At Colonial First State, we understand that you may have personal moral or ethical views. As respectful stewards of your investments, we believe it is important to invest in a sustainable and responsible way on your behalf.

What are climate and ESG factors?

Environment

The value, growth and sustainability of an investment may be impacted by environmental changes and risks. These risks may be real or perceived, or the business of the company may impact the environment and incur financial and reputational penalties.

  • Land use – logging and land clearing, causing loss and destruction of soil vegetation and habitat. This leads to possible extinction of wildlife.
  • Waste and pollution – improper disposal of waste, chemical leaks and spills. This leads to reduced air quality and the contamination of water and land.
  • Resource depletion – intensive agriculture could cause changes to local water supplies and be significant enough to require additional water infrastructure.
  • Climate change – fossil fuel extraction and use, creating greenhouse gas emissions and contributing to global warming.

Social

The value, growth and sustainability of an investment may be impacted by social risks, where the investment may be impacted by social, labour and human rights risks.

  • Health and safety – unsafe or unhealthy working conditions for workers.

  • Community – the treatment of indigenous communities, including re-settlement and land acquisition.

  • Human Rights – encompassing issues such as bonded labour, modern slavery and child labour.

  • Labour standards – ranging from being paid unfair wages and having to work unfair hours, to not having access to labour unions or methods of labour protection.

Governance

The value, growth and sustainability of an investment may be impacted by social risks, where the investment may be impacted by social, labour and human rights risks.

  • Transparency and accountability – poor internal activities that may result in lack of transparency and lead to poor decision-making.

  • Fraud and corruption – inappropriate risk-taking or weak policies and risk management that can result in fraud.

  • Board diversity and independence – diversity of gender, independence, background, skills, experience and personal attributes could provide a quality board that is free from undue influence.

  • Voting procedures – allowing shareholders to exercise their rights through ownership practices such as engagement and raising shareholder resolutions, a company will bring to light unaccounted for or neglected risks.

Climate

Climate change poses significant risks to our environment, economy and society.

  • Physical risks from the direct impact of climate change on our physical environment – through loss of resource availability and biodiversity, supply chain disruptions or damage to assets from severe weather events such as storms, floods, fires, droughts, tornados, hurricanes/monsoons, tsunamis and earthquakes, as well as rising global average temperatures, rising sea levels and ocean carbonisation.

  • Transition risks from the much wider set of changes across policy, law, markets, technology and costing to address the mitigation and adaptation requirements necessary for the transition to a low-carbon economy.

Discover Thrive+

CFS Thrive+ Sustainable Growth is our new sustainable investment option. Our aim is to make a positive contribution to people, planet, and policy.

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Disclaimer

Information on this webpage is provided by Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL). It may include general advice but does not consider your individual objectives, financial situation, needs or tax circumstances. You can find the Target Market Determinations (TMD) for our financial products at www.cfs.com.au/tmd, which include a description of who a financial product might suit. You should read the Financial Services Guide (FSG) available online for information about our services. This information is based on current requirements and laws as at the date of publication.
Tax considerations are general and based on present tax laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.
AIL and CFSIL are not registered tax (financial) advisers under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise under a tax law.