Summary of responses to the PRI reporting and assessment tool 2008

Victorian Funds Management Corporation

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?41000
Please select currencyAustralian dollar (AUD)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
2. What category would best describe your organisation?Other (please specify): '50% super, 50% insurance'
3. What proportion (in %) of your fund is defined benefit and what proportion (in %) is defined contribution? (please only answer this question if you answered “Pension or superannuation or retirement or provident fund or plan” to Q2)
Defined benefit
Defined contribution
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)40
Listed equity (developed market, passive)4
Listed equity (emerging market, active)2
Listed equity (emerging market, passive)0
Fixed income - developed markets46
Fixed income - emerging markets0
Real estate or property1
Private equity1
Hedge fund1
Infrastructure3
Currency0
Commodities0
Cash2
Other (Please specify): 0
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)397
Listed equity (developed market, passive)0100
Listed equity (emerging market, active)0100
Listed equity (emerging market, passive)00
Fixed income - developed markets5050
Fixed income - emerging markets00
Real estate or property0100
Private equity5050
Hedge fund0100
Infrastructure7030
Currency00
Commodities00
Cash0100
Other (Please specify): 00
Principle 1
7. Do you have a formal investment policy statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?No
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Noanswer
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):No Answer
12. For what percentage of your internal assets under management do you integrate RI/ESG issues into your internal investment decision-making processes? (in %)
Listed equity (developed market, active)50
Fixed income - developed markets0
Private equity0
Infrastructure50
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, active)To a moderate extent
Fixed income - developed marketsNot at all
Private equityNot at all
InfrastructureTo a moderate extent
14. For what percentage of your external assets under management are RI/ESG issues integrated into the investment decision-making processes of your external investment managers? (in %)
Listed equity (developed market, active)50
Listed equity (developed market, passive)0
Listed equity (emerging market, active)0
Fixed income - developed markets0
Real estate or property0
Private equity0
Hedge fund0
Infrastructure0
Cash0
15. To what extent have RI/ESG issues been integrated into the investment decision-making processes of your external investment managers?
Listed equity (developed market, active)To a small extent
Listed equity (developed market, passive)Not at all
Listed equity (emerging market, active)Not at all
Fixed income - developed marketsNo Answer
Real estate or propertyNo Answer
Private equityNot at all
Hedge fundNot at all
InfrastructureNo Answer
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst00
Research analyst00
RI/ESG issue policy advisor00.5
(proxy) Voting specialist01
Engagement specialist00
Portfolio manager00
Other (Please specify):00
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?VFMC Board
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Planning to in 2008
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Planning to in 2008
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)8
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Conferences,Regular briefings on key issues
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a small extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):Australian company ESG data available through a related company: Regnan
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Spoke at or attended conferences,Had dialogue or exchanges with peers,Other (please specify): '0'
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Signed the principles ourselves Discussed potential projects and methodologies internally
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Time and cost
28. Please add any overall comments and clarifications related to Principle 1 here.We're just starting
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a moderate extent
Direct engagement conducted publiclyNot at all
Collaborative engagementTo a small extent
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsTo a small extent
Other (Please specify):No Answer
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingNot at all
Direct engagement conducted privatelyTo a small extent
Direct engagement conducted publiclyTo a small extent
Collaborative engagementTo a small extent
Other (Please specify):No Answer
31. Do you have a (proxy) voting policy?Yes - disclosed publicly
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
EnvironmentalTo a small extent
SocialTo a small extent
GovernanceTo a large extent
33. Does your (proxy) voting policy apply to all voting regions (where possible)?Yes
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):email request to esmith@vfmc.vic.gov.au
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?Yes for all
36. What percentage of total votes cast were against management? (in %)10
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental0
Social0
Governance0
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer0
As co-filer0
Planning to be lead filer in 20080
Planning to be co-filer in 20080
40. How were portfolio companies engaged with in 2007? Please check all that apply.An external engagement overlay service was employed
42. Do you systematically ask your external investment managers to bring RI/ESG issue-related engagement opportunities to you?Planning to in 2008
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental0100100
Social0100100
Governance1002000
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Climate change,Environment,Governance,Health and safety,Labour issues
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Client directive
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?Planning to in 2008
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.Governance practices changed,Improved disclosure,Collaborative work with a company on a specific ESG issue
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?just starting
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?RESOURCING
50. Please add any overall comments and clarifications related to Principle 2 here.Enter text response here.
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?Not at all
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?No Answer
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?Not at all
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionPlanning to in 2008
AdherencePlanning to in 2008
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?No Answer
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?just starting
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?just starting
58. Please add any overall comments and clarifications related to Principle 3 here.just starting
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantNot applicable
Proxy votingYes
Engagement overlayYes
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)No
Other (Please specify):Not applicable
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringNo
Incentive structure (internal investments)No
Incentive structure (external investments)No
Contractual relationships with external investment managersNo
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?Yes
62. To what extent do you encourage your service providers to become PRI signatories?To a moderate extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a moderate extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?To a moderate extent
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?Planning to in 2008
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a small extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?just starting
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?just starting
71. Please add any overall comments and clarifications related to Principle 4 here.just starting
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?No
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?No Answer
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:We don't know enough about it
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:Carbon Disclosure Project,Investor Group on Climate Change, Australia/New Zealand (IGCC)
76. Please indicate the three RI/ESG issue-related collaborative engagement initiatives and/or industry associations that you participated in most extensively and indicate how you did so:
Investor Group on Climate Change, Australia/New Zealand (IGCC)joined in December
Carbon Disclosure Projectconsidering
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?just starting
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?just starting
79. Please add any overall comments and clarifications related to Principle 5 here.just starting
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):contact us
82. To what extent do you disclose your annual (proxy) voting record?Disclose votes only
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):contact us
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a moderate extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):currently reporting to clients only
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?No Answer
87. Please indicate how your communication on RI/ESG issues and the PRI to beneficiaries or plan participants can be obtained (if it is publicly available, a URL would be sufficient):No Answer
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?Planning to in 2008
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Not applicable
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?To a moderate extent
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?Planning to in 2008
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?Planning to in 2008
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?just starting
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?just starting
96. Please add any overall comments and clarifications related to Principle 6 here.just starting
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?To a small extent
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.too early to comment
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To the same extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingNot at all
Direct engagement conducted privatelyNot at all
Direct engagement conducted publiclyNot at all
Collaborative engagementNot at all
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsNot at all
Other (Please specify): na Not Applicable
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?Not at all
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.
2.
3.
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionNot at all
AdherenceNot at all
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?To a small extent
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?To a small extent
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?Not at all
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?Planning to in 2008
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?Not at all
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.No Answer
111. What is your top PRI-related goal/priority for emerging markets in 2008?No Answer
Closing Comments
112. Why did your organisation join the PRI?To learn more about ESG and join networks
113. Please describe the benefits you have enjoyed as a result of signing the PRI:We have learned a lot amd made contact with like minded investors
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?early days
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.provide info on programs
2.provide research of effectiveness of programs
3.hold a local forum
116. What are your top three PRI-related goals/priorities for 2008?
1.international proxy voting
2.widen engagement
3.develop internal research on ESG
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 3
2Principle 2
3Principle 1
4Principle 6
5Principle 5
Least difficult
6
Principle 4