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We believe in being an ‘active owner’ to ensure your investment is contributing to sustainable, long-term wealth generation.

What is an ‘active owner’?

We have a responsibility to allocate your capital to productive purposes in the pursuit of sustainable, long-term investment. As a result, we believe it is part of our stewardship role to make sure our investment managers exercise their rights as shareholders. These include engagement with, and voting on, how a company operates its business. Occasionally, these active owner processes will be inadequate to achieve satisfactory outcomes and, in some instances, we may decide the best option is to divest from the investment altogether.


Why engage with a company?

We believe that the purpose of engagement is to provide feedback and signal concerns to companies about issues that will affect long term company performance. We view company engagement as the first step to affecting positive change. Engagement discussions may cover ‘how’ the company is operating, ‘why’ it chooses to operate in that way and ‘what’, if anything it will change to satisfy the concerns of investors.

Which managers engage with companies?

The degree to which our investment managers may engage with companies will depend on the strategy and nature of their investment process.

How do you engage with a company?

As a result of our monitoring or widespread public concern, we may encourage our investment managers to engage with the company management or collaborate with other investors in an engagement. These issues may relate to climate change, human rights, environmental and resource management amongst others.

As a PRI signatory, we also use the PRI’s collaboration platform, a global online tool for collaborative initiatives. For more information see our investment impact.

Proxy voting

Exercising your right to vote as a shareholder goes hand-in-hand with engagement as a method to influence how a company operates its business.

What is proxy voting and why is it important?

An important shareholder activity, proxy voting is undertaken by investment managers on our behalf to ensure the companies you’re invested in are governed appropriately. At company Annual General Meetings, companies seek shareholder approval for a variety of issues (see examples below).


Investment managers will each have their own approach to deciding on whether to cast a ‘For’, ‘Against’ or ‘Abstain’ vote for each resolution. Some may use specialist service providers for voting and this may involve engagement on issues with the company as part of the process.


Where appropriate to the style of investment strategy, we expect our managers to take an active ownership approach to the companies they’ve invested in on your behalf.

What kind of issues are voted on?

Voting enables investors to have a say in the key strategic decisions of a company.


Where engagement with the company has not had the desired effect, investors can raise or support shareholder resolutions (for example on climate risk disclosure or human rights issues in a company’s supply chain).


Voting on these issues ensures a company is being governed in shareholders' interests, that company management is behaving appropriately and that company risks are being managed effectively – all key to sustainable, long-term investment.

CFSIL is currently implementing a change in its approach to proxy voting. It has appointed Hermes EOS to collate votes on company resolutions and to provide voting recommendations to CFSIL for most of the non-Australian listed equities held on behalf of customers. The change will provide customers with transparency on voting on resolutions and improve the consistency of how CFSIL is voting for most of the non-Australian equities held.

Do we know how our investment managers vote?

While we don’t direct our investment managers to vote a certain way, we do want to know how they’re voting on our (and your) behalf. This helps us remain engaged with the professionals we’ve chosen and ensure they remain able to meet the investment objectives we’ve set for each fund.

For the financial year spanning July 2020 to June 2021, we collected the proxy voting data across the majority of our Australian equity investment managers. This shows us how they voted on a range of matters for the stocks (companies) in which they invest investors’ money.



investment managers



meetings over the year



resolutions voted on



of votes were FOR



of votes were to ABSTAIN



of votes were AGAINST



of resolutions had COMBINATION votes across our managers. This means our managers had differing views on the same resolutions.



of resolutions instigated by companies’ management teams



of resolutions instigated by shareholders



of shareholder resolutions related to governance proposals



of shareholder resolutions related to social proposals



of shareholder resolutions related to environmental proposals

Find out more

For more details on our voting outcomes, please see the Voting report for Australian equities managers – FY2020–21, which shows how Colonial First State Investments Limited voted across investment managers for the financial year.



The report covers proxy voting outcomes of 31 Australian equity investment managers. There was one investment manager that did not vote. It does not cover any investment managers that were terminated during the period. It also does not cover any non-ASX listed stocks held in those portfolios. Lastly, the data does not cover voting on any ASX-listed stock held within global equity portfolios. The data was obtained directly from our investment managers and compiled by CFSIL to produce this report. Some data was enriched such that it was comparable across investment managers. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the issuer of super, pension and investment products.


