As a superannuation fund, Hostplus’ primary duties are to:
In order to meet these obligations, and to protect and manage our investments for the long-term, we recognise the need to consider environmental, social and governance (ESG) opportunities and risks in our investment decision‑making processes.
“As a global long-term investor and signatory to the Principles for Responsible Investment, Hostplus acknowledges that climate change will have a wide range of consequences which may impact our investment portfolio. We are committed to improving our understanding of our fund’s exposure to material climate change risks across companies, sectors, regions and asset classes.”
Climate change is one component of Hostplus’ ESG considerations, however it is one of the largest economic challenges facing investors today – physically, socially and legally.
As a fund, we respect the concern and commitment shown by members of our community who are working to confront this problem, as well as those who have different investment preferences. While we share many community members’ belief in the importance of addressing climate change, we do not believe that full divestment from the fossil fuel industry is the best approach.
As individuals and as a community, we extensively rely on these companies’ products and services for so much of what we do every day – the heating and lighting of our buildings, fueling our transportation, as well as running our computers and appliances. As a long-term investor, it is difficult for us to reconcile boycotting a whole class of companies as we do not believe this represents a ‘silver bullet’ approach to the investment challenges posed by climate change.
Furthermore, divestment can cause company valuations to fall where they are more likely to shift from public markets to private equity funds, which have lower reporting obligations. Such a shift could hurt transparency and limit everyone’s ability to engage the management of these companies in discussion around climate change. We prefer to exercise these rights ourselves and that’s what our ownership of these companies allows us to do.
As a responsible trustee, we are committed to improving our understanding of our fund’s exposure to material climate change opportunities and risks across companies, sectors, regions and asset classes. Such risks and opportunities are complex, often global in nature, and addressing them effectively frequently entails collaborative approaches.
As a shareholder, we greatly favour engagement over withdrawal.
Hostplus pursues an active ownership program that engages with most ASX300 companies on ESG issues directly and collectively through the Australian Council of Superannuation Investors (ACSI).
ACSI seeks to influence companies through constructive engagement with their boards about material ESG issues, with the aim of promoting long-term shareholder value and minimising risk. Some examples of ESG risks discussed are board diversity and independence, remuneration report recommendations, carbon asset risk, human rights in supply chains and sustainability reporting disclosure.
By taking a proactive approach, we are positively contributing towards the accountability and integrity of companies, promoting a framework where organisations can be managed in the best interests of their shareholders.
We also take our proxy voting rights very seriously.
It is Hostplus’ policy to vote the proxy rights associated with all of our Australian and international equities holdings and we are committed to publicly disclosing all proxy voting records.
The latest record of Hostplus’ recent proxy voting activity is available below.
Hostplus is a signatory to the Principles for Responsible Investment (PRI).
These principles establish a collective international framework for institutional investors to integrate ESG considerations into their investment decision-making. We believe that the PRI provides an important universal framework for signatories to work together, learn from each other and to provide a collective voice on ESG issues.
Contributing more to local communities, the environment and our members.
We believe that innovative sustainable assets not only contribute to local communities and help to preserve the environment, they will also be profitable investments both now and in the future. Which means more money for our members to enjoy in their retirement.
Hostplus members are currently investing in a wide range of award-winning properties, infrastructure assets, and organisations which can be viewed below.
We have also committed over $550 million to venture capital including funds that are building water treatment systems, autonomous taxis and cars, and supporting clean energy funds to create new ways to produce, store, distribute, own and trade renewable energy.
313@Somerset Shopping Centre (Singapore)
Barangaroo South International Towers 1, 2 & 3, Sydney
Caneland central redevelopment, Mackay, Queensland
Green Square North Tower, Fortitude Valley, Queensland
500 Bourke St, Melbourne
UNSW Village, Sydney
South East Water (UK)
Sydney International Convention Exhibition and Entertainment Precinct (SICEEP)
Freeport LNG (Texas, USA)
The Ponds Shopping Centre, Kellyville
Diversification is key to successfully managing risk.
As the saying goes, it doesn't pay to put all your eggs in one basket. The same is true for investing. The key to successfully managing risk is through diversification – or spreading your investments across a range of asset classes or types of investments, so you have exposure to different markets.
Hostplus understands that markets can fluctuate, which is why we invest in a wide range of assets diversified between countries, industries and asset types. We have a very high allocation to unlisted assets which typically provide strong, stable returns when equities markets turn.
Approximately 40 per cent of our Balanced portfolio is invested unlisted assets such as direct property, infrastructure, credit and private equity – compared with many of our peers who are heavily invested in liquid assets, such as bonds and cash.
For more information on our portfolio diversification, you can view our investment holdings across each asset class below.