Sustainable and ethical super

We invest your money sustainably to help maximise your returns, make a positive impact and be part of a brighter, more sustainable future.

Being ethical and sustainable can mean different things to different people, so it’s essential to understand what they mean in practice and why they are important when it comes to matching a super fund with your investment objectives and your ethical values and beliefs.

Defining ‘sustainable and ethical superannuation funds’

 

Sustainable investing

The term ‘sustainable’, the ‘ability to sustain’, is typically defined as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”.

In addition to financial factors, sustainable investment approaches consider environmental, social and corporate governance (ESG) factors, often missing in traditional approaches for more holistic decisions.

Ethical investing

‘Ethical’ is a more subjective term because it is based on what a person feels is right or wrong. That can differ depending on your beliefs, your life experiences and what you enjoy.

We understand that Australians are increasingly wanting to align their ethics and consider how their super fund addresses the issues most important to them. This can be achieved in different ways. You should consider the details of your investment options to work out what is right for you.

 

We take a holistic, sustainable approach to your investments

At Mercer Super, we believe that taking a holistic approach to investing is paramount, so we consider the environmental, social, corporate governance (ESG) and ethical factors, alongside financial performance when making investment decisions, to help deliver you stronger returns.

Although we look at a significant number of ESG factors when reviewing sustainable investment risks and opportunities, some examples include:

An icon of two trees

Environmental

Climate change

Water

Waste and pollution

Biodiversity

An icon of two people

Social

Health and safety

Labour standards and modern slavery, including supply chains

Human rights and community

Demographics/consumption

An icon of two buildings

Governance

Board diversity composition and effectiveness

Executive remuneration

Conduct, culture and ethics

Shareholder rights

Our approach to sustainable investing

  • Embedded in all of our investment options

    At Mercer Super, sustainability is embedded in all of our investment options and is one of the key considerations in every investment decision we make.

    To help ensure your super is invested sustainably we:

    adopt a broader view of risk and return by taking into account ESG factors as part of our decision making process

    aim to improve company and market environment prospects by being active owners and engaging directly with the companies we invest in on your behalf

    advocate for and invest in solutions to the world’s sustainability challenges

    exclude companies producing tobacco or controversial weapons

    monitor your investments and report on how they’re meeting sustainable investing and financial performance targets

  • Four pillars of sustainable investment implementation

    We implement our sustainable investment approach through four pillars:

    1.    Integration: we take a broader view on the risk and return of an investment by looking at the environmental, social and governance (ESG) factors.

    2.    Active ownership: we aim to improve prospects for companies or markets by being active owners through voting and engagement.

    3.    Investment: our approach is  designed to achieve long-term growth and positive ‘impact’ outcomes by allocating to companies with sustainability solutions.

    4.    Screening: align mission or values priorities by screening portfolios for products or activities causing unacceptable harm – tobacco and controversial weapons across all funds.

    The four pillars are supported by a foundation of sustainable investment beliefs, policy and processes, and communicated through clear and transparent reporting.

  • Positively and negatively screen investments

    In addition to ensuring that our initial investments are sustainable, we continuously screen and monitor our investments under the United Nations Global Compact (UNGC) Principles.

    The incidents we look for are typically related to human rights, labour, environmental and corruption issues, among others. These issues are often both ethical and tend to present financial risks to investors.

    We also set the expectation with our investment managers that they engage with companies to resolve any UNGC-related issues that we identify via our screening process, as well as reporting the progress on resolution to us.

Alexis Cheang our Head of Sustainable Investments and Komal Jalan our Sustainable Investment Manager unpack our sustainable investment approach in this video.

Match your ethos further with our Sustainable Plus options

Although all of our investment options are invested sustainably, we offer seven Sustainable Plus investment options, which go beyond the standard approach to sustainable investing.

They are invested according to a wider set of ethical criteria and have a greater exposure to sustainability-themed investments. They have a broader exclusion approach, for example, excluding companies involved in production of alcohol, carbon intensive fossil fuels like thermal coal, gambling and adult entertainment. The list of companies excluded varies for each investment option.

To review your options, login to Member Online or talk to our Helpline team.

Experienced in the sustainable investment space

As a leader in sustainable investment, we’re constantly innovating to respond to change. Everything we have learned on our almost 20 year sustainability journey is considered when we prepare portfolios for what the future might bring.

In 2021, we committed to a target of net-zero carbon emissions by 2050 for our investment options. This commitment, targeting a reduction in carbon emissions of 45% by 2030, is just one of the many steps we’ve taken over the last 20 years to put sustainability at the forefront of our investments.

Key milestones

  • Open all
  • |
  • Close
  • 2004

    Global advisory team established on sustainable investment (then called responsible investment), which is now more than 25 dedicated professionals, plus a growing global network of champions.

  • 2006

    Mercer helped shape the Principles for Responsible Investment, the leading global industry initiative, and is a founding signatory.

  • 2010

    Created ESG ratings for investment manager strategies globally (now over 5,500 strategy ratings), which the investment team utilise in decision making.

  • 2011

    Published our first major climate change research for investors.

  • 2014

    Sustainability was captured as one of five key aspects in Mercer’s global investment beliefs and we published the first formal Mercer Super sustainable investment policy.

  • 2015

    Published Investing in a Time of Climate Change, flagship global industry report on climate scenario modelling for investors.

  • 2016

    New sustainability focused products began launching, for example global equities.

  • 2018-2019

    Published The Sequel climate change report and continued to expand the investment team’s approach to sustainable investment with Kylie Willment joining as the new Chief Investment Officer.

  • 2020

    Named a leading investment manager in the RIAA benchmark report and Mercer received an A+ for strategy & governance and an A for all asset classes in the global PRI assessment . A new Sustainable Investment Manager was appointed, reporting to the CIO, to work together with an expanded advisory team and particularly expand our active ownership.

  • 2021

    Mercer was voted as the number one consulting firm for sustainable investment; Mercer Super is named as a Rainmaker “top ESG super fund” and a Responsible Investment Association of Australasia (RIAA) sustainable leader in the December super benchmark survey.

    Committed to be net zero absolute carbon emissions by 2050 in line with the Paris agreement, together with 2030 milestone reductions. First modern slavery disclosures on risk management activities published.

  • 2022

    Portfolio implementation, metrics monitoring and reporting all continue to evolve.

  • Industry Participation

    In addition to steps we’ve taken internally to foster sustainable investing, we also participate in, or support the following industry initiatives, often in regular working groups, globally and locally:

    Principles for Responsible Investment (PRI)

    Responsible Investment Association of Australasia (RIAA)

    Investor Group on Climate Change (IGCC)

    Climate Action 100+ (CA100+)

    Carbon Disclosure Project (CDP)

    Task Force on Climate-related Financial Disclosures (TCFD)

    Transition Pathway Initiative (TPI)

    30% Club (Australian Investor Chapter)

    Investors Against Slavery and Trafficking (IAST)

    The Global Impact Investing Initiative (GIIN)

Proxy voting

Visit the Proxy Voting Search website where you will be able to search for particular proxy votes for the latest financial year. For further information on proxy voting please contact us.