As a profit-for-member superannuation fund, Hostplus is run only to benefit members. It is our duty to deliver the best retirement outcomes to our members. We also widely support, and invest in, the hospitality, tourism, recreation and sport sectors that our members work in, live and love. These responsibilities guide every decision we make, and great care is taken to ensure each action fulfils our duties to our members.
Responsible investment is an important part of our investment approach that helps us better manage risk and optimise retirement outcomes for our members.
Responsible investment involves incorporating environmental, social and governance (ESG) factors into investment decisions and active ownership. Responsible investment beliefs direct our approach, which involves:
Hostplus is committed to responsible investment across all its investment activities, including all geographic locations, all asset classes, all structures and all styles.
To find out more about our approach to responsible investment, you can read our Responsible Investment Policy.
Hostplus is a signatory to the Australian Asset Owner Stewardship Code (the Stewardship Code) and is pleased to have adopted all its six principles.
Being a signatory to the Stewardship Code allows us to continue to proactively manage and disclose the stewardship activities we undertake on behalf of our members.
These activities are consistent with our desire to create value for members by influencing companies to change their behaviour in ways which protect and enhance long-term, sustainable value.
To see how we implement the code, view the statement below:
“As a global long-term investor and signatory to the United Nations-supported Principles for Responsible Investment, Hostplus acknowledges that climate change will have a wide range of consequences that may impact our investment portfolio. We are committed to considering climate change in selecting and assessing the Fund’s investments in companies, sectors, regions and asset classes.”
While climate change is only one component of Hostplus’ ESG considerations, we recognise it is one of the largest economic challenges facing investors today – physically, socially and legally.
We recognise climate change as a financial risk to the fund's investments, which includes the risk of costs associated with physical damage to the fund's assets resulting from climate change impacts on the weather, regulatory changes and other costs to transition to a lower-carbon economy and litigation risk. Like other financial risks, climate change risks are taken into account to the extent they are relevant to the fund's overall investment strategy and investment portfolio.
As a responsible trustee, we are committed to improving our understanding of Hostplus’ 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 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. We share many community members’ belief in the importance of addressing climate change and think the best approach for our Fund is to consider climate change as a financial risk and incorporate such considerations into our investment decisions and manager selection to the extent possible.
As individuals and as a community, we extensively rely on the products and services of companies in the fossil fuel industry for so much of what we do every day – the heating and lighting of our buildings, fuelling 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 with Management at 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.
Hostplus’ investment strategy for each investment option is carefully considered by the Trustee, with assistance from our investment advisor.
The considerations take into account many different themes that impact investment markets around the world. One of the major structural themes is climate change.
Additionally, the Trustee stress tests Hostplus’ investment strategy for numerous scenarios, including scenarios which consider climate change. These stress tests help to inform decisions around the appropriate investment strategy.
With climate change being such an important consideration for future investment returns, we are looking to further incorporate it into our investment approach over time.
As a shareholder, Hostplus favours engagement over divestment.
In this context, engagement means two-way constructive communication between us and investee companies on matters such as the organisation’s performance, strategy, ESG issues, leadership, quality and level of reporting.
In order to maximise our ability to constructively engage with multiple companies we primarily engage with companies collectively through the Australian Council of Superannuation Investors (ACSI), which represents a number of Australian and international asset owners.
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 company board diversity and independence, remuneration report recommendations, carbon asset risk, human rights in supply chains and sustainability reporting disclosure.
By taking a collective engagement approach, we are able to exert greater influence beyond our own shareholding in an investee company and to manage resources more effectively. As an ACSI member, Hostplus also actively influences ACSI’s priority engagement themes and companies each year.
At Hostplus, we 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.
You can find the latest record of Hostplus’ recent proxy voting activity below.
January to June 2020
ASX Proxy Voting Record
Hostplus is a signatory to the United Nations-supported Principles for Responsible Investment (PRI).
These principles establish a collective international framework for institutional investors to integrate ESG considerations into their investment decision-making.
The principles are:
Hostplus believes that the PRI provides an important universal framework for signatories to work together, learn from each other and provide a collective voice on ESG issues. We also believe that the PRI will continue to grow as a framework for investors to communicate their expectations on ESG issues to their investee companies.
Contributing more to local communities, the environment and our members.
Hostplus believes 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 companies which can be viewed via the link below.
We have also committed over $1 billion to Australian venture capital managers, 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.
You can find out more about our socially responsible assets, by following this link:
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.
In contrast to our peers, some of which have higher allocations to bonds, our Balanced portfolio is invested unlisted assets, such as direct property, infrastructure, credit and private equity, which typically provide strong, stable returns when equity markets turn.
For more information on our portfolio diversification, you can view our investment holdings across each asset class below.