Environmental, Social and Governance (ESG) Policy
As Trustee, Maritime Super has a fiduciary and regulatory responsibility to act in the best interests of members. This includes responsibility to manage member assets in a prudent manner. Assessing and managing investment risks is an important aspect of Maritime Super’s risk management framework, within Maritime Super’s overall governance structures.
We believe that Environmental, Social and Governance (ESG) factors may impact investment performance over the long term. Companies and other assets that soundly manage all risks are more likely to be financially sustainable over time and therefore deliver better long-term returns. Consideration of ESG risks is therefore a component of Maritime Super’s risk management framework.
- Environmental factors include climate change, energy efficiency, water scarcity, and waste treatment practices. Maritime Super recognises that climate change is a key Environmental factor and may pose both risks and opportunities for the long-term performance of members assets.
- Social factors include human capital, workplace health and safety, industrial, community and stakeholder relations. Companies today must recognise that they operate under a social licence; and that engagement with their employees and with the wider community should reflect these obligations. From a financial perspective, companies that respect human and labour rights will face a lower level of Social risk and be more financially sustainable, enabling them to deliver better long term returns for members, while also providing a better outcome for society.
- Governance factors are very wide ranging, including business ethics, transparency of company management and reporting, executive remuneration and board structure. The Fund places a strong emphasis and weight to proper governance. Well governed companies and assets typically face lower levels of ESG risk as a result of a strong governance culture, appropriate policies and procedures, enabling them to deliver sustainable long term returns for members.
Consideration of ESG risks are incorporated in our investment process. We require our investment advisors and investment managers to consider ESG matters as part of their investment processes. The ESG policy and processes of an investment manager is one of the items assessed as part of the Fund’s due diligence process when appointing an investment manager, with minimum standards required. Investment managers are monitored in relation to their ESG practices on an ongoing basis.
We acknowledge that the consideration of ESG issues in investment management is growing in importance worldwide. Maritime Super attempts to understand the broader implications both locally and internationally of ESG issues and networks widely to ensure proper consideration. We continue to monitor developments and engage in debate so that, in the best interests of all members, an appropriate balance of all considerations is maintained.