indirect emissions of the companies relative to their revenue. The portfolio carbon intensity has been assessed by Trucost, part of S&P Global, that provides analysis of carbon and other environmental impacts of companies and portfolios. The analysis of Trucost is copyright © 2018 S&P Trucost Limited.

Current carbon footprinting methods don’t do a good job of including emissions produced, or emissions saved, from use of a company’s products by customers. This means that the carbon footprint of a company can misrepresent the company’s positive and negative climate impacts. For example, the footprint of a coal mining company generally doesn’t include the emissions from the burning of its coal by its customers. And the footprint of a company manufacturing wind turbines doesn’t generally include the emissions savings enjoed by its customers and the planet from generation of zero emissions electricity. We take these limitations of footprinting into account when we interpret footprint data for individual investments and our broader portfolio. 

^ Assured by KPGM

Our investment in sustainable impact

Sustainable impact revenue per $1 million invested Investment examples Sustainable impact examples Contributing to Sustainable Development Goals
Alternative energy

$23,670
9 times market

JA Solar
Contact Energy, Infigen Energy Mercury NZ

Wind, geothermal, solar, and hydro electricity

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Energy efficiency

$14,800
4 times market

East Japan Railway
Flecther Building
Valeo S.A.
NEC Group

Low emissions transport
Technologies for more efficient fuel and power use

Green building

$5,940
2.5 times market

Lendlease
Stockland
Mirvac

Certified green buildings
Sustainable water $3,440
6 times market

Xylem Inc
Veolia Environment
United Utilities Group Plc

Water supply, treatment and recycling

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Pollution prevention $16,460
6 times market
Sims Metal Management
Darling Ingredients
Cleanaway Waste Management
Waste treatment and recycling
Purification of auto exhaust gas
Nutrition $0
0 times market
We continue ot look for listed companies aligned with our Ethical Charter and improving affordable access to nutrition.

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Affordable real estate $1,750
2 times market
Lendlease
Barratt Developments
HCP, Inc 
Low-income residential and senior housing
Major disease treatment $3,190
1 times market*
Resmed Inc
CSL Limted
Amgen Inc.
Antibiotics
Vaccines
Hepatitis and breathing treatments
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Sanitation $2,190
1.5 times market
Essity Aktie.
Toto Ltd
Fortune Brands

Baby care, feminine care, wound care and other hygiene products
Plumbing products

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SME finance $1,070
3 times market
Intesa Sanipaolo SPA
Skandinaviska Enskilda Bansken
SME lending and leasing E_SDG goals_icons-individual-rgb-08.png
Education $570
12 times market
Pearsons Plc
Seek Limited
Digital learning tools for teachers, learners and researchers E_SDG goals_icons-individual-rgb-04.png

The revenue estimates in the table are for selected positive products and services which are produced by Australian and international companies whose shares we invest in and that have analysed by global research firm MSCI ESG Research LLC for their “sustainable impact”. MSCI ESG Research have done this analysis for 87% of our share investments (by value). We assume that the $1 million is invested in listed shares of these companies only. We do not take account of our other investments such as fixed income, unlisted investments or our investments in companies which are not analysed by MSCI ESG Research for sustainable impact. Since they only look at selected products and services, MSCI ESG Research’s analysis of revenue from sustainable impact does not take account of all positive contributions that companies make to the SDGs. The MSCI ESG Research calculation methodology makes many assumptions, further information is available here: msci.com/esg-sustainable-impact-metrics. MSCI ESG Research exclude any sustainable impact revenue of companies which do not meet certain minimum ESG standards. However, we have adjusted their calculations to include sustainable impact revenue of companies excluded only because the companies have not been assigned an ESG rating by MSCI ESG Research.

Using the MSCI ESG Research analysis we estimate our total sustainable impact to be 3.4 times the sustainable impact of investment of the same amount in the overall sharemarket. This estimate is based only on investment in shares in companies which MSCI ESG Research analyse for sustainable impact. The overall sharemarket is a blend of the S&P ASX 200 Index (for Australian share holdings) and the MSCI World ex Australia Index (for international share holdings). The above analysis is based on our share investments as at 31 December 2017. Although we have used company research data provided by MSCI ESG Research, MSCI ESG Research is not responsible for the way in which we have used that data to calculate the above amounts. MSCI ESG Research accept no liability for any errors in their data or for our reporting and use of their data.

*Many of the healthcare companies we invest in focus on research to develop new medical therapies (i.e. before commercialisation and revenue generation) and this impact is not yet reflected in disease treatment revenue.