Responsible Investment



Our responsible investment approach


December 2020


Hostplus



Hostplus is committed to responsible investment across all our investment activities.

We understand that a responsible investment approach – that includes environmental, social, governance (ESG) considerations – helps us to better manage risks and to optimise retirement outcomes for our members.

During the 2019–20 financial year we significantly updated our Responsible Investment Policy, which can be found on our website at hostplus.com.au/investment-governance.

ESG integration

We recognise the importance of considering ESG risks and include these when setting the investment strategy for our investment options, as well as when selecting and reviewing investment managers. In doing so, we are better able to protect and optimise our members’ investments over the long term.

Active ownership

When it comes to investing in company shares, we believe that active ownership – which involves company engagement and voting at company meetings – is critical to the governance of investments over the long-term. It can also positively influence company behaviour and performance, supporting the achievement of shareholder value.

  • Engagement involves meeting with representatives of an investee company, usually members of the board or executive, in order to advocate for change. During 2019–20, Hostplus engaged with 189 companies either directly or through our specialist provider, the Australian Council of Superannuation Investors (ACSI). In late 2020, we will be significantly expanding our company engagement to include international equities.
  • Voting on resolutions at shareholder meetings provides us with the opportunity to express our views to that company’s management team. As a shareholder in many top-listed companies in Australia and overseas we voted on more than 79,000 items at more than 2,400 company meetings during the financial year ended 30 June 2020.

Engagement delivers outcomes 

Engagement drives change. Recent outcomes of company engagement include:

Hostplus Socially Responsible Investment (SRI) option

Hostplus SRI – Balanced is our dedicated socially responsible investment option that gives our members access to responsible investing opportunities across a wide range of asset classes, including shares, property, fixed income, infrastructure, alternatives and cash.

The option excludes companies that make a material amount of their revenue (currently more than 10%) from tobacco, weapons, gambling, alcohol, live-animal export or pornography.

We have also recently strengthened the option’s rules around investing in fossil fuel companies . As a result, the option will soon completely exclude all companies that mine, produce or generate energy from coal, oil and gas, as well as those that receive more than 10% of revenue from servicing these sectors.

Addressing climate change risk

Climate change is one of the biggest challenges facing the world today. Hostplus recognises climate change as a financial risk, as well as an environmental and community one, the impact of which will be dependent on the extent of social and regulatory changes. We consider climate change in all aspects of the investment process, including our investment philosophy, strategic asset allocation process, stress testing, and investment manager selection and review.

We believe Hostplus members are best served by an orderly transition to a low-carbon economy. Rather than divesting or selling holdings in particular sectors, Hostplus uses its influence as a shareholder to create change within companies by encouraging and supporting this orderly transition and by investing in climate solutions.

Climate change reporting

Because we expect the companies in which we invest to disclose climate change risks and opportunities in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, it’s only right that our members would expect the same from us. In the 2020–21 financial year, Hostplus will prepare its first report which outlines our approach to the management of climate change risk.

PRI A+ rating

In 2020, we achieved an A+ rating for our Responsible Investment Strategy and Governance from the PRI.

PRI is an independent body and the world’s leading advocate for responsible investment, supported by the United Nations.

¹ Based on 30 June 2020 AUD/USD exchange rate of1.45 to convert company revenues.