Socially Aware option and tobacco exclusions

AustralianSuper's ESG and Stewardship program and tobacco exclusion applies to the Socially Aware option. In addition, the Socially Aware option applies investment exclusions (or 'screens') to listed shares in the Australian shares and international shares asset classes, and to corporate securities (such as bonds, loans and other debt instruments) in the fixed interest asset class, which covers around 60% of the option's total assets1.

The screens do not apply to all asset classes within the Socially Aware option, or to all investments within each asset class to which the screens do apply as detailed under the Exceptions section below.

Screens

The following screens seek to exclude certain investments in certain asset classes that meet the exclusion criteria ('excluded companies'), as described below:

Exclusion Description of exclusion criteria Investments and asset classes to which the screens apply
Thermal coal, oil and gas Companies that provide evidence of owning thermal coal, oil or gas reserves2.
  • Listed shares in Australian shares and international shares asset classes, and
  • Corporate securities (such as bonds, loans and other debt instruments) in the fixed interest asset class.
Cluster munitions and land mines Companies that produce, or own 20% or more of companies that produce3:
  • cluster munitions whole weapons systems, intended use components, dual use components or delivery platforms, and/or
  • whole weapons systems or essential intended or dual-use components for anti-personnel landmines and anti-vehicle landmines.
Controversies Companies that have received the highest severity rating on a labour rights, human rights, environmental or governance controversy from the relevant ESG research provider.
Single gender boards Companies that have single gender boards. S&P/ASX 200 companies in Australian shares asset class.
Uranium Companies that:
  • provide evidence of owning uranium reserves2, and/or
  • own or operate active uranium mines.
 Listed shares in Australian shares and international shares asset classes.
Tobacco See AustralianSuper’s tobacco exclusion below.
  1. The percentage of the option covered by the screens is based on the strategic asset allocation to Australian shares, international shares and fixed interest (which is adjusted for the percentage invested in corporate securities). During the year we can move toward or away from this percentage based on our outlook for the economy and investment markets. As at 30 June 2024, approximately 35% of the fixed interest asset class was invested in corporate securities and this exposure can vary over time.
  2. Reserves, in this context, are thermal coal, oil, gas or uranium that can be extracted from known fields at an economical cost.
  3. Financial institutions and fund providers that own less than 50% of companies that produce cluster munitions and land mines are not excluded by the screens.

AustralianSuper’s tobacco exclusion

AustralianSuper seeks to exclude companies involved in the production of tobacco products, including companies that grow or process raw tobacco leaves, from its investment options, as described below.

Tobacco products include traditional and alternative tobacco smoking products, such as e-cigarettes.

This exclusion doesn’t apply to:

  • companies that:
    • own less than 50% of a company involved in the production of tobacco products,
    • license brand names to tobacco products,
    • buy, sell or distribute tobacco products, and
    • produce and supply essential products for the production of tobacco products,
  • the use of derivatives that have an indirect exposure to tobacco, or
  • investments in the Member Direct investment option.

Exceptions to Socially Aware option exclusions

The Socially Aware option can still invest in companies not otherwise excluded by the screens that:

  • own reserves of metallurgical coal which is generally used in the production of steel,
  • lend to, or conduct other financial transactions with excluded companies,
  • buy, sell or process products from the excluded companies, for example petrol refiners, distributors and retailers, and/or
  • provide products and services to the excluded companies, for example insurance, security, catering and office suppliers.

The screens do not apply to investments in the following asset classes: private equity, infrastructure, property, credit, cash and other assets. This means that investments that would be otherwise excluded in the Australian shares, international shares and fixed interest asset classes may be held in these other asset classes. In addition, the screens do not apply to government issued fixed interest securities (such as bonds, loans and other debt instruments) in the fixed interest asset class. Refer to the Investment Guide, Choice Income PDS or TTR Income PDS for descriptions of each asset class.

In addition, the option may use derivatives which could result in exposure (up to 5% of the option's total assets) to companies that are otherwise excluded by the screens.

Implementation and ongoing monitoring of exclusions

ESG research providers rely on company reported information in public documents, investor presentations and websites when determining exclusion lists and we rely upon the accuracy of these exclusion lists when applying the screens.

Implementation of the screens may be affected by the accessibility and accuracy of data, or an error in source data used by third party providers. This may result in inadvertent holdings, typically over the short term.

Exclusion lists from third party data providers are generally provided monthly and we endeavour to divest from current holdings for any new exclusions as soon as practical, usually within 30 days of receiving updated data, and in any event by the end of the following month after receiving updated data.

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