At ANZ Staff Super we believe investing responsibly and investing for strong long-term returns are entirely compatible and focusing on both will help us create a strong sustainable future for our members and the planet.
Our prime purpose is to protect and grow your retirement savings, so you can live the life you want when you stop paid work. Acting with that purpose, we aim to improve our overall risk-adjusted returns by considering environmental, social and governance (ESG) risks alongside other financial risks.
We continue to safeguard our assets and members’ balances during periods of market volatility, while continuing to position ourselves favourably for the long term by selectively taking advantage of opportunities as they arise. We focus on investing in diversified high quality, value-for-money investments.
Read the list of our investment managers by asset class here.
1. Manager selection and engagement
When considering investment managers we assess each manager’s approach to managing sustainability risks. This includes the way that they select investments, but also the extent to which they actively engage with the companies that they invest in and vote on shareholder resolutions to protect the value of our members’ investments.
This is not a static process and we are raising the bar over time – we expect managers to continuously improve their approach to sustainability and will take action where we are not comfortable that risks are being managed adequately.
2. Monitoring portfolio risks
We conduct analysis and monitor at the investment option level to ensure the inherent sustainability opportunities and risks are understood; and at the manager level to engage more deeply with managers and raise concerns where we identify key risks.
3. Targeting specific sustainability focused investments
While there sustainability-related risks that need to be managed, we also believe that there are significant opportunities and have made investments in a number of these areas:
We continue to look for more investments that are expected to benefit from key sustainability-related trends and will add to these investments over time.
A large percentage of our investments are already managed by fund managers that are committed to net zero by 2050 or earlier. Through them we actively invest in renewable energy, energy efficiency, responsible waste management, value creation from waste and in investments that enhance social good, such as healthcare property and digital equity. Read about specific active managers and investments here or download our Infographic here.
Active investments are ones where investment managers don’t just follow the market but target specific assets to invest in based on their assessments of risk and return. Our highly active strategies are designed to pivot quickly to navigate changing markets and are less reliant on good economic conditions.
As at 31 December 2021, actively invested assets accounted for 62.4% of our total funds under management (FUM), broken down as follows:
Our actively invested assets are anchored in Australian Shares, International Shares, Australian Direct Property, Fixed Income and Diversity investments and spread across a number of managers. The main one is Willis Towers Watson’s Global Equity Focused Fund (GEFF) which is the single biggest investment we have, representing 13% of FUM and about 40% of our global share portfolio.
Passive investments are ones where ANZ Staff Super appoints an investment manager to invest broadly, tracking a specific asset index, for instance, the ASX 300 or MSCI World index, with the expectation that the manager’s investments have some exposure to all assets included in the index.
As at 31 December 2021, passively invested assets made up 37.6% of our total funds under management (FUM), broken down as follows:
Our passively invested assets are spread across:
Note that during 2022 we moved some of our cash to an external cash manager.
We believe that sustainability in investment portfolios is crucial to their long-term success, and investment strategies that have enhanced sustainability characteristics will deliver superior overall investment returns for our members.
We take ESG considerations into account when making investment decisions and monitoring performance. Historically, this has primarily been through assessing the approach to ESG investing of our external managers to ensure that they are appropriately considering the risks and opportunities that ESG factors create.
Managing ESG in our actively invested assets
Our active investment managers have strong ESG credentials. For example:
Ancala is focused on investing in critical mid-market infrastructure assets. It has recently acquired Augean PLC, a British waste management company that specialises in responsible waste management, playing a crucial role in the transition towards a more sustainable and circular economy. Its social investments include care services for adults with disabilities and/or complex mental health needs.
AMP Capital invests in major shopping centres and corporate offices and has committed to Zero Net Carbon by 2030 through phasing out fossil fuels, running on 100% renewable energy and making their buildings highly efficient and resilient.
Barwon invests in the Australian Healthcare Property Sector, which encompasses private hospitals, medical centres and specialised medical facilities. Recently Barwon partnered with others to develop a new private mental health facility in Canberra, to help address the lack of private mental health options in the ACT, currently causing heavy patient pressure on the public system for those with mental illnesses.
Palisade is an independent Australian infrastructure manager funding renewable energy from solar, wind and geothermal. Palisade Diversified Infrastructure Fund's West Coast Wind Farm was named Australia's top performer in 2021. As part of its focus on diversity, Palisade offers a Regional Women's Undergraduate Scholarship Program, promoting a pathway for women to study and be employed in traditionally male-dominated careers, such as engineering and agriculture.
Palisade Impact Fund invests in next generation infrastructure solutions and has a focus on investments targeting net zero emissions, zero waste and zero inequality - providing broader access to next generation infrastructure by focusing on digital inclusion. Read the interview with Palisade Impact's CEO here.
SUSI Partners, a private fund manager, has established new €300m Energy Transition Fund which has a focus of investing in clean energy infrastructure. SUSI is deploying capital in key solar, wind and LED lighting projects globally including in Chile, Italy and Western Australia, with agreement for a project in Poland about to be finalised. ANZ Staff Super is a founding investor.