Our exclusions

We recognise that within a diverse group of individuals there will be various ethical beliefs and values that will shape the approach to investing.

In general, we will not take a position on, or make judgement of, an ethical or socially responsible issue unless it is specific to our investment strategy. However, there may be some ESG risks, ethical issues and circumstances in which we believe it is appropriate to take action, whether that’s through the use of negative screens, exclusions or active engagement with our investment managers. These decisions are not made lightly, and before doing so, we aim to first influence company behaviour through other means. See our engagement and proxy voting approaches for further information.

How do we decide if an exclusion is required?

During the regular monitoring of your investments, there are many questions that concern us. The following need to be asked if we are considering an exclusion:

  • Have you, our customer, provided feedback on this issue?
  • Does the investment contravene global norms, international treaties or conventions?
  • How severe and/or material is the ESG risk?
  • Can the company or its activities be influenced through engagement and/or proxy voting?
  • Will this investment achieve sustainable, long-term wealth protection?


If we decide that the risk is great enough to warrant exclusion, we must be satisfied that your investment is not unduly affected. The following need to be answered satisfactorily:

  • Will your investment still be adequately diversified?
  • Will the investment objectives still be met?

What are our current exclusions?

In addition to those outlined in our Sanctions Policy we have two investment exclusions in place. These are exclusions against controversial weapons producers and tobacco manufacturers. 

What are controversial weapons?

Controversial weapons are those that indiscriminately kill or disproportionately harm people relative to military necessity (as defined by international humanitarian law). Through normal use, these weapons may kill civilians as well as military targets (including after conflict has ended) – thus their use is prohibited and breaches all global conventions on human rights.


Examples of these weapons include chemical and biological weapons, cluster munitions, antipersonnel landmines, depleted uranium ammunition, non-detectable fragments, incendiary weapons and blinding lasers.1


Such weapons are also subject to international laws and conventions that prohibit their manufacture, use, and which control their financing. These conventions include the Inhuman Weapons Convention, the Convention on Certain Conventional Weapons (2001), the Oslo Convention on Cluster Munitions (2008), the Ottawa Convention on Anti-personnel mines (1999), the Chemical Weapons Convention (1993) and the Biological Weapons Convention (1972).


From December 2019, Colonial First State will not invest in securities issued by companies that produce controversial weapons. The list of companies is reviewed and updated in December each year. Our current exclusion list can be viewed here.

Why tobacco producers?

Tobacco production causes many environmental, social and economic risks. The tobacco industry is a large employer of child labour and contributor to modern slavery through bonded labour.2 It is estimated by the International Labour Organisation (ILO) that 1.3 million children are employed worldwide in the sector.3


Environmental damages caused by the tobacco industry include deforestation, soil degradation by land clearing, and land and water pollution due to the extensive use of pesticides and chemicals in the agricultural and manufacturing process. From a social perspective, the product is a highly addictive drug and causes death. There is no safe level of use or exposure as death, disease and health issues arise from primary and secondary consumption.4


Investment in tobacco contravenes three major international treaties, conventions and sets of global norms principles. These include the UN Global Compact (UNGC), the UN Guiding Principles on Business and Human Rights, and the World Health Organisation Framework Convention on Tobacco Control (FCTC).


From December 2019, Colonial First State will not invest in securities issued by companies that produce tobacco. The list of companies is reviewed and updated in January each year. Our current exclusion list can be viewed here.


For further information on our exclusions commitments, please see our investment impact page.


Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the issuer of the FirstChoice range of super and pension products from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. CFSIL also issues interests in products made available under FirstChoice Investments and FirstChoice Wholesale Investments. This document may include general advice but does not take into account your individual objectives, financial situation or needs. The Target Market Determinations (TMD) for our financial products can be found at and include a description of who a financial product is appropriate for. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) carefully, assess whether the information is appropriate for you, and consider talking to a financial adviser before making an investment decision. The PDS and FSG can be obtained from or by calling us on 13 13 36.