Sustainable investment is about considering the impact our investments have on society and the world around us alongside other financial outcomes and business factors. AMP is on a sustainable investing journey. Our intention is to:
We will exclude investing in companies involved in controversial activities.
Where possible, we will tilt towards the “good” by investing in companies that do a better job of managing environmental, social and governance (ESG) issues. We aim to achieve this by selecting indices for our funds to track that have higher ESG ratings (where available and appropriate).
We will engage with companies and use proxy voting to promote sustainability. Our underlying investment management services provider, BlackRock, will undertake these activities on our behalf (or in consultation with us).
We “look-through” layers of company ownership to also exclude investing companies that own certain percentages of other companies involved in these excluded areas. This means that we may invest in companies that own smaller percentages of other companies involved in the excluded areas.
Refer to the AMP Sustainable Investment Philosophy for more detail.
What does ESG mean? Here's a quick guide on some common ESG factors.
Environmental factors cover themes such as energy use, waste, pollution, natural resource conservation, treatment of animals, climate risks and how the company is managing those risks.
For example, are there issues related to its ownership of contaminated land, its disposal of hazardous waste, its management of toxic emissions, or its compliance with government environmental regulations?
Social factors look at the company’s business relationships.
Does the company work with suppliers that hold the same values as it claims to hold?
Does the company donate to the local community or encourage employees to perform volunteer work?
What are the company’s working conditions like – do they look after their employees’ health and safety?
Are other stakeholders’ interests considered?
Governance factors relate to corporate governance and behaviour such as board quality and effectiveness.
Does the company use accurate and transparent accounting methods?
Are shareholders given an opportunity to vote on important issues?
Does the company avoid conflicts of interest in their choice of board members?
Does the company use political contributions to obtain unduly favourable treatment?
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The AMP investment philosophy sets out the core principles we follow when investing our clients’ money. We believe that following these principles will deliver good outcomes for our clients, particularly when supported by our product and help strategies.
AMP Investment Philosophy
The AMP Sustainable Investment Philosophy is based on a framework of principles. The approach has three key elements: Sustainable Investment Exclusions; Integration of Environmental, Social and Governance (ESG) considerations into our investment decisions; and Stewardship through voting and engagement with companies.
Sustainable Investment Philosophy
AMP Capital takes into account labour standards, environmental, social, ethical and governance considerations in the selection, retention or realisation of investments across all asset classes (other than cash, sovereign bonds, derivatives and exchange traded funds).
At present the application of AMP Capital’s ESG principles will result in the exclusion of companies that AMP Capital believes have: Involvement in the manufacture, maintenance or delivery of cluster munitions, anti-personnel mines, chemical or biological weapons, Involvement in the manufacture or testing of nuclear explosive devices, Involvement in the production and manufacture of, or essential or significant involvement in the distribution and sale of, tobacco, and Involvement in the production of civilian firearms.
For more information on AMP Capital's approach to sustainable investment, visit ampcapital.com/nz/en/about/responsible-investment.
ASB incorporates ESG considerations into investment decisions to better manage risk and generate sustainable long-term returns, while aligning with the values of the community. ASB's underlying managers vote at shareholder meetings on its behalf. Where appropriate, managers support positive change and progress towards more responsible and sustainable practices. ASB has a framework in place to exclude certain investments where required by law, if activities are opposed to their own purpose and values, if its peers in New Zealand have excluded an investment or industry, or if the majority of ASB's customers have a strong desire not to invest in it or its industry. ASB currently does not invest in controversial weapons (companies that are involved in the development or production of cluster munitions; the use, acquisition, possession or transfer of anti-personnel mines; and the manufacture, acquisition or possession of, or control over, any nuclear explosive devices), tobacco, whale meat and the manufacture and/or sale of banned firearms to civilians.
