Where we draw the line

Australian Ethical supports the Uluru Statement from the Heart. We welcome and are supportive of moves for a First Nations Voice to Parliament protected by the Australian constitution. Our conviction is that a decision to enable First Nations Peoples to have a say in policy and legal decisions that impact their lives is an important step forward for our nation, not only in recognising our shared history, but also in better enabling solutions that empower First Nations people and communities today, as well as generations to come.

The Australian Ethical Charter promotes investments and activities that contribute to human flourishing, dignity, health and education. We believe this is an important step towards achieving a sustainable, resilient, and prosperous future for all Australians.

Resources:

We’ve collated a handful of helpful resources to help stay informed on the Voice to Parliament.

• Listen or read: The Uluru Statement from the Heart. Professor Megan Davis, member of the Referendum Council, reads the Uluru Statement from the Heart for the first time in history on the floor of the First Nationals Constitutional Convention
• Read: The Conversation: Your Questions Answered on the Voice to Parliament.
• Build support: Messaging strategies to build transformative change with Passing the Message Stick
• Watch: The Voice to Parliament Handbook by Thomas Mayo and Kerry O’Brien
• Fact check: AAP Fact Check articles on the Voice to Parliament
• Get involved: Volunteer with a local community group

Want to read more? Hear from our Australian Ethical Super CEO Ross Piper as he shares his story, and why he believes this referendum is so important for all Australians.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We are committed to taking action to help halt and reverse nature loss including by addressing deforestation. We recognise deforestation is a systemic risk contributing to climate change and biodiversity loss. We also recognise that deforestation causes immense suffering, both to people, particularly indigenous peoples, and to the other sentient beings with which we share this planet.

As signatories to the Financial Sector Commitment Letter on Eliminating Commodity-Driven Deforestation and to the Finance for Biodiversity Pledge, we have made commitments to seek to better understand our exposure to deforestation, deepen our company engagements on this issue, and to set and disclose meaningful targets and our progress towards them.

Our direct exposure to the key drivers of deforestation globally is limited because of our exclusions for cattle production (see agriculture), palm oil, and native or old growth forest logging. For production of other food commodities, we have exclusions based on environmental performance standards (see more information here.

We may have direct exposure to deforestation through our investment in property companies undertaking greenfield urban development, and certainly have indirect exposure to deforestation through our holdings in supermarkets, other retailers, and financial institutions. We already engage some of these companies on deforestation and intend to deepen and broaden those engagements over the next few years, individually and in collaboration with others.

We have participated in the following collaborative investor initiatives that are related to deforestation:

• FAIRR, through which we engage Coles and Woolworths about their exposure to deforestation and scope 3 emissions in their livestock supply chains
• The UNPRI sustainable commodities practitioners’ group
• RIAA Nature Working Group (we initiated and co-lead the corporate engagement sub-group)
• Ceres Food Emissions 50 initiative

You can keep up to date on our engagement activities here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We're taking serious action to limit global warming.

We avoid or restrict+ 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’ve won global awards for transparency about our alignment with our climate goals.

As warming and the urgency for action has continued to grow, so has our climate ambition and action, including:

• A 2030 target to scale up our already high investment in climate solutions by 500%

• Raising our climate expectations and greenwash-scrutiny for critical companies under our ethical investment criteria

• Growing focus on important and harder-to-transition industries like building materials

• Advocacy for comprehensive Commonwealth climate legislation for a fair and efficient economic transition to reduce climate risk and unlock climate opportunity

Further reading

• Climate: The world's biggest social and economic risk

• Our latest TCFD report

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We invest in renewable energy (solar, wind, tidal, geothermal and hydro), as well as energy efficiency and battery storage.

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 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.

We take a selective approach to biofuels. Some can be produced sustainably and have the potential to extract carbon from the atmosphere when used in conjunction with carbon capture and storage (CCS). We also expect biofuels to help decarbonise air travel. We restrict+ investments in unsustainable biofuel production, taking into account factors like biodiversity impacts, pollutants from combustion, impact on food production, and how the fuel is used.

Here's further information on our approach to nuclear power.

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

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.

