Annual Responsible Investment Disclosure

In May 2023, the University published the Sustainability Strategy 2030 – Here for good (the Strategy) to enable the institution to respond to the accelerating environmental, social, economic and technological changes across the globe.  

The Strategy commits to responsible investment by applying strong environmental, social and governance principles across investments with the following objectives:

  • To ensure our values are reflected in the University’s investment portfolio
  • Align our investment approach to the principles of the Sustainability Strategy and encourage exclusions or certain investments where there is misalignment
  • Update environmental, social and governance (ESG) Investment Principles to reflect leading practice, requiring fund managers to be signatories to the United Nations Principles for Responsible Investment or a member of the Responsible Investment Association Australasia (RIAA) and communicate annual sustainable investment disclosures. 

  • Approach to responsible investing

    The investment approach for the University’s Endowment Fund is aligned with the principles of the Strategy, reflecting the University’s values.

    There are circumstances in which the University believes it is appropriate to exclude certain exposures from the Endowment Fund’s portfolio on ethical grounds.  Such circumstances typically arise when activities undertaken by a given company or industry are deemed inconsistent with the Strategy. 

    Most investments expose the Fund to a mix of both positive and negative activities.  Certain companies may generate a small proportion of their revenue from negative activities but remain profitable investments from an ethical perspective.  The Endowment Fund’s stated exclusions therefore include allowances and tolerance levels to account for such nuances. 

    The Endowment Fund excludes public equities and corporate bonds issued by:

    • Any listed company that derives 10% or more of total revenue from the ownership and exploitation of its fossil fuel reserves, including thermal coal, oil, and gas1
    • Any listed company which manufactures tobacco products
    • Any listed company which manufactures controversial weapons (including components produced exclusively for use in controversial weapons) such as cluster munitions, biological/chemical weapons, and land mines

    1At the time of writing, the University has committed to the divestment of direct and co-mingled holdings encapsulated under this exclusion by the end of 2024.

  • Activities during 2023

    In 2023 the Fund has undergone a number of changes to facilitate the transition to an investment portfolio that will be able to meet the objectives of the Strategy.  These changes include the following:

    • Appointment of Frontier Advisory as a new independent asset advisor – March 2023
    • Review of the Governance structure – approved by Council on 5 June 2023
    • Review of the Endowment Fund Policy incorporating ESG principles and ethical investment exclusions – approved by Council on 5 June 2023
    • Review of the Fund objectives and long-term targets and subsequent approval of new Strategic Asset Allocation (SAA) – approved by Council on 16 October 2023
    • Development of a transition plan to the approved Strategic Asset Allocation and divestment from fossil fuels over the course of 2024

  • Fund Managers

    The Endowment Fund invests in four funds through three fund managers.  All three fund managers are signatories to the UN PRI (UN Principles for Responsible Investment).  A summary of the Fund Managers is provided below:

    Funds SA

    A core part of Funds SA’s Responsible Investment activities is the ongoing focus on environmental, social and governance (ESG) integration and stewardship activities through investment manager engagement and monitoring.

    During 2022-23, as part of Funds SA’s Climate Risk Response Plan, Funds SA commenced phasing out thermal coal exposure, except where a credible transition plan exists.

    Since 2012, Tobacco has been a formal exclusion applied to discrete mandates only.  Investments in
    securities issued by companies classified as being in the tobacco industry according to the Global
    Industry Classification Standard (GICS) or similar are not permitted.

    Data provided by Funds SA is based on MSCI Metrics.

    Fulcrum

    Fulcrum uses Sustainalytics data for carbon reporting and firmwide exclusions.  All Fulcrum investment strategies are excluded from investing in controversial weapons (including cluster munitions), tobacco, and predatory lending.

    In addition to temperature-based restrictions, Fulcrum screen out companies primarily involved in, and planning new projects for the extraction of, thermal coal mining and oil sands from existing strategies managed in line with net-zero. This exclusion applies to the strategic equity allocation within our Diversified Absolute Return strategy.

    AQR

    The GRP EL Offshore Fund uses both individual stock positions (cash and swap instruments) and equity index derivatives to achieve equity exposure.  

    AQR uses MSCI data in calculating the