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Ethical influencing

We invest for a better future, and that means we use all the tools we have as an investor to influence change.

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FY19 Summary

There is a growing movement of people who recognise that businesses and the economy should be a force for good and those people are working hard to change the system from within. Investors have a crucial role to play in this as they control large amounts of capital. As an ethical investor, we try to punch above our weight in terms of our own contribution. This table gives an overview of some examples of how we have used our investor position to advocate for a better world during Financial Year 2019 (July 2018 - June 2019). 

For the planet  |  For the people  |  For the animals

For the planet

Influence target


Background and actions


Companies engaged and that changed*

Big polluters

Emissions disclosures

Obstruction of sensible climate and energy policy

We are in what scientists describe as a ‘climate emergency’ so advocacy on climate action remains critical. While we do not invest in big polluters (like fossil fuel companies) we have a role to play in advocating for the systemic change needed to urgently decarbonise our society and economies.

Using our nominal advocacy holdings in Origin Energy, we supported shareholder resolutions that raised concerns about (1) indigenous consent for Origin’s NT shale gas exploration; (2) Origin’s climate reporting and targets; and (3) Origin’s membership of industry associations which obstruct sensible climate and energy policy. These resolutions were arranged by the Australian Centre for Corporate Responsibility (ACCR). We engaged with Origin on these issues and attended the AGM and asked a question about how their climate scenario analysis takes into account the uncertainty surrounding fugitive methane emissions i.e. gas leaks from gas production which warm the atmosphere.

We also engaged with Santos about emissions reduction targets, climate policy lobbying and fugitive emissions. We are deeply concerned that gas companies are planning production growth when gas use needs to reduce to limit warming to 1.5 degrees. We challenged the gas industry’s appeal to carbon capture and storage technology which remains unproven.

We are also part of investor initiatives including Climate Action 100+, ShareAction’s Decarbonisation Initiative and the Oslo Climate Leadership Declaration. Through these groups we have engaged with the world’s largest corporate greenhouse gas emitters to reduce emissions and strengthen climate-related financial disclosures and supported letters to 15 high emission companies across a range of sectors including automotive, food and agriculture, cement, steel, real estate, IT and power generation.  We also supported the investor statement in support of the Cerrado Manifesto, calling for immediate action to stop deforestation and destruction of native vegetation in the Cerrado savannah in Brazil.


The Origin climate policy lobbying resolution received 46% support, a record for an Australian shareholder resolution opposed by directors. There was 8% support for the mining consent resolution and 12% for the climate reporting/ targets resolution. Origin committed to improving disclosure about its membership of industry associations.

Following investor engagement through the Climate Action 100+ initiative, Glencore has undertaken not to grow its coal production capacity and Shell has set its first three-year emission reduction target (which covers all emissions from extraction to end use of its products), has linked remuneration of its top 150 executives to delivery of the target, and has made a commitment to set a further three year target in 2020 with an uplift in ambition on its existing commitment. We do not invest in Glencore or Shell.


43 companies engaged collaboratively, 2 engaged independently

11 companies changed               


Insurers and lenders

Reducing insurance of and lending to fossil fuel companies

We co-filed a shareholder resolution arranged by Market Forces that called on insurer QBE to disclose its targets to reduce investment and underwriting exposure to coal, oil and gas. We attended the QBE AGM in May to join other investors to persuade QBE directors to stop investing in and insuring coal, oil and gas assets which aren’t aligned with the Paris Climate Agreement.

We are also providing Australian support for a climate banking engagement undertaken by US investor Boston Common. This project surveys and reports on climate action (and inaction) by about 60 global banks, including the Australian big 4.


QBE announced before the AGM that it will phase out insurance for thermal coal. Under sustained investor questioning at the AGM about continuing support for oil and gas, the company said its climate restrictions will continue to evolve. In response to a question by our Head of Ethics Research Stuart Palmer, QBE’s chairman said “we hear and listen to folks like yourself”.

The global banking engagement is in progress with reporting of outcomes expected later this year.

4 companies engaged collaboratively, 1 company engaged independently

1 company changed


Investors and the companies they invest in

Climate action and transparency

Impact investing

We presented at conferences and workshops organised by Beyond Zero Emissions, the Investor Group on Climate Change, the Financial Services Council and the United Nations Environment Program Finance Initiative. We presented on:

  • Climate reporting aligned with the recommendations of the TCFD (Task Force on Climate-related Financial Disclosures)
  • Impact investing for real change, not greenwash
  • Climate action and targets to limit warming to well below 2 degrees.


