Socially Conscious diversified investment options

We offer a range of Socially Conscious investment options for members who don’t want their super invested in industries and companies considered to have a highly adverse environmental or social impact. Like our Core diversified investment options, these options are invested across a range of asset types (listed and unlisted), investment managers, and investment styles. They are also managed in accordance with the fund’s Responsible Ownership approach. However, because the Socially Conscious options are designed for members wanting to avoid particular industries and companies, the investments for these options are selected and managed according to additional and more specific restrictions and exclusions (i.e. ‘screens’),as outlined below.

Screening criteria

The screening criteria applied to the Socially Conscious investment options as at the date of our latest PDS is set out below and applies to all asset classes, albeit with some differences for the private equity asset class. The screening criteria is periodically reviewed by our Responsible Investment team and may be updated from time to time. Investments in companies and other entities involved in the activities described that meet the applicable threshold are excluded from these options. However, note that the screening criteria does not apply to the use of derivatives which may have an indirect exposure to these types of investments. Additionally, up to 5% of the private equity asset class may be invested in companies and other entities not meeting the screening criteria, other than tobacco, nicotine-alternatives and tobacco-based products, and controversial weapons.

Our Socially Conscious options are designed for members wanting to avoid particular industries and companies considered to have a highly adverse environmental or social impact.

Screen

Description

Threshold

Coal

Thermal, energy and metallurgical coal mining, extraction, production, refining and processing.

5% or more of revenue

Coal fired power generation

Thermal coal power generation.

5% or more of revenue

Oil and gas (conventional/ unconventional)

Oil and gas exploration, production, refining and marketing - includes conventional oil, unconventional oil (including oil sands, tar sands, shale oil), as well as conventional and unconventional gas (including Coal Seam Gas and shale gas).

5% or more of revenue

Fossil fuel transportation

Includes fossil fuel (coal, oil and gas) storage & transportation including pipelines, storage tanks, freight, rail and ports.

5% or more of revenue

Fossil fuel supply chain and services

Directly owning and/or supplying fossil fuel (coal, oil and gas) mining equipment, oil & gas equipment & services
Companies that provide services to the fossil fuel industry whose purpose is to support the transition to the low carbon economy are not included as part of this criteria.

5% or more of revenue

Fossil fuel reserves

Companies that hold fossil fuel reserves (whether proven or probable) with the intention of exploration and/or development of those reserves for revenue generation (rather than for own use)

No threshold (i.e. any company holding reserves for the purpose described)

Gambling

Production, distribution or provision of services in relation to gambling

5% or more of revenue

Alcohol

Production of alcohol

5% or more of revenue

Pornography

Production and/or distribution of pornography

5% or more of revenue

Uranium

Uranium mining

5% or more of revenue

Nuclear power

Nuclear power production and/ or generation

5% or more of revenue

Civilian firearms

Production and/or distribution of civilian firearms and related services

5% or more of revenue

Live animal exports

Owning and/or operating live animal export operations

No threshold (i.e. companies generating any revenue from live animal exports)

Tobacco, nicotine alternatives and tobacco-based products

Production/ manufacture of tobacco, nicotine alternatives and tobacco-based products

No threshold (ie companies generating any revenue from the manufacture and/or production of tobacco products, nicotine alternatives and tobacco-based products)

Conventions and controversies-based screens

Screen

Description

Threshold

Controversial weapons

Manufacture/ production of controversial weapons, including chemical weapons, cluster munitions, land mines, depleted uranium and companies involved in the development, production and maintenance of nuclear weapons. .

Any involvement

Corporate controversies

Companies involved in very severe incidents/ corporate controversies, or that are believed to be at high risk of being involved in serious incidents in the future (see examples below).

Any involvement

Exclusion of an investment as a result of the Corporate controversies screen will be based on an assessment by the Aware Super Responsible Investment team. Where available, relevant screens/ scores provided by external ESG data providers will be considered as part of the assessment. Importantly, companies will be assessed not just against minimum allowable legal standards but also against perceived best practice.

Examples of negative corporate behaviours that may result in a company being excluded from the Socially Conscious options are provided below.

· Environmental, ecological and biodiversity wrongdoings: including companies complicit in excessive or unauthorized emissions of CO₂ and other greenhouse gases, companies contributing to worsening water quality and companies with inadequate waste management practices.

· Bribery and corruption: including both authenticated allegations and convicted violations.

· A lack of commitment to engagement and cultural sensitivity to indigenous people and local communities.

· Violation of human rights: including companies not adhering to the UN Guiding Principles for Business and Human Rights, for example by engaging in child labour, or otherwise not upholding international labour standards.

· Corporate governance failings: including companies that fail to undertake adequate investigations and implement preventative measures in relation to identified corporate governance issues.

· Serious health and safety failings: including companies that fail to undertake adequate investigations and implement preventative measures in relation to identified health and safety issues

Our Conservative Socially Conscious option is managed with specific restrictions and exclusions known as screens. It seeks to avoid investments in industries and companies recognised for having a highly adverse environmental or social impact.The option has a target split of 38% growth assets and 62% defensive assets.