we invest with purpose

responsible investment

Responsible investment is an approach to investing that incorporates the consideration of environmental, social and governance (ESG) risks and opportunities into investment decision making, to generate sustainable, long-term returns that create a positive impact.

Smarter investments. Strong long-term returns.

To deliver strong financial returns for our members’ financial futures, we must address financial and non-financial considerations and advocate for necessary changes to the financial system.

When HESTA makes investment decisions, we consider:

How we invest responsibly

The HESTA Responsible Investment Policy outlines our principles and commitments in relation to incorporating environmental, social and governance (ESG) strategies into our investment decisions.

Read the HESTA Responsible Investment Policy (pdf) to find out more about HESTA’s approach as we transition our portfolio.

Responsible investment integration in the investment process

We regard the United Nations Principles of Responsible Investment (PRI) as the key framework for integrating ESG considerations into our investment processes and decision-making and HESTA is a proud signatory to, and an active participant in, the PRI.

The PRI provides a common language that is understood globally by all participants in the investment industry — super funds, fund managers, asset consultants, governments, and non-governmental organisations (NGOs).
 

The 6 Principles for Responsible Investment

1. We will incorporate ESG factors into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG factors into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.

We complete the PRI Reporting and Assessment Framework each year. The outputs are available below.
 

HESTA PRI Responsible Investment Transparency Report

The HESTA PRI Responsible Investment Transparency Reports show our responses to all of the questions in the PRI Reporting Framework.

• HESTA PRI Responsible Investment Transparency Report (pdf)
  Note: this report was produced in 2020, and is based on the reporting period ending June 2019.

HESTA PRI Assessment Report

The HESTA PRI Assessment Reports show PRI's Assessment of how HESTA has progressed in the implementation of the Principles year-on-year and relative to peers across asset classes.

• HESTA PRI Full Assessment Report (pdf)
  Note: this report was produced in 2020, and is based on the reporting period ending June 2019.

active ownership

Active ownership (or stewardship) is the means by which investors most directly influence companies, markets, and economies, and in turn society and the environment, as a whole. 

We do this as part of our responsibility to protect and enhance long-term investment value for members by promoting sustainable value creation in the organisations we invest in. 

As a long-term investor that expects to own an asset for a number of years, we see active ownership as especially important in serving the interests of our members.

We're proud to be a signatory to the Australian Asset Owner Stewardship Code, which consists of six Principles. As a signatory, we've developed a Stewardship Statement (pdf) to explain how we apply each of the Principles. 

How does active ownership work?

There are 4 aspects to active ownership at HESTA. 

1. Engagement

This means entering into a dialogue with companies to help us better understand their business model and influence their performance and practices. It also includes the dialogue we have with our external investment managers to encourage progress in their ESG integration practices.

2. Voting

This means exercising our voting rights in both listed and unlisted markets as a key element of our stewardship activities, and an important link in the chain of accountability between a company and its shareholders (and an investment manager and its investors).

3. Advocacy

As a large super fund, we recognise our influential position in the market and our responsibility to use our voice responsibly to address systemic issues that are at odds with maintaining and building sustainable financial markets and generating long-term performance. This may involve seeking change, or developing laws, regulations, standards or guidelines to improve long-term performance of markets and reduce market failures.

Advocacy may also focus on raising awareness about ESG issues or practices that will help us achieve sustainable financial markets or better RI Practices.

Read more about how we advocate with influence.

4. Class actions

Class actions allow shareholders to claim for losses against a company, where the loss can be shown to be due to breaches of corporate laws or regulations.

HESTA supports class actions to recover losses and encourage better standards of corporate governance and accountability.

Our team collaborates with a range of organisations in the investment community