A growing number of companies and investors are saying they will follow the TCFD recommendations in their reporting. We will monitor the quality of the reporting and climate action commitments of key companies we invest in.





Policy to assist climate action

We were one of a record of 477 investors, managing over US $34 trillion, supporting the G7 Investor Statement on climate change that called on world governments to achieve the Paris Agreement’s goals, accelerate private sector investment into the low carbon transition, and commit to improve climate-related financial reporting.


The letter was sent in June 2019. We will provide details on any positive outcomes from this advocacy in future reporting. 



For the people

Influence target


Background and actions


Companies engaged and that changed*


Worker rights

We used our nominal advocacy shareholding in Woolworths to support ACCR shareholder resolutions seeking faster progress on measures to protect workers in their supply chain. We engaged with Woolworths on ways to help vulnerable temporary migrant workers understand and assert their rights, including improving access to grievance reporting and resolutions mechanisms. We also raised supply chain human rights issues with the newly listed Coles Group. We do not invest in either of the major supermarket chains.


The shareholder resolution received 15% support. Woolworths will be upgrading its own grievance mechanism to make it more accessible to workers including by making it available in multiple languages and ensuring information is provided ‘on farm’.

Coles has committed to work with an alliance of unions to address worker exploitation in the fresh food supply chain.


2 companies engaged independently

2 companies changed




Asylum seekers and refugees

A shareholder resolution arranged by ACCR asked that Qantas review and report on its involvement in involuntary transportation of people as a service provider to the Australian government. These deportations may breach international human rights protections for asylum seekers.

We do not invest in Qantas or have an advocacy holding, but we engaged with the company on these issues. We supported the human rights review because we think Qantas needs to show it understands that business can’t escape responsibility for human rights breaches with the excuse that the government asked for it – whether that’s the Australian government or any other. Companies have a responsibility to respect human rights in their activities, independently of government policy.


The resolution received 6.5% support. Qantas has published additional information about its commitment to enhance human rights and has nominated transport of people in custody as one of 5 focus areas. However, Qantas says that reviewing involuntary transport requests and processes would be inconsistent with its commitment to the UN Guiding Principles on Business and Human Rights. To the contrary, the Guiding Principles are very clear that business should not facilitate government disregard for human rights.

1 company engaged independently

0 changed


Companies considered high risk from a human rights perspective

Human rights generally

We engaged with 25 international and domestic companies on how they are addressing human rights issues in their operations and supply chains and (where relevant) in customers’ use of their products. We engaged with companies in the agricultural, telecommunications, electronics, real estate and surveillance technologies sectors, as well as a company with operations in Israeli-occupied Palestinian territories.


Responses to our enquiries will be considered when finalising our ethical assessments and may result in divestments. Two divestments for human rights concerns occurred during the year, AGC and Fujitsu.

From next year, companies in Australia over a certain size will start reporting on their efforts to address modern slavery under the new Modern Slavery Act. In preparation for this, we are updating the standards by which we propose to assess companies on their efforts to address human rights issues and we plan to put companies in high risk sectors on notice of our expectations.


23 companies engaged independently, 2 companies engaged collaboratively

1 company changed


Companies in our portfolio with low gender diversity on their board and in their senior management

Gender diversity

We identified the domestic (Australian and New Zealand) companies in our portfolio that have low gender diversity on their board or senior management team. We commissioned research into the diversity policies and initiatives of those companies and, based on that research, wrote to the boards of 21 companies suggesting specific further action they could be taking to address gender imbalance.


Of the 21 companies we engaged, to date we have had meaningful engagements with three. Two of the companies are considering initiatives to address gender diversity and one company has indicated it will provide better reporting on the action it is already taking. We will continue to monitor all 21 companies.


21 companies engaged independently

We will report outcomes next year


For the animals

Influence target


Background and actions


Companies engaged and that changed*

Health care companies involved in animal research

Animal research for medical purposes

We wrote to 17 health care companies that are involved, directly or indirectly, in animal research and called for them to do more to ensure that they are using alternatives to animals wherever possible and improving welfare standards in their research.
We recognise that animal research is currently a necessary part of developing important medicines and medical devices. Given sentient animals subjected to animal research can suffer extreme distress and pain, we expect companies that are involved in animal research (directly or indirectly) to take seriously their obligation to avoid and reduce animal suffering wherever possible, including by demonstrating genuine commitment to the 3R principles (replacement of animals, reduction in the number of animals used and refinement of conditions and methodology to reduce suffering).

