Cbus ESG Policy
Cbus believes that Environmental, Social and Governance (ESG) issues are material investment matters and as such should be incorporated into investment processes. It is therefore Cbus’ intention that, as long as returns to members are not detrimentally impacted, we will prefer to invest with fund managers who have incorporated ESG in their investment process.
We do this because:
- It is consistent with our fiduciary obligations to our members in the light of changing external conditions.
- We expect it will lead to better returns for members.
- ESG issues are expected to impact on the long-term sustainability of companies and assets, and therefore form an important input to the risk management process.
- Organisations that manage the risks and opportunities arising from ESG issues effectively are likely to be more successful than those that do not over the long-term.
To encourage fund managers to integrate ESG the Cbus Investment Committee takes the following actions:
- Include a clause requiring fund managers to consider ESG issues within their investment processes in all new or renegotiated Investment Management Agreements
- Assess fund managers’ abilities to incorporate ESG in their investment process as part of the manager assessment and due diligence process.
- Measure fund manager progress in integrating ESG annually as part of the manager review and sector review processes, and by asking fund managers to report on their ESG activity.
- Encourage fund managers to sign the PRI and to source and review ESG related research.
Cbus notes that integration of ESG in the investment process does not imply the exclusion of particular companies from the investment universe on ethical grounds. Instead, integration of ESG requires that the impact of any ESG issues on the value of a company is included in the valuation process.
Cbus notes that in addition to the work carried out by its fund managers, it pursues an active share ownership program.