More information about our revenue tolerances is available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We believe 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 causing or contributing to breaches of human rights through their own activities and seek to prevent or mitigate adverse human rights impacts they are directly linked to by their business relationships 

Under our Human Rights Framework, our human rights research focusses on companies with high human-rights-risk products, services and locations, such as fashion companies with factories in high-risk countries. We exclude companies if we identify systemic disregard for adverse human rights impacts. We may take into account company behaviour which: 

• exploits vulnerable workers
• fails to follow credible processes to safeguard principles of free, prior and informed consent of the traditional owners or inhabitants 
• knowingly provides products or services to a third-party that supports that party’s abuse of human rights 
• acts against human rights defenders 
• lobbies against human rights protections 
• fails to respond to an identified human rights breach or 
• fails to take appropriate steps to guard against the risk of human rights breaches in their operations and supply chains

The supply chains of many companies in our portfolios still raise human rights concerns. Sadly, human rights breaches including modern slavery occur somewhere in the supply chains of most companies. We don’t exclude companies automatically because of human rights breaches because we believe companies have the potential to contribute to better protection of human rights by taking steps to help identify breaches and then to play their role in helping achieve remedy of breaches and action to safeguard against their recurrence. 

We don't invest in operators of offshore detention centres. We have chosen not to invest in several clothing companies because of human rights concerns. We divested from wind power companies Siemens Gamesa Renewable Energy and Xjinjiang Goldwind when we didn’t see enough action to safeguard against involvement in human rights breaches.   

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct. 

We do not automatically avoid companies operating in countries that have a poor human rights record. We see opportunities for responsible companies to make a positive contribution to the welfare of ordinary citizens of the country. At the same time foreign companies can support or be complicit in human rights abuses.  

On the positive side, there are 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. 

See case study

Further reading

A strong commitment to human rights

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We exclude companies whose main business is fossil fuels (extracting coal, oil or gas).   

We exclude companies like Woodside, Whitehaven Coal, Santos, Origin and AGL because of their fossil fuel revenue. 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 over 85% of its electricity production coming from renewables in 2023. Contract Energy earns some revenue from gas, but we think the company is worth supporting as it continues to invest in renewables and help us get to 100% clean energy. 

More information about our revenue tolerances is available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Food delivers essential nutrition to sustain human life, and healthy food prevents disease and contributes to overall wellbeing.

However, conventional animal 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

• limits unnecessary harm to humans and animals

We restrict+ investments in conventional animal agriculture companies (including free range and organic production). We assess the harm to animals, the environment (including climate) and to people (antibiotic use) caused by conventional 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.

More information about our revenue tolerances is available here.

Further reading

• Advocating for plant-based diets

• Our ethical criteria when investing in food production

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We look for businesses that respect animal rights.

We believe that non-human animals have the capacity to suffer, and humans should seek to avoid causing animals unnecessary harm. This means we restrict+ investments in: 

• 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

• conventional animal agriculture companies (including free range and organic production). We assess the harm to animals, the environment (including climate) and to people (antibiotic use) caused by conventional animal agriculture as unnecessary because lower-impact, balanced plant-based diets can sustain healthy human life.

• live animal export companies. See our position on live export.

• cosmetic companies that test their products or ingredients on animals. See our engagement with the healthcare sector to advance alternatives to animal research.

• healthcare companies that use animals for medical research unless they meet strict requirements. See our position on healthcare.

We support a variety of organisations working to advance the treatment of animals through our Foundation grants, and advocate for animals in our company engagements and through our public voice.

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

We also 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.

More information about our revenue tolerances is available here.

Further reading

Funding research into animal testing alternatives

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We do not invest in live export.

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

Further reading

• Advocating for an end to live animal export

• We’re keeping up the fight against live animal export

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Regenerative animal agriculture may be a part of a sustainable food system, but we still need to eat fewer animals.

Dietary shifts towards plant-based alternatives are the surest way to improve environmental outcomes.

Animal agriculture, particularly grazing animals on pasture, regenerative or not, takes up a significant amount of land, both directly and to produce feed for animals.

We need to think about whether a regenerative farm is making the best use of the land considering the potential for alternative uses such as carbon sinks and re-establishing native habitat.

The land that could be spared through a transition to a plant-based diet could remove 8.1 billion metric tons of CO2 from the atmosphere each year over 100 years.¹

Dedicating land to regenerative animal agriculture foregoes huge opportunities to draw down carbon and protect biodiversity – opportunities we cannot afford to miss out on.

Read our in-depth analysis.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

1. J Poore and T Nemecek (2019) Reducing food’s environmental impacts through producers and consumers, Science 360, 987-992 (2018) Erratum 22 February 2019 (accessed: 6 April 2023). 