In our letter we set out minimum expectations, as well as best practice guidelines for companies that commission animal research. These were developed in consultation with various stakeholders including health care companies, current and former members of animal ethics committees and organisations that promote alternatives to animal research.


Of the 17 companies we engaged, to date one company has committed to comply with our minimum expectations. We will factor in efforts of companies to comply with our requirements when we come to reassess these companies (we periodically reassess all companies to which we have given ethical approval for investment).


17 companies engaged independently

1 company changed to date

Companies with exposure to live export

Australian Government

Live export

We have been actively campaigning for an end to live export. Live export causes great and unnecessary suffering and it should be phased out. Until that happens we continue to call for an end to the trade whilst also supporting any regulatory and industry changes that mitigate animal suffering.
We engaged with four banks that may be exposed to the live export trade through their loan books and encouraged them to reconsider their exposure. We also contributed to public consultations related to live export regulations including the review of the Australian Standards for the Export of Livestock and proposed changes to the Heat Stress Risk Assessment model. In preparing our submissions we consulted with Animals Australia and the RSPCA.

A more detailed summary of our recent advocacy on this issue is available here.


One of the banks we engaged said that it has significantly tightened its due diligence process for the live export sector since last year. Another bank has confirmed that it does not fund live export operators and applies an animal welfare policy that guides its lending decisions.

Following public outcry about the treatment of sheep on live export shipments, the industry has implemented a self-imposed ban on shipping animals to the Middle East during the height of the Middle Eastern summer. However this is not sufficient to prevent animals experiencing extreme suffering. To date, government response to the animal welfare issues inherent in live export has been poor including because the government has failed to follow the recommendations made by leading animal welfare specialists and scientists.

4 companies engaged independently

2 companies changed


Film companies

Wild animals in captivity

We engaged with Vivendi and AT&T on their use of captive wild animals in film production. Our position is that wild animals should not be kept in captivity to produce entertainment content because the animals can experience significant harm including as result of capture from the wild, early separation from parents and fear-based training or drugging (e.g. to allow human interaction).


We divested our shareholding in Vivendi because we assessed that they do not meet the requirements of our Ethical Charter. We keep AT&T under review as we seek a commitment to phase out their use of captive wild animals.


2 companies engaged independently

0 companies changed


Food companies

Animals used for food

We do not invest in conventional animal agriculture as we assess that it causes unnecessary harm to animals and to the planet. However, we continue to advocate for improvements in animal welfare standards and practices to mitigate animal suffering.
We support the ongoing work of Farm Animal Investment Risk and Return (FAIRR) engaging with global food producers, manufacturers, retailers and restaurant chains about opportunities to replace animal protein ingredients and products with plant protein, and to limit antibiotics use in food production and supply chains.

Through the Business Benchmark on Farm Animal Welfare (BBFAW) we supported engagement with 150 international and domestic companies that are involved in animal agriculture supply chains (from producers to retailers), calling for improvements in animal welfare. We also spoke to both Woolworths and Coles about their efforts to improve animal welfare standards in their supply chain.


Of the 25 companies engaged on alternative protein through FAIRR, 23 companies expanded (or announced plans to expand) their alternative protein product portfolios.

Of the companies engaged through BBFAW, nine made improvements in response to a particular BBFAW recommendation. BBFAW reports ongoing improvement by companies captured in its benchmark. The number of companies that are considered to have farm animal welfare as an integral part of their business strategy has grown from 3 in 2012 to 17 in 2018. Of the 150 companies covered by the 2018 Benchmark, 64 (43%) now have explicit board or senior management oversight of farm animal welfare (compared to just 22% in 2012), and 106 (71%) have published formal improvement objectives for farm animal welfare (compared to 26% in 2012). Of the 55 food companies that have been continuously included in the Benchmark since 2012, 45 (82%) have moved up at least one Tier since 2012.


150+ companies engaged collaboratively (2 of these companies were also engaged independently)
32 companies changed

* The number of companies engaged and changed is an estimate of the number of companies contacted during the year as part of the engagement, and of the number of those companies which made a positive change or commitment to change on the issue during the year. We’re not claiming credit for all this change, but we’re doing our bit.