1. ESG Integration: ESG and climate change factors are integrated into the investment decision-making process through an analysis of the investments in our portfolios. This is done prior to appointing any investment manager and on an ongoing basis. Colonial First State’s approach is to:
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We identify the ESG and climate risks and opportunities of each portfolio.
We seek to understand the drivers of these risks and opportunities, and what our investment managers are doing to manage them.
We take appropriate actions (that is, how we choose to engage with investment managers and, where appropriate, seek change).
We report internally on the ESG and climate risks within each portfolio.
We have committed to being transparent regarding how we manage ESG considerations and to also annually disclose our progress against our commitments, aligning our reporting with established standards.
We carefully track the ESG and climate risks and opportunities for each portfolio on an ongoing basis.
We will manage, reduce and/or mitigate the ESG and climate risks of each portfolio over time.
Our team is committed to following these principles when making asset allocation decisions and changes to investment managers. As part of our due diligence process, we:
- Research how each of our managers takes ESG factors into account
- Calculate the ESG ratings and carbon footprint of any investment changes being proposed
- Carefully assess each of our managers’ approaches to ESG risk and stewardship (for example, their voting and engagement record), in order to understand their investment decisions.
This allows us to have informed conversations with our investment managers on the risks and opportunities their actions are bringing to their portfolios – and, in turn, to you.