Where we stand

We avoid climate unfriendly sectors like fossil fuels and target investment in climate friendly sectors. We’re even going further to decarbonise our entire investment portfolio. We advocate for business action and better climate policy. We’re reducing and offsetting our own operational emissions. And we recently won a global award for transparency about our alignment with our climate goals.

Business has a fundamental obligation to respect human rights. The UN Guiding Principles on Business and Human Rights (also known as the ‘Ruggie principles’) make it clear that companies must avoid contributing to breaches of human rights, including through their supply chain or other business relationships.

We don’t invest in operators of offshore detention centres. We closely scrutinise companies with supply chains in countries with a poor record on human rights or worker protection. We look at the way these companies monitor overseas workplaces, including for potential use of child labour. We have chosen not to invest in several clothing and electronics companies because of human rights concerns.

We do not automatically avoid companies operating in countries with a poor human rights record. We look at the way they do business to assess whether they are making a positive contribution to the welfare of ordinary citizens of the country or whether they are supporting or complicit in human rights abuses.

On the positive side, we seek out companies that contribute to human dignity and education and the alleviation of poverty. One of the things that attracted us to the company Interface was its use of discarded fishing nets in developing countries to make modular carpets. As well as reducing waste, this provided financial opportunities to some of the poorest people in the world.

There are exceptions to our investment exclusions. Where a company makes a mistake, we’ll consider if the company has acted to fix the mistake and stop it happening again before we exclude. See case study

Our position is that non-human animals have the capacity to suffer and we should not cause them unnecessary harm. This means we avoid:

• industries that use animals for entertainment and sport. This includes horse and greyhound racing, as well as film and media companies that use wild captive animals in productions
• current systems of animal agriculture. We assess the harm to animals and the environment (including climate) caused by current large-scale commercial animal agriculture is unnecessary because lower impact, balanced plant-based diets can sustain healthy human life. See our position on Agriculture
• cosmetic companies that test their products or ingredients on animals
• healthcare companies that use animals for medical testing unless they meet strict requirements. See our position on Healthcare.

We also support animal protection organisations through our Community Grants program, and advocate for animals in our company engagements and through our public voice (see our positions on ethical influencing and animal wellbeing).

There are exceptions to our investment exclusions. Where a company makes a mistake, we’ll consider if the company has acted to fix the mistake and stop it happening again before we exclude. See case study

These technologies are essential to limit global warming. Not only are they more sustainable than fossil-fuel energy production, they also are job creators and can help alleviate poverty with off-grid and future-proof energy supply.

We invest heavily in companies whose products and services reduce energy demand, such as LED lights, insulation, recycling and smart energy management technology. The efficient use of energy is important because it reduces energy waste: an avoided watt needs no resource at all to be produced.

Our community grants program also provides funds for renewable energy projects in the community. Recent grants supported a solar system at a wildlife rescue centre in Victoria and a technician in East Timor repairing solar panels.

We do not invest in live export companies or companies that raise animals for live export. We also avoid companies that specialise in facilitating the trade e.g. specialist transport companies.

This means we exclude all companies whose main business is fossil fuels, as well as diversified companies that earn some fossil fuel revenue and aren’t creating positive impact with their other activities.

We may invest in a diversified company which is having a positive impact in other ways such as producing renewable energy, provided its fossil fuel revenue is below our thresholds. For example, we assess Contact Energy to be a climate friendly investment, with about 80% of their electricity production coming from renewables in 2019. They earn some revenue from gas, but we think they are worth supporting as they continue to invest in renewables and help us get to 100% clean energy.

Poorly regulated banking and unnecessary financial products and services can cause harm by encouraging excessive borrowing and unnecessary risks and costs. When assessing a bank we look at how:

• the bank assesses environmental and social impacts of businesses when deciding whether to lends to them
• it develops, markets and manages its financial products and services in the interests of customers. We exclude banks which exploit people who are ill-equipped to make prudent financial decisions due to financial distress or inexperience.

However commercial agriculture can also have negative impacts on people, animals and the environment. Therefore, we only invest in sustainable food production. We consider food sustainable and positive under our Ethical Charter if it meets the following criteria:

• forms part of a healthy diet
• is produced in an environmentally sustainable way
• avoids unnecessary harm to humans and animals

We don’t invest in current systems of animal agriculture. We assess the harm to animals and the environment (including climate) caused by current large-scale commercial animal agriculture as unnecessary because lower-impact, balanced plant-based diets can sustain healthy human life.

There are exceptions to our investment exclusions. We think a company with positive products and services can be an ethical investment even though it earns some revenue from a negative product or activity. We continue to review and engage with the company for positive change. 

We may invest in sustainable plantation timber production.

We examine the environmental and animal impacts of any land clearing required to establish plantations, and look for Forestry Stewardship Council certification of the plantations. We do not automatically exclude a company that uses some non-certified timber, as we take into account the availability of certified timber and the positive and negative impacts of a company’s business.

There are exceptions to our investment exclusions. We think a company with positive products and services can be an ethical investment even though it earns some revenue from a negative product or activity. We continue to review and engage with the company for positive change. 

