Responsible Investment

Overview

We believe that responsible asset owners who exercise best-practice portfolio management should have concern for environmental, social, and governance (ESG) issues. We also believe that by improving ESG performance, companies can improve their long-term financial performance.

Our responsible investment (RI) work is integrated into all our investment activities. For example, understanding environmental, social and governance issues is an important part of our risk assessment and due diligence on prospective individual investments.

We also:

• monitor our portfolio for breaches of our responsible investment requirements;
• engage with companies we are concerned about; and
• work closely with our investment managers to ensure the votes they make on our behalf are appropriate.

Our responsible investment work programme is closely aligned to the United Nations’ Principles for Responsible Investment (UNPRI). The UNPRI is the internationally-accepted benchmark for how institutional investors should manage environmental, social and governance issues. The Guardians is also a member of the Investor Group on Climate Change Australia/New Zealand, the International Corporate Governance Network and the Responsible Investment Association Australia, of which staff member Anne-Maree O'Connor is on the Board. Further information on our collaborative activities is available here.

We also provide responsible investment services and advice to two other New Zealand Crown Financial Institutions: the Accident Compensation Corporation (ACC) and the Government Superannuation Fund Authority.

Our approach

Our approach to Responsible Investment is embedded within our Investment Beliefs and is governed by our Statement of Investment Policies, Standards and Procedures.

Our Responsible Investment Framework sets out in detail how we seek to enhance shareholder value and protect the reputation of the Fund by encouraging high standards of corporate behavior.  In summary, this framework commits the Guardaians integrating ESG issues into the investment decision-making process, and identifies our focus areas as:

• ensuring we meet our obligations under the Act
• developing guidelines to integrate ESG considerations across different types of investments
• effective engagement with the external investment managers and manager selection advisers we use and the companies we invest in
• being an active owner of securities in which we invest by exercising our voting rights
• considering investments which provide positive social returns in addition to the required financial return
• maintaining a robust analytical and decision making process in responding to investee companies breaching our RI standards
• benchmarking our performance against the RI standards to which we aspire.