Responsible investment
Responsible investment helps contribute to more attractive risk-adjusted returns for our investors
The following information on responsible investment is for investment portfolios which are managed by MLC Asset Management Services Limited (MSL) only. You should assess or seek information on the responsible investment policy or equivalent environmental, social and governance policy for any other entity, including another Insignia Financial Group entity or one of its partner investment managers through their respective websites.
Responsible investment
Responsible investment is the practice of considering Environmental, Social and Governance (ESG) factors in the research, analysis, selection and management of investments and the implementation of good stewardship practices.
There are a broad range of ESG factors that may impact the risk profile and or return characteristics of an investment. Some examples include:
Environmental (E)
- Climate change initiatives like reduction in greenhouse gas emissions
- Waste management
- Energy efficiency
- Water supply
- Pollution
- Biodiversity
Social (S)
- Human capital management
- Labour standards
- Modern slavery
- Diversity, Equity and Inclusion (DE&I)
- Workplace health and safety
- Integration with local community and earning a social licence to operate
- Indigenous rights
- Employee engagement
Governance (G)
- Rights, responsibilities and expectations across all stakeholders
- Board structure, diversity and independence
- Executive remuneration (short- and long-term incentives)
- Bribery and corruption
- Anti-competitive behaviour
- Political lobbying and donations
- Shareholder rights
- Tax strategy
Responsible investment in the portfolios
MSL applies responsible investment differently depending on whether it engages an investment manager or undertakes direct asset management.
Where MSL engages an investment manager, MSL and the investment managers it has selected use the following responsible investment approaches (where possible for the asset class of the strategy) to improve investment outcomes:
ESG Integration
Systematic and explicit identification and consideration of material ESG factors in the investment decision-making process.
Active Stewardship
Exercising ownership and/or other rights that are conveyed through securities (or financial instruments), such as proxy voting, and engaging with the issuing companies.
ESG Integration contributes to improved risk-adjusted returns for investors. Active Stewardship that supports good governance practices and acts to ensure companies appropriately consider material ESG factors should contribute to the long-term sustainability and valuation of investments. For example, if a company isn’t taking into account pollution risks (E), underpays its workers (S), or has weak oversight of key business functions (G), then it will likely experience adverse consequences at some point, which in turn can potentially negatively impact its operations, financial performance and ultimately its share price.
MSL undertakes appropriate due diligence of the investment managers it selects prior to their appointment, including their consideration of ESG factors in their portfolios, where relevant. MSL monitors and collects regular reporting on each investment manager’s approach to responsible investment, including their proxy voting decisions and significant company engagements.
How the responsible investment approaches described above are applied will vary across asset classes and, in some cases, it’s not possible to apply them.
Direct asset management exception
Where MSL does not engage an investment manager it does not apply responsible investment for the management of the assets.
Currently, MSL undertakes portfolio management by engaging an investment manager. Considering the above responsible investment approach, ESG integration does not apply to direct investment in any asset class.
More information about our approach to responsible investment
Responsible investment policy
Our beliefs and approach are outlined in MSL's Responsible Investment Policy
Proxy voting
MSL does not have a proxy voting policy. Proxy voting is undertaken in accordance with the engagement of MSL. Where MLC Investment Limited (MLCI) has engaged MSL proxy voting is undertaken in accordance with MLCI’s proxy voting policy which is available here: Proxy Voting Policy
Industry memberships
MSL is a member of the following industry associations:
- Responsible Investment Association of Australasia (RIAA); and;
- Investor Group on Climate Change (IGCC).
Noting , currently there are no funds certified by either of these bodies that are managed by MSL.
Responsible investment update
MSL’s responsible investment update provides examples of recent responsible investment activities in client portfolios.
Download our latest Responsible investment update flyer
People
James Tayler
Head of Responsible Investment
Important information
The information in this communication has been prepared by and is for MLC Asset Management Services Limited (ABN 38 055 638 474, AFSL 230687) (MSL) only. You should assess or seek information on the responsible investing policy or equivalent environmental, social and governance policy for any other entity, including another Insignia Financial Group entity or one of its partner investment managers, and whether it is appropriate for your needs, financial situation and investment objectives.
From time to time, this communication is provided by MLC Investments Limited (ABN 30 002 641 661 AFSL 230705) as Responsible Entity of the MLC Investment Trusts and MLC MasterKey Unit Trust, Navigator Australia Limited (ABN 45 006 302 987, AFSL 236466) as Responsible Entity of the Pre Select funds, and NULIS Nominees (Australia) Limited (ABN 80 008 515 633, AFSL 236465) as trustee of Plum Super, MLC MasterKey Fundamentals Super and Pension, and MLC MasterKey Business Super products which are a part of the MLC Super Fund (ABN 70 732 426 024) (together ‘MLC’).
MSL is the Principal Investment Advisor to MLC Investments Limited and the Portfolio Manager to NULIS Nominees (Australia) Limited. MLC Investments Limited, Navigator Australia Limited, NULIS Nominees (Australia) Limited and MLC Asset Management Services Limited are part of the Insignia Financial group of companies (comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate) (‘Insignia Financial Group’).
MSL is the only Insignia Financial Group entity that is liable for the information in this communication.
This communication may constitute general advice. It has been prepared without taking account of an investor’s objectives, financial situation or needs and because of that an investor should, before acting on the advice, consider the appropriateness of the advice having regard to their personal objectives, financial situation and needs. No member of the Insignia Financial Group guarantees or otherwise accepts any liability in respect of any financial product referred to in this communication.
You should obtain a Product Disclosure Statement (PDS) and target market determination (TMD) relating to any financial products mentioned in this communication issued by MLC Investments Limited, Navigator Australia Limited or NULIS Nominees (Australia) Limited, and consider it before making any decision about the product. A copy of the PDS or TMD is available upon request by phoning the MLC call centre on 132 652 or on MLC’s website at mlc.com.au.
Any projection or other forward-looking statement (‘Projection’) in this document is provided for information purposes only. No representation is made as to the accuracy or reasonableness of any such Projection or that it will be met. Actual events may vary materially. Any opinions expressed in this communication constitute our judgement at the time of issue and are subject to change.
We believe that the information contained in this communication is correct and that any estimates, opinions, conclusions or recommendations are reasonably held or made as at the time of compilation. However, no warranty is made as to their accuracy or reliability (which may change without notice) or other information contained in this communication.
This communication is directed to and prepared for Australian residents only.
The investment strategies are current as at the date this communication was prepared, but are subject to change. Investment strategies are regularly added or removed at any time. We may use the services of any member of the Insignia Financial Group where it makes good business sense to do so and will benefit customers. Amounts paid for these services are always negotiated on an arm’s length basis.
This information in this website section is subject to the terms and conditions under the general website disclaimer.