Although production of farmed fish is much less greenhouse gas-intensive than beef and lamb production, it is still significantly more emissions-intensive than sources of plant-based protein such as nuts and beans. It has become increasingly urgent that emissions are reduced across all sectors of the economy to reduce dangerous global warming. Given the availability of lower emissions plant-based sources of protein, we took the view that fish farming is not part of an optimal transition to achieve net zero global emissions.

We originally invested in salmon farmer Tassal on the basis that the production of farmed fish is lower in greenhouse gas emissions than beef and lamb production (and also uses less water). We also thought that aquaculture had the potential to reduce overfishing of wild fisheries. However, in March 2017 we made the decision to divest from Tassal because we were concerned about the sustainability of its feed supply (which includes wild caught fish). We also have concerns about the welfare of the fish and the impact of fish farms on the local environment.

There are exceptions to our investment exclusions. We think a company with positive products and services can be an ethical investment even though it earns some revenue from a negative product or activity. We continue to review and engage with the company for positive change. 

When looking at the mining sector we balance 3 main factors: the value that the mined mineral has to the well-being of society, the harms of the mining process for people, animals and the environment, and whether or not the mineral is a limited resource.

We look not only at the potential positive uses of the mineral, but also whether the amount required for those positive uses could be met from higher levels of recycling and reuse of previously mined material; or whether there are alternative, more sustainable materials which can fulfil the same function. We also consider how good a job the mining sector is doing at minimising its adverse social and environmental impacts.

From this, we generally avoid investment in the mining sector, but there are potential exceptions. We could invest in lithium mining companies which appropriately manage their social and environmental impacts because of the crucial role lithium plays in expanding battery energy storage needed for the transition from fossil fuel to renewable energy.

There are exceptions to our investment exclusions. We think a company with positive products and services can be an ethical investment even though it earns some revenue from a negative product or activity. We continue to review and engage with the company for positive change. 

Our healthcare investments include pharmaceutical and medical research companies who have passed our ethical assessment. Before investing we look at whether pharmaceutical companies have misleading advertising or pay improper inducements to doctors. We require biotech companies to conduct their medical research responsibly.

And we’re part of a global investor initiative seeking greater disclosure of the methods and results of all clinical trials. This is important to help others learn from previous research; to understand the risks and benefits of new medications; and to limit the need for further unnecessary trials and testing.

We have strict restrictions for investing in medical testing using animals. We may invest where the medical benefits to humans from vital medical research outweigh the harm to animals, but only where any animal testing is:

• for a purpose which will make a substantial contribution to human health and well-being
• necessary (i.e. required by law or regulation and no viable alternative exists)
• in accordance with ethical guidelines (such as NHMRC guidelines) which we assess to be robust to minimise the extent of testing and animal suffering.

In line with our Ethical Charter that guides us to support human dignity and avoid discrimination.

Limiting access to the civil institution of marriage based on sexual orientation is discriminatory, and it stigmatises those who are denied access (as well as their families). We do not see why sexual preference should make a difference to the way people are entitled to have their relationship commitments recognised under Australian law. Like other legal and social institutions, marriage has developed over time. The extension of marriage to all adults is an important further step.

Local and international bodies like the Australian Human Rights Commission and United Nations High Commissioner for Refugees have identified many areas in which the operation of Australian detention centres breach international human rights principles. We support the ‘human rights floor’ developed by No Business in Abuse(NBIA) for treatment of people seeking asylum:

• zero tolerance for child abuse
• no arbitrary and indefinite detention
• no cruel, inhumane or degrading treatment
• transparency and effective monitoring.

Some argue that a company should not be criticised for simply implementing government policy. We disagree. Human rights transcend the laws and actions of individual countries, being universal rights possessed by all humans. Indeed international human rights law developed after World War II to protect against human rights violations committed by governments. Individuals and companies have a responsibility to respect human rights in their activities, independently of government policy.

Where there is a risk of indigenous rights breaches in a company’s supply chain or operations, we assess the company’s approach to managing that risk (including thorough monitoring of suppliers). We also avoid companies which exploit vulnerable customers.

There are exceptions to our investment exclusions. Where a company makes a mistake, we’ll consider if the company has acted to fix the mistake and stop it happening again before we exclude. See case study

Where there is evidence of discrimination, we investigate whether the company has taken action to remedy and prevent recurrence of the breach, and to ensure all have an equal opportunity for recruitment and advancement.

Challenging direct discrimination is only part of the solution. For example, companies with high existing levels of male representation can perpetuate gender imbalance if they fail to take steps to ensure a positive work environment for all employees.

There are exceptions to our investment exclusions. Where a company makes a mistake, we’ll consider if the company has acted to fix the mistake and stop it happening again before we exclude. See case study

The climate and broader green bond market has the potential to help drive much needed additional investment to renewables and other clean economy investments like energy efficient technologies and infrastructure. The Climate Bonds Initiative is dedicated to mobilising the US$100 trillion global bond market towards climate change solutions. There are now over US$600 billion of ‘climate-aligned bonds’.

But we also believe individual bond issues should be monitored carefully to ensure that they are actually helping to drive capital to climate solutions. For climate bonds issued by banks, it’s important to ensure that the bonds do in practice help to shift lending from emissions intensive to climate friendly sectors.