sustainable growth

Any company that:

• derives any revenue from the mining or exploration of thermal coal or the extraction, production, refining of conventional and unconventional oil and gas, or; has any total volume proved and probable reserves of thermal coal and metallurgical coal; or has any total volume of proved reserves of oil and gas⁵;

• derives 15% or more revenue from the generation of electricity from fossil fuels or transportation, distribution or retailing of conventional and unconventional oil and gas; or^#

• derives 15% or more revenue from equipment and services for the exploration and production of conventional and unconventional oil and gas; or^#

• derives 50% or more revenue from indirect services to the fossil fuel sector. For example, the provision of specific materials, contracted services and transportation^#.

^#Transitioning companies - companies that are indirectly involved in the fossil fuel sector may be permitted for investment where they can demonstrate a clear climate change transition path aligned to the Paris Agreement (through 10% or more revenue derived from renewable energy generation and either a Science-Based Target or Transition Pathway Initiative score of 2°C and below). The option currently holds a very limited number of companies within the private equity asset class that generate >50% of their revenue from the provision of services to the oil and gas sector. Due to the illiquid nature of these investments, these will be retained within the option until July 2024, by which date they will be exited.

⁵The external data provider does not differentiate between conventional and unconventional oil and gas reserves.

Any company that:

• produces or manufactures tobacco and tobacco related products; or
• derives more than 15% or more revenue from the manufacture or supply of key products necessary for the production or manufacture of tobacco products, or the wholesale or retail of tobacco or tobacco products.

Any company that owns or operates active uranium mines.

Any company that manufactures whole weapon systems or components developed for exclusive use in cluster munitions, anti-personnel mines, biological or chemical weapons.

Any company that manufactures whole weapon systems or components developed for exclusive use in nuclear weapons.

Any company that derives 5% or more revenue from military weapons production, civilian firearm production or retailing.

Any company that provides the services of asylum seeker detention centres or for-profit prisons, e.g correctional facilities.

Any listed company identified by our data provider as having a "red flag" related to human rights or labour rights breaches. Breaches may relate to:

Human rights 

• Support for controversial regimes
• Freedom of expression and censorship
• Other human rights abuses and adverse impact on a community.

Labour rights

• Labour management
• Employee health and safety
• Collective bargaining and unions
• Discrimination and workforce diversity 
• Supply chain employee relations standards.

^For incident-based exclusions e.g. human, labour rights and environmental breaches, HESTA may exercise discretion to not exclude a company or to re-invest in a company following a period of exclusion if a company can demonstrate through engagement that it has addressed the cause of the previous incident/s and the associated risk has been mitigated.

Any listed company identified by our data provider as having a 'red flag' related to environmental breaches. Breaches may relate to:

• Land use and biodiversity
• Toxic spills and releases
• Energy and climate change
• Water management
• Operational non-hazardous waste
• Environmental impact of products and services
• Supply chain environmental impacts.

^For incident-based exclusions e.g. human, labour rights and environmental breaches, HESTA may exercise discretion to not exclude a company or to re-invest in a company following a period of exclusion if a company can demonstrate through engagement that it has addressed the cause of the previous incident/s and the associated risk has been mitigated.

Any listed company that scores a ‘CCC’ ESG rating. Companies are ranked from best (AAA) to worst (CCC).

Ratings are determined by how well a company manages material environmental, social and governance (ESG) risks compared with sector peers. 

Any listed company that receives a corporate behaviour score of less than 1 in addition to any severe or very severe business ethics controversies. The Corporate Behaviour Theme Score evaluates the extent to which companies face ethics issues such as fraud, executive misconduct, corruption scandals, money laundering, anti-trust violations, or tax-related controversies. 

Any company that derives 10% or more revenue from the production and/or distribution of palm oil and has less than 50% Roundtable of Sustainable Palm Oil (RSPO) certified oil.

The RSPO certification requires companies to adhere to a strict set of principles and criteria for sustainable palm oil production.

Any company that derives 5% or more revenue from the operation, licensing, and provision of key products or services fundamental to gambling operations.

Any company that derives 10% or more revenue from the export of animals for the purpose of selling live animals for slaughter, husbandry and breeding subjects, including specialised transportation services.

Any country that scores a ‘CCC’ ESG rating. Our data provider scores and ranks countries from AAA (best) to CCC (worst). Ratings are determined by how well a country manages underlying factors across environmental, social and governance (ESG) issues. This exclusion also captures sub-national local authorities (such as states and provinces) who are exposed to similar ESG risks as countries. 

Find out more about our exclusions in Investment choices (pdf).