Under the Bonnet – Responsible investing at ASB
ASB is one of the largest fund managers in New Zealand with over $20 billion in assets under management for around 500,000 investors. ASB Group Investments is owned by ASB Bank Limited, which was the first savings bank in New Zealand, established in 1847. RIAA spoke with Emma Lavelua, Product Manager Wealth, Managed Funds and Merrin Laurenson, Senior Product Manager at ASB about their approach to stewardship and responsible investment journey.
Engagement is one of ASB’s five guiding principles that is used to help achieve its incorporation of ESG considerations into investment decisions, to better manage risk and generate sustainable, long-term returns. Can you tell us more about this principle and how ASB employs it to achieve responsible investment outcomes?
At ASB, we select managers with active ownership practices to engage and vote on our behalf with a focus on sustainable long-term value. We require our managers to clearly describe how they consider ESG issues, have a policy covering how they engage on ESG issues and a clear proxy voting policy. We then assess our manager’s engagement and voting activities for consistency with ASB’s values and investment beliefs.
We published a recent example in our annual ASB KiwiSaver Scheme report. Our global equities manager engaged with the world’s largest rubber glove manufacturer given concerns on the company’s ineffective COVID-19 workforce protections and labour practices. After engagement and voting efforts from multiple shareholders, the company addressed health and safety, and labour concerns at its manufacturing facilities.
ASB is a financial sponsor of the Stewardship Code for Aotearoa New Zealand, which recently launched at the RI Aotearoa NZ 2022 conference in Auckland. Tell us more about ASB’s involvement in the Code and what it means to be a sponsor for your organisation.
Financially supporting the Stewardship Code was a small but crucial part we could play in supporting New Zealand’s long-term wellbeing. We assisted in the industry consultation process and our Pouhoe Māori, Tawa Campbell-Seymour, provided advice to integrate Te Ao Māori into the Code.
How does ASB’s involvement in the Stewardship Code fit in to the organisation’s broader strategy? Has this kind of involvement become a strategic imperative for ASB?
As part of ASB’s purpose to accelerate the financial progress of all New Zealanders, we have a responsibility to manage environmental, social and governance risks, and identify proactive opportunities to support New Zealanders’ long-term wellbeing. We see the Stewardship Code as a proactive opportunity to support this.
With a total of nine financial products that have been certified by RIAA, why is it important for ASB to seek RIAA certification for its KiwiSaver and investment funds?
It’s easy to be confused when trying to compare what each fund and provider are investing responsibly. Being certified can reassure our customers that we are doing what we say, and this has been independently assessed by experts against industry standards.
Having certified products aligns to our ASB values caring, integrity, passion, courage and united.
ASB appears to be making an overt, conscious decision to become more aligned with responsible investment industry standards. What do you think is driving a greater focus on these standards within the organisation?
We invest money for over 500,000 customers and responsible investing is something that our customers have come to expect. We also have a responsibility as one of New Zealand’s leading financial institutions to use our influence and resources to help drive change and manage risk – while empowering our customers to explore new opportunities.