Summary of responses to the PRI reporting and assessment tool 2008

VicSuper

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?6423.5
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?Pension or superannuation or retirement or provident fund or plan
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 benefit0
Defined contribution100
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)8.56
Listed equity (developed market, passive)56.8
Listed equity (emerging market, active)0
Listed equity (emerging market, passive)0
Fixed income - developed markets11.48
Fixed income - emerging markets0
Real estate or property6.89
Private equity2.61
Hedge fund0
Infrastructure4.6
Currency0
Commodities0
Cash9.06
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)0100
Listed equity (developed market, passive)3862
Listed equity (emerging market, active)00
Listed equity (emerging market, passive)00
Fixed income - developed markets3268
Fixed income - emerging markets00
Real estate or property0100
Private equity0100
Hedge fund00
Infrastructure0100
Currency00
Commodities00
Cash1000
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, planning to in 2008
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, passive)100
Fixed income - developed markets0
Cash0
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, passive)To a moderate extent
Fixed income - developed marketsNot at all
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)100
Listed equity (developed market, passive)40
Fixed income - developed markets0
Real estate or property90
Private equity0
Infrastructure0
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 large extent
Listed equity (developed market, passive)To a moderate extent
Fixed income - developed marketsNot at all
Real estate or propertyTo a large extent
Private equity