Banks contribute to the transfer of money and capital across society and the economy, facilitating access to goods and services.

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:

• large banks assess environmental and social impacts of businesses when deciding whether to lend to them

• banks develop, market and manage their 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.

There are exceptions to our investment exclusions.  For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct. 

See case study 

Further reading

Why do we invest in banks?

https://www.australianethical.com.au/blog/weve-divested-from-marsh--mclennan-for-supporting-adani/ 

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We recognise the potential value of GMOs and other products to alleviate food shortages, reduce pesticide use and produce biofuels.

However, in many cases we don’t see enough evidence to show they’re safe or that they’re appropriately regulated. This means we expect the proponents of Genetically Modified (GM) crops and organisms to provide evidence of safety before they’re adopted.

Companies need to satisfy concerns about the potential for:

• disruption to broader ecosystems

• contamination of non-genetically modified foods

• modified genes crossing from one species to another through cross-pollination

• genetically modified crops encouraging large monocultures, which are more vulnerable than diverse food sources and may harm bees and other animals

• new allergic or other reactions to modified foods

We are also concerned by:

• inadequate labelling in many countries of food containing GMOs, which limits the capacity of consumers to choose not to eat genetically modified food.

• inappropriate patent protection for GMOs, including the resulting limitation of farmer choice which may arise from the use of GMOs in open environments.

For these reasons we currently restrict+ investments in companies which create GM organisms. We may invest in agricultural companies which use or sell food which has been grown using GM seeds. As research and experience grows in this area, we’ll keep reviewing our position.

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.

More information about our revenue tolerances is available here.

Further reading

Our ethical criteria when investing in food production

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We do not invest in old growth forest logging.

We may invest in sustainable plantation timber production, and we would not rule out a company for selective logging to advance sustainable management of a forest.

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. More information about our revenue tolerances is available here.

Further reading

We’re helping the Wilderness Society fight deforestation

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We support marriage equality.

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

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We invest in social media where companies are taking action to reduce harm from its misuse.

Social media creates a new world of opportunities for people to share information and connect with others. It can help break down physical barriers for people in remote, isolated areas. It can build connections and communication between individuals and groups with shared interests – as well as helping discussion of different interests and perspectives.

Social media can facilitate collaborative action to combat wrongdoing of governments, business and individuals. In its 'Guide to online change-making', Amnesty International describes how to use social media effectively and responsibly to advance human rights. Facebook helped people coordinate protests for democracy in several Middle Eastern countries during the Arab Spring in the early 2010s. Locally Getup organises social media campaigns for change on many important issues, including pressuring Transfield to end offshore detention of asylum seekers. More generally social media promotes business accountability by allowing consumers to share their experience of companies and their products.

Unfortunately social media can (like many new technologies) be misused and cause harm. It can amplify fake news as well as factual news. It can promote ‘slacktivism’ rather than effective activism. It can allow invasion of privacy as well as transparency. It can encourage trolling and bullying rather than real conversation. It can lead to groupthink and polarisation rather than growing understanding of different perspectives.

Despite these risks, we invest in social media because when used properly it can do good and enrich lives. We look for companies taking action to encourage more positive use of their social media platforms. Most social media has been designed with features which have facilitated or encouraged misuse. But we also see some companies now acting to re-design their platforms for more responsible use, for example through automated flagging and screening of hate speech and disputed news; by changing algorithms to give users more information of interest to them rather than to advertisers; and by providing resources for teens, parents and educators seeking support for online bullying. As with many new technologies we expect an ongoing ‘arms race’ between those interested in positive social media use and those trying to exploit social media for unethical purposes. We will invest to support the former.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We don’t believe fish farming is sustainable.

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.

More information about our revenue tolerances is available here.

Further reading

• Why we need to stop fishing the high seas

• Divesting from Tassal

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investment in most mining companies.

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 avoid investment in most mining companies, including excluding companies whose main business is extracting fossil fuels. We may invest in companies mining minerals like lithium, cobalt and rare earths which are needed to help the transition to net zero. For example, we may 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.

More information about our revenue tolerances is available here.

Further reading

Is your super fund invested in new coal mines?

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We invest in healthcare because it enables people to live longer, healthier and happier lives.

Our healthcare investments include pharmaceutical and medical research companies who have passed our ethical assessment. When assessing healthcare companies we look at issues like systemic cases of misleading advertising or improper inducements. We also look at how companies conduct or commission animal research.

