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 we exercise our rights as shareholders. These include engagement with, and voting on, how a company operates its business, and we may delegate these actions to either our managers or another third party. 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. On top of engagements that our investment managers may undertake, CFS may choose to engage with companies according to the engagement plan across all our holdings.

How does CFS engage with a company?

To assist us with our engagement of global investee companies, CFS has appointed a stewardship provider, EOS at Federated Hermes. With our engagement framework in mind, EOS will engage with companies on our behalf and keep us informed of their progress. 


If you would like to read more about the engagements undertaken throughout 2022, please see our Annual engagement report


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, as well as being involved in several industry wide initiatives. For more information see
our memberships and collaborations.

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.

Why engage with a company?

From time to time, and at least annually, companies seek shareholder approval for a variety of issues. This important shareholder activity ensures the companies you’re invested in are operating appropriately. When the responsibility to vote on behalf of the shareholder is delegated to someone it is known as a proxy vote.
At CFS we believe active ownership can lead to better long term returns and so we have appointed a third–party proxy adviser to help us vote on the global equities held on your behalf. They will make recommendations on how to vote but the final decision will rest with CFS, to ensure it is in the best interest of all our customers.
This will provide our customers with transparency on voting on resolutions and improve the consistency of how CFSIL is voting for most of the non-Australian equities held.
Our managers will continue to vote on our (and your) behalf for the Australian equity holdings.

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.


To assist us with our proxy voting duties, CFS has appointed a third–party proxy adviser to collate votes on company resolutions and to provide voting recommendations for most of the non-Australian listed companies we invest in. This will enable us to provide you with transparency and improve the consistency of how CFS is voting for most of the non-Australian companies held.

Do we know how votes have been cast?

Our voting records from 1 January 2022 are available by clicking on the link below. This allows us to keep you informed on how votes have been cast across all CFS holdings in the most timely manner.
For further information on how to use this tool be please see the guide '
How to read the VDS Dashboard'.
VDS Dashboard (issgovernance.com)

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:

  • 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.

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.

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.

1. International Committee of the Red Cross, 'International Humanitarian Law Database′.
2. Human Rights Watch, 2018, 'A bitter harvest – child labour and human rights abuses on tobacco farms′.
3. International Labour Organisation (ILO), 2011, '
Child labour, commercial agriculture and role of tobacco'.
4. World Health Organisation (WHO), '
Tobacco Free Initiative'.

Useful Tools


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Find a Local Adviser

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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.

Things you should know

    Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) is the trustee of the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557 and issuer of FirstChoice range of super and pension products. Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) is the responsible entity and issuer of products made available under FirstChoice Investments and FirstChoice Wholesale Investments.

    Information on this webpage is provided by AIL and 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 https://www.cfs.com.au/tmd which include a description of who a financial product might suit. 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. You can get the PDS and FSG at www.cfs.com.au or by calling us on 13 13 36.