To a moderate extent

InfrastructureNot at all
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 analyst00.5
Research analyst00.5
RI/ESG issue policy advisor00.7
(proxy) Voting specialist00.1
Engagement specialist00
Portfolio manager00
Other (Please specify): This represents time dedicated from the Executive Manager Investments and the Chief Executive00.2
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?The Chief Executive and the Trustee.
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Yes
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Yes
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)100
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,Formal internal training,Conferences,Professional programs,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 large 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):www.igcc.org.au/content/publications/ http://www.vicsuper.com.au/www/html/971-vicsupers-activities.asp?intSiteID=1
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Sponsored industry events,Spoke at or attended conferences,Had dialogue or exchanges with peers
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Our most significant achievement in implementing Principle 1 was engaging Trucost to calculate the environmental and carbon footprints of our listed equities investments. We also publishing and promoted a public report on the carbon footprint results.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Our biggest barrier in relation to our implementation of Principle 1 in 2007 was our passive investment strategy. It is challenging to find an effective and measurable strategy to implement ESG into the management of existing passive investments.
28. Please add any overall comments and clarifications related to Principle 1 here.Enter text response here.
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) voting To a large extent
Direct engagement conducted privately To a large extent
Direct engagement conducted publiclyNot at all
Collaborative engagementTo a moderate extent
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsNot at all
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 moderate extent
Direct engagement conducted publiclyNot at all
Collaborative engagementNot at all
Other (Please specify):No Answer
31. Do you have a (proxy) voting policy?Yes - internal document
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 small 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):No Answer
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 %)10.27
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 filer
As co-filer
Planning to be lead filer in 2008
Planning to be co-filer in 2008
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,External investment managers engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively,External investment managers engaged portfolio companies collaboratively,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?To a moderate extent
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
Environmental003
Social000
Governance0021
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Benefits and compensation,Bribery/corruption,Climate change,Environment,Governance,Health,Human rights,Labour issues
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Sector exposure,Risk profile,Focus issue,Ad hoc/reactive,Other (please specify): 'Our governance advisor, Regnan, conducts a comprehensive sweep of issues across the ASX 200 to identify material ESG issues.'
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a large extent
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.Governance practices changed,Improved disclosure,Other evidence of improvement in investee company RI/ESG performance due to our activities
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?VicSuper is a founding owner of Regnan Governance Research and Engagement Pty Ltd (Regnan), a newly launched company providing a governance, research and company engagement service that is dedicated to long-term investment risk management. Regnan aims to identify material environmental, social and governance risks affecting the long-term shareholder value of major Australian companies. Regnan was initiated by VicSuper in conjunction with ARIA, BT Financial Group and Vanguard. It was launched in May 2007 and is a company wholly owned by ARIA, BT Financial Group, Hermes (UK), HESTA, LGSS, Vanguard, VFMC and VicSuper.
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?While Regnan (our new governance advisory service provider) was being set up there was less time available for the Regnan team to conduct engagement activities. Therefore the number of engagement activities undertaken was down on previous years.
50. Please add any overall comments and clarifications related to Principle 2 here.Questions 37 and 39 - we have answered zero, however this data is not recorded so the answer should be 'NA'
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)?To a small extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Global Reporting Initiative (GRI),Carbon Disclosure Project (CDP),Global Framework for Climate Risk Disclosure
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a small extent
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?Our most significant achievement in 2007 in relation to our implementation of Principle 3 was indirectly though our signatory-status to the CDP and through IGCC submissions to the Greenhouse and Energy Reporting Taskforce on the National Greenhouse and Energy Reporting Act 2007 Regulations Discussion Paper We also undertook engagement on ESG issues with our fund of funds private equity managers.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?Fund managers who ‘box tick’ and put ESG completely separate to their mainstream activities: how do we get the message across that sustainability is separate from investment returns.
58. Please add any overall comments and clarifications related to Principle 3 here.Enter text response here.
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantYes
Proxy votingYes
Engagement overlayYes
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)Yes
Other (Please specify):Not applicable
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)Yes
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?No
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 large extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?VicSuper undertook a pilot project to survey all VicSuper’s service providers on their commitment to sustainability and their sustainability performance. This pilot included investment service providers. The project is now being rolled out to all significant service providers. VicSuper participated in the development of the Australian Council of Superannuation Investors (ACSI) guidelines:”A guide for superannuation Trustees to consider environmental, social and corporate governance issues in investing” November 2007.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?The biggest barrier in 2007 in relation to our implementation of Principle 4 was that we had insufficient time to fully carry out the principle. We also experienced cynicism by financial markets in relation to the sustainability message.
71. Please add any overall comments and clarifications related to Principle 4 here.Enter text response here.
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?Used clearinghouse
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?Yes
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:Making the date of the entry clear.
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,Enhanced Analytics Initiative (associate member) (EAI),Investor Group on Climate Change, Australia/New Zealand (IGCC),Investor Network on Climate Risk (INCR),United Nations Environmental Program Finance Initiative (UNEP FI),Other (please specify): 'The Australian Business and Climate Group'
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)IGCC Australia/New Zealand: VicSuper chaired this group in 2007. The IGCC has spearheaded a number of research reports into climate change as an investment issue. In 2007 this included coordinating the Australian and New Zealand CDP5 process, providing a number of submissions to government, delivering a number of presentations at conferences and other events, and releasing a number of research reports.
United Nations Environmental Program Finance Initiative (UNEP FI)UNEP FI: VicSuper is an active member of a number of global and Australasian UNEP FI working groups, and also spoke at the UNEP FI Global Roundtable conference.
Other (please specify)
VicSuper was a member of the Australian Business and Climate Group. This group consisted of VicSuper, BP Australia, Anglo Coal Australia, Deloitte, Mirvac, Rio Tinto, Santos, Swiss Re and Westpac. The group was formed in support of establishing an integrated national climate change response for Australia. It released a report in 2007 called “Stepping up: accelerating the deployment of low emission technology in Australia”.
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Due to the high level of activity achieved in 2007, VicSuper’s chairing of the IGCC Australia/New Zealand group was our most significant achievement in relation to Principle 5.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?Barriers to the implementation of Principle 5 included the different levels of understanding across our peer group, and different acceptance levels of the need to act on ESG issues.
79. Please add any overall comments and clarifications related to Principle 5 here.Enter text response here.
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
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):Disclosed on the VicSuper website, through member (beneficiary) reports (available on the VicSuper website), and through VicSuper's online sustainability report. www.vicsuper.com.au/www/html/157-vicsuper-investments.asp www.vicsuper.com.au/www/html/167-fo
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):Disclosed on the VicSuper website: http://www.vicsuper.com.au/www/html/164-corporate-governance.asp
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):http://www.sustainabilityreport.vicsuper.com.au/www/html/1542-governance-engagement.asp
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?To a large extent
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):On the VicSuper website, through member (beneficiary) reports (available on the VicSuper website), and through VicSuper's online sustainability report and printed concise sustainability report. www.vicsuper.com.au http://www.sustainabilityreport.vicsuper.com.au/www/html/1554-un-pri.asp
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?To a moderate extent
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Investment decisions,Engagement,New employment/positions created,Improved communications on ESG,Provision of new research
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?To a small extent
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.)?To a moderate extent
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?We reported our progress against the UNPRI in our annual sustainability report.
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?Our biggest barrier to implementing Principle 6 is being able to keep the ESG message relevant to our members, and attempting to communicate it in a way that is interesting and easy to understand.
96. Please add any overall comments and clarifications related to Principle 6 here.Enter text response here.
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?Not at all
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.We do not yet invest (directly) in emerging markets.
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 Applicable
Direct engagement conducted privatelyNot Applicable
Direct engagement conducted publiclyNot Applicable
Collaborative engagementNot Applicable
Filing shareholder resolutionsNot Applicable
Co-filing shareholder resolutionsNot Applicable
Other (Please specify): Not applicable, we do not invest in emerging markets.Not Applicable
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?Not Applicable
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.NA
2.NA
3.NA
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?
AdoptionNo Answer
AdherenceNo Answer
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?Not at all
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Not at all
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?Not at all
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.We do not invest directly in emerging markets, so the areas selected 'not at all' above, should be 'not applicable'.
111. What is your top PRI-related goal/priority for emerging markets in 2008?We do not invest directly in emerging markets, so the areas selected 'not at all' above, should be 'not applicable'.
Closing Comments
112. Why did your organisation join the PRI?Sustainability is VicSuper’s central operating principle. We aim to be a sustainable superannuation fund and believe that initiatives such as the PRI provide great exposure and structure for other financial institutions to also increase their sustainability. The aspirational and non-prescriptive nature of the PRI is also appealing.
113. Please describe the benefits you have enjoyed as a result of signing the PRI:Benefits of being a PRI signatory include access to international collaborative ESG initiatives, access to better networks, and access to a reporting and guidance framework for ESG.
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?The PRI has definitely raised awareness of ESG issues in the financial services sector. Markets, however, are still too dismissive of ESG factors.
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.Ensuring the PRI does not develop a ‘free rider’ problem.
2.Ensure that the PRI retains its reputation as an initiative that is delivering real change.
3.Ensure that signatories continue to develop new strategies to implement the Principles, and ensure that both signatories and the PRI communicate these developments to the financial markets.
116. What are your top three PRI-related goals/priorities for 2008?
1.Better disclosure of ESG issues, risks, opportunities and activities
2.More active engagement on ESG issues with investee companies and fund managers
3.Quantify the global carbon footprint of our listed equity portfolio (for investment risk)
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 4
2Principle 5
3Principle 3
4Principle 1
5Principle 2
Least difficult
6
Principle 6