We invest in responsible healthcare and pharmaceutical companies whose products and services include access to abortion and contraception, to protect the choice and interests of women.

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).

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct. 

Further reading

• The healing power of technology

• Calling on the healthcare sector to advance alternatives to animal research

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We do not invest in companies operating offshore detention centres.

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.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Responsible companies respect the customary rights of Indigenous peoples to lands, resources, and territories. This includes following credible processes for safeguarding principles of free, prior and informed consent of traditional owners. 

We restrict+ investments in companies where we are aware of systemic discrimination against indigenous people or exploitation of vulnerable customers; or companies that do not manage the risk of indigenous rights breaches in their supply chain or operations (where there is a material risk of such breaches). 

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.  

See case study

Further reading

Australia Day: Why we need to change the date

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Understanding and managing impacts on natural capital is essential for a sustainable future.

This is a fundamental part of our ethical assessment of different industries and companies. In deciding whether or not to invest in a company with a big environmental footprint, we consider their water, greenhouse gas emissions and other impacts to understand whether the business is causing unnecessary harm to the natural environment.

Overall, business impacts on natural capital need to be far better measured and reported. We are strong advocates for companies to produce sustainability and integrated reporting which deals with all the ‘six capitals’: not just financial and manufactured, but also intellectual, human, social and environmental capital.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investments in companies operating in occupied or disputed territories where they are supporting illegitimate government control of those territories.

For example, we avoid companies operating in the Gaza Strip and West Bank where they support Israeli settlements or control in these areas. We follow the United Nations and broad international consensus that the Gaza Strip and West Bank are territories illegally occupied or controlled by Israel, and that this control (including the expansion of Israeli settlements) obstructs negotiations to establish a Palestinian state. 

We have also investigated concerns that wind turbines installed in the Western Sahara are facilitating the misappropriation of natural resources for the benefit of Morocco. We divested when the company failed to take appropriate action.

Our approach to assessing corporate involvement in human rights breaches is also addressed in the 'Human rights', 'Indigenous rights' and 'Offshore detention' topics on this page.

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.

See case study

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Employee health, safety and general well-being are important factors we consider when making investment decisions.

We assess evidence of discrimination and exploitation of workers by companies. We also consider company practices which diminish the dignity of employees.

We exclude companies or other investments if we identify systemic disregard for the rights and interests of their employees. For example, if we assess that directors are failing to respond appropriately to cases of discrimination; or suppressing the rights of employees to organise and join unions; or we find persistent non-compliance with labour protection laws in the countries where the company operates. Our assessment of labour controversies also considers global labour standards. 

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.  

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investment in companies that discriminate and engage selectively with companies where we see low gender diversity at senior leadership levels.  

Where we see a lack of commitment to diversity and inclusion we may vote against the chair of the nominations committee or chair of the board at the company AGM, or divest from the company. We exclude companies or other investments if we identify systemic disregard for the rights and interests of their employees. For example, if we assess that directors are failing to respond appropriately to cases of discrimination; or suppressing the rights of employees to organise and join unions; or we find persistent non-compliance with labour protection laws in the countries where the company operates. 

We have also engaged with companies about their approach to diversity beyond gender, including culture, orientation and background. Australian companies can also explore opportunities to promote reconciliation with First Nations people, including through employment and internships, as well as through consultation around any impacts of operations, procurement, products or services where relevant. We acknowledge we can be doing more on this front ourselves.  

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.  

See case study

Further reading

Rectifying the gender imbalance

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We support a credible green bond market.

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. 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.

When we evaluate green bonds or other sustainability-linked bonds, we focus our ethical evaluation on the positive environmental or social initiatives which are being funded, like reducing emissions or increasing recycling. For example, we may invest in green bonds issued by a fast food company to finance solar panels for its offices and stores, even though we have excluded investment in the company’s shares because of our concerns about the unhealthy food produced by overall business of the company. However, we will not invest in green bonds we believe are designed to greenwash other harmful activities of the company. 

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We do not invest in companies that make weapons.

We also restrict+ investments in companies which make components used to make weapons and sold for this purpose. More information about our revenue tolerance thresholds is available here. 

When considering investment in government bonds, we consider the extent to which the country uses its military to aggressively defend or promote its national interest; and the extent of military influence in the government of the country.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investment in the alcohol industry, including brewers, distillers, wine makers and pubs.