For more information on ASB's approach to sustainable investment, visit asb.co.nz/investment-advice/responsible-investment.html
Nikko AM believes that the three core factors behind sustainable investing - environmental, social, and governance - are inherent to long-term value creation. It believes incorporating them in the investment process is consistent with its fiduciary duty. Nikko AM considers sustainability means managing the challenges and risks facing all organisations to meet the needs of the present, without compromising future generations.
For more information about Nikko AM's commitment to sustainable investment, visit nikkoam.co.nz/invest/retail
Nikko AM manages sustainable investment challenges and risks at an asset class level. More information is on the specific rules applicable to each asset class are set out in Nikko AM's Statement of Investment Policy and Objectives available at nikkoam.co.nz/invest/retail
ANZ integrates ESG factors into its investment management process, because it believes that these factors are some of the drivers of long-term investment risks and returns.
When assessing an investment, it looks at a range of financial and non-financial criteria. Financial criteria can include balance sheet strength, valuation, and expected future earnings. Non-financial criteria can include management strength, industry composition, environmental factors (e.g. pollution, resource usage, climate change), social factors (e.g. human rights, health and safety, diversity) or governance factors (e.g. corruption, transparency, or board structure). ANZ does not make investments in companies or industries based solely on ESG factors.
Companies or industries that have one or more ESG issues are subject to further consideration. This takes into account global best practice, their view of the expectations of investors, the impact of an exclusion on returns, the severity of the ESG related issues, and the likely success of an alternative course of action (for example, engagement). This approach is applied to both existing investments and potential future investments. Depending on the results of the review, ANZ may continue to hold, review on a periodic basis, divest, or exclude the company or industry as an investment.
For more information on ANZ's approach to sustainable investment, visit anz.co.nz/responsibleinvesting
Mercer is committed to sustainable and ethical investment. Mercer believes investing sustainably is as much about what it invests in, as it is what it doesn’t. It believes a sustainable investment approach is more likely to create and preserve long-term value. Mercer's approach to sustainable investment is based on the following principles:
Commitment – seeking to help shape the environmental, social and governance agenda for investors globally.
Sustainable themes –investing in assets which are sustainable in a time of climate change, like renewable energy, water technology, and pollution control.
Integrated approach – including environmental, social and governance factors into their manager selection process, and evaluating and selecting managers that focus on sustainable long term returns.
Engagement – investment managers seek to positively influence the companies they invest in by engaging with them, sometimes behind the scenes and sometimes in public. Proxy voting– actively voting on resolution sat company meetings to let the directors know what’s important to investors.
Exclusion – excluding those companies or sectors that the Manager has said they don’t want to invest in. Currently, Mercer excludes tobacco and controversial weapons, such as cluster munitions and nuclear weapons.
For more information on Mercer's approach to sustainable investment, visit https://www.mercerfinancialservices.co.nz/responsible-investment.html
1: AMP-branded funds refers to funds with the prefix ‘AMP’ (except for the AMP Balanced Fund No. 3). These funds will be managed by AMP with support from BlackRock. The AMP Balanced Fund No. 3 will have no immediate change to its underlying investment mix, but it is proposed that, subject to approval by the AMP Investment Committee, the underlying assets of the AMP Balanced Fund No. 3 will transition to be managed by AMP with support from BlackRock Investment Management in the coming weeks. Funds with the prefix ‘AMP Capital’ will continue to be managed by AMP Capital. Refer to the product tables here to see which funds are adopting AMP’s sustainable investment approach.
The information included on this website is of a general nature and does not constitute financial or other professional advice. Before taking any action, you should always seek financial advice or other professional advice relevant to your personal circumstances. For financial advice, we recommend you contact your Adviser. If you don’t have an Adviser, contact us on 0800 267 5494.
While care has been taken to ensure that the information in this communication is accurate, no entity or person gives any warranty of reliability or accuracy, or accepts any responsibility arising in anyway, including from any error or omission.
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For more information, download a copy of the AMP KiwiSaver Scheme Product Disclosure Statement and Fund Update Booklet, which have been lodged on the Scheme's offers register entry at companiesoffice.govt.nz/disclose.