GEFF is on a pathway to net zero greenhouse gas emissions by 2050 with a target of halving of emissions by 2030 compared to a 2015 baseline. Climate change and other ESG issues are already key considerations in GEFF’s investment decision making process.
We continually look at how we can improve our ability to measure our ESG exposures, both at the total portfolio level and for each external manager. This has improved our ability to monitor the risks within the portfolio and to engage with our managers to ensure they continue to manage our members’ money appropriately.
Managing ESG in our passive invested assets
The PRI are based on the belief that ESG issues, such as climate change and human rights, can affect the performance of investment portfolios and need to be considered alongside more traditional financial factors.
Signatories commit to including ESG factors in the decisions they make about what to invest in and the role they play as asset owners and creditors.
The UN Principles for responsible investing
Signatories to the UNPRI apply these six Principles to align themselves with the broader objectives of society and promote social good.
Management of ESG issues is a necessary element in ensuring that the Trustee’s investment portfolio continues to maximise its likelihood of future investment success relative to its long-term risk exposures.
The Trustee outsources the implementation of its investment strategy to external investment managers, predominantly through pooled funds and therefore considers ESG when appointing managers.
The Trustee recognises that ESG factors can have varying degrees of relevance across asset classes and each investment manager will have its own policy on the extent to which labour standards or environmental, social and governance issues are taken into account when making investment decisions. The ESG policies of each individual manager, as well as any ESG tailwinds accessed by the manager’s strategies, are considered during the due diligence process undertaken at the time of their selection. Adherence to a manager’s ESG policies is referenced when monitoring their management of ESG factors and risks.
Accordingly, the fund’s investment managers must be able to provide details of their ESG policy. For example, this may be satisfied through demonstrating the adoption of the United Nations Principles of Responsible Investing (UNPRI) including reporting of their actions and / or in the case of property and infrastructure assets, evidencing their annual GRESB assessments. As part of periodic investment manager reviews, compliance with their stated ESG policies will be assessed.
As a way of capturing developments / trends in ESG practices within investment management, the status of ESG practices employed by managers is a standing item at all portfolio update meetings.
The Trustee also recognises that applying this policy may better align its members' expectations with broader objectives of society and may from time to time express views on issues to the investment managers.
As part of its manager appointment process, the Trustee will consider the extent to which managers incorporate ESG-related exclusions. Where it will not negatively impact long-term risk adjusted returns to a material extent, the Trustee will also consider explicitly screened investment products.
The Trustee considers that engagement and voting in relation to underlying investments is best performed by the Fund's investment managers, who can use their scale to better influence outcomes. As such, the Trustee expects that, where appropriate to the asset class and underlying investments, the Fund’s investment managers will undertake engagement with companies and exercise voting rights in a manner that supports the management of ESG risks within underlying investments and assesses the approach that managers take to engagement and voting as part of the manager selection process.
The Trustee, with the assistance of the Asset Consultant, also conducts option level analysis of exposures to ESG risks and opportunities in order to identify any unintended concentrations of risk.
This analysis includes an assessment of sustainability related risks arising from a number of different climate-related, environmental, social and governance metrics and an assessment of investment manager sustainability integration. These metrics are calculated using a mix of sources that seek to capture the risks and opportunities of the portfolio. Where areas of concern are identified, the Trustee will investigate the contributors to the relevant metric and identify whether any action is required, which may include further engagement with investment managers or portfolio changes.
The UNPRI works with its international network of signatories to put the six Principles of Responsible Investment into practice. Its goals are to understand the investment implications of environmental, social and governance issues and to support signatories in integrating these issues into investment and ownership decisions.
Real estate and infrastructure managers and companies use the GRESB assessments to measure, benchmark and improve their sustainability programs and report to their investors on their ESG performance.
Undertaken either as part of formal manager meetings conducted by the Fund’s Asset Consultant or portfolio updates between the Fund and investment manager that are conducted during the year.
The Trustee accepts that climate change is expected to give rise to risks on members’ superannuation outcomes via regulatory, environmental, economic and social impacts.
These risks will be considered by the Fund in the manager selection process and addressed by each fund manager via their ESG policy and in the practical implementation of their portfolios.
A transition to a low carbon global economy will lead to both risks and opportunities in relation to the Fund’s investments. Considering this will improve the Fund’s understanding of these implications on investment performance to better manage the related risks and opportunities.
Get the advice you need before you make an investment choice or switch investment options. You can contact an ANZ Staff Super financial adviser on 1800 000 086 who can give you limited advice on the investment options available and your investment strategy.
If your needs are simple, an ANZ Staff Super financial adviser can help.
The Trustee of ANZ Staff Super has entered into an agreement with Mercer Financial Advice (Australia) Pty Ltd under which Mercer's financial advisers have been engaged to provide members with general or limited personal financial advice about options available within ANZ Staff Super over the phone for no extra charge.
These financial planning services are provided by Mercer Financial Advice (Australia) Pty Ltd ABN 76 153 168 293, AFSL #411766. Any advice provided by Mercer's advisers is not provided or endorsed by the Trustee and is not provided under the Trustee’s AFSL.