We are concerned by the social, health and financial harms caused by the problematic relationship which many people have with alcohol, often contributed to by marketing and peer pressures. 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.

More information about our revenue tolerances is available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We’ll invest in electric car manufacturers like Tesla.

We restrict+ investments in the mainstream airline and automobile sectors because the amount of fossil fuel used by planes and cars currently exceeds the level needed to limit global warming to well below 2 degrees. Most mainstream auto companies and airlines are failing to make sufficient investments in electric cars and renewable biofuel alternatives to petroleum. We prefer to invest in mass transport such as rail which has lower emissions and reduces congestion and other pollutants. 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.

More information about our revenue tolerances are available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Insurance helps the sharing of risk across society.

It can provide important protection against injuries or accidents that individuals, families and organisations may find difficult to cope with from their own resources.

Unfortunately, insurance companies can fail their clients: Insurance may be ‘mis-sold’, with consumers paying excessive fees and commissions and in some cases ending up with inappropriate insurance – too much cover, too little cover or the wrong type of cover. Insurance companies can also be mismanaged, leaving them unable or unwilling to pay insurance claims. For this reason when we assess a specific insurance company under our Ethical Charter, we look at factors like levels of customer complaints and satisfaction levels and regulator penalties. We also consider how they take into account environmental and social impacts when making insurance and investment decisions.

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Our ethics are defined by our Ethical Charter.

Our public Ethical Charter provides the foundation for how we invest. It guides us in seeking out investments to support, and those to avoid or restrict+. The 23 principles of the Charter provide the basis for development of our more detailed Ethical Criteria and for examining whether a company is part of a path to a better future for people, planet and animals. Our Ethical Criteria govern our ethical evaluation of companies and other investments, helping us identify, measure and balance the most significant positive and negative impacts of companies, products, services and activities. 

We find that most agree that people, planet and animals are important, but they will sometimes strike a different balance between the interests of different groups (including the interests of current and future generations). For example, infrastructure development may cause harm to a specific community or animal habitat but bring benefits to a broader region, and these impacts need to be weighed against each other. Differences can also arise because it is hard to predict the future positive and negative impacts of a particular activity – we live in a very complex world.  

Further reading

• How to live an ethical life and change the world

• Investing ethically for a better world

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We invest in Australia and internationally.

Some of the deepest ethical challenges facing the planet are global. Catastrophic climate change can only be averted if greenhouse gas emissions are reduced across the globe. The alleviation of poverty also demands an international approach. From a financial point of view, there are also good reasons for Australians to consider inclusion of overseas investments in their superannuation. We offer a range of local, international and mixed investment options and funds.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We don’t invest in nuclear fission energy.

Nuclear power has potential benefits as a low carbon source of energy, but the risks of current commercial nuclear technologies outweigh those benefits.

We don’t invest in nuclear fission energy because:

• Nuclear technologies and materials can be used to make weapons including by rogue groups or states

• Harmful radiation from mining, transport and storage of uranium and long-lived nuclear waste

• The risk of catastrophic failure of nuclear power stations

• These risks outweigh the potential benefits of nuclear energy as a low carbon source of energy, particularly when there are renewable energy alternatives as well as battery, pumped hydro and other forms of energy storage.

If new nuclear technologies emerge to address these risks, we would consider them as they are developed, tested and commercialised.

Some argue that nuclear weapons deter military aggression. We don’t agree. The ‘nuclear deterrent’ won’t stop accidental detonation or launch, it works less well in crisis situations and it often won’t work at all for rogue states and other groups who are prepared to act with little regard to the risk of retaliation.

We don’t exclude investment in nuclear medicine for diagnosis and therapy in healthcare.

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.

More information about our revenue tolerances are available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We do not have a blanket exclusion for chemical or pesticide companies.

Excessive and inappropriate use of chemicals and pesticides is a major concern, but both naturally and non-naturally occurring chemicals can have beneficial uses. We will look at companies and chemicals on a case by case basis.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We don’t invest in companies which manufacture tobacco products.

We have a zero revenue threshold for tobacco farming or tobacco product manufacture, and limits on indirect involvement. For example, we won't invest in packaging company Amcor because it earns significant revenue from making cigarette packaging. We divested from the Norwegian company Tomra when it invested in technology to sort tobacco. We won’t invest in a supermarket which is mis-selling tobacco products or selling them at above market levels.

Further reading

The case against tobacco investment

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investments in the gambling industry.

This is because of the financial, psychological and relationship harm caused to problem gamblers and their families. We don’t invest in companies which specialise in making gambling machines or running gambling businesses including casinos, online sports betting and horse and greyhound racing.

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.

More information about our revenue tolerances are available here.

Further reading

Australia needs to kick its pokies addiction

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investments in palm oil production because of the impact of land clearing including on local communities and wildlife habitat.

This position extends to palm oil production for both food and bio-fuel uses. We do invest in companies that use palm oil as an input ingredient. When we assess a food company with high use of palm oil, we look for evidence of responsible sourcing and ‘no deforestation’ policies and commitments. 

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.

More information about our revenue tolerances are available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investments in companies which produce pornography.

This is because of the harm from potential exploitation of actors and others involved in its production, as well as the damage pornography can cause to young people's and others’ attitudes to sex and relationships. While pornography can be produced and consumed ethically, our concern is that too often it isn’t. We don’t exclude investment in sex toys or sex education.

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.

More information about our revenue tolerances are available here.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We restrict+ investments in new large scale hydro-electricity projects because of their displacement of people and animals, harm to ecosystems and release of methane.

Where a company is involved in positive activities (e.g. generation of electricity from solar or wind power, or from smaller scale hydro), its ownership of an existing large scale hydro project will not prevent our investment. This is because most of the social and environmental impacts have already (unfortunately) been incurred, and the project at least offers the opportunity to generate emission-free electricity (alongside the other positive activities of the company).

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.

More information about our revenue tolerances are available here.

Further reading

Your guide to renewable energy

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

A healthy news and media sector offers reliable information and diverse viewpoints which inform and educate readers, viewers and listeners.

It is essential to the proper functioning of democracy.

It is important to distinguish a free media from an unbiased media. While bias in media has negative consequences, this harm is reduced if media freedom allows a diverse range of media outlets and the public are exposed to a multitude of viewpoints.

We have excluded investment in News Corp because of serious reporting bias, including in its coverage of climate change.

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Using waste to produce energy is one way we can manage waste more sustainably.

While we need to avoid the creation of waste in the first place and recycle waste where possible, we can also use the residual waste we do create to produce energy. Waste-to-energy is a process of incineration and gasification that can reduce emissions when compared with alternatives like landfill or landfill-gas-to-energy (which we also invest in). Continuing advances in waste-to-energy technology are increasing its efficiency and reducing the risk of dangerous emissions.

Further reading

The UK’s debate guide about waste to energy

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

We don’t exclude companies for tax minimisation strategies, but we will exclude where we identify a corporate intention to illegally evade tax.

A fair tax system is essential to the proper functioning of society and the economy. Companies should pay their fair share of tax and observe the spirit of the tax law. This does not mean that companies can’t legitimately minimise tax liabilities. For example, a government may offer a tax break through accelerated depreciation to encourage companies to invest in new infrastructure. In this case we think it’s legitimate for a company to bring forward the timing of investment to take advantage of the tax break, since that’s in line with the reason the tax break was introduced.

Unfortunately, it will often be difficult to work out what is and isn’t in line with the intention of the tax law. The use of ‘tax havens’ may prompt further enquiry; however, there are some circumstances in which the use of low tax countries may be appropriate, for example, to help multinational companies avoid double taxation i.e., a requirement to pay tax on the same income in more than one country.

So, what’s the bottom line? We avoid companies which intentionally arrange their corporate structure and transactions to illegally avoid paying tax.

There are exceptions to our investment exclusions. For example, we do not automatically exclude companies for misconduct. We assess how serious and widespread the misconduct is, and we focus on the likelihood and seriousness of harm from continuing misconduct.

See case study

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.

Legitimate and accountable governments play an important role in creating conditions necessary for the advancement of the well-being of people, animals and the environment.

Our ethical criteria for governments focus on the quality of democracy, taking account of factors like political rights, civil liberties, rule of law, quality of public institutions and levels of corruption. We will not invest in securities issued by undemocratic states, and democratic governments can also be excluded for militarism.

Even governments operating in strong democracies will have many polices which we disagree with. We aim to help influence more sustainable policies through advocacy on select key issues, including through government consultations and submissions, and through our public voice in the media which can influence both governments and voters. We focus on Australian policy influence, with some support for global policy advocacy by backing collaborative engagement initiatives..

There’s more information about our ethical approach, criteria, exceptions and thresholds in our Ethical Guide.