ASB - Socially Responsible Investment Model

ASB Community Trust’s Move A Socially Responsible Investment Model

Australasia’s biggest philanthropic trust has adopted a socially responsible investment policy for its billion-dollar assets.

Auckland-based ASB Community Trust has become a signatory to the UN Global Compact, which supports universal environmental and social principles. It has partnered with the Centre for Australian Ethical Research (CAER) and Ethical Investment Research Services (EIRIS) who will monitor the behaviour of companies in the Trust’s investment portfolio.

“We want to demonstrate leadership in this important area of investment,” says Trust CEO Jennifer Gill. “It’s about advancing universal principals and responsible corporate citizenship to make the global economy more sustainable and inclusive.”

The UN Global Compact calls on companies to uphold 10 universal principles in the areas of human rights, labour, the environment and anti-corruption.

CAER’s role is to monitor how well companies measure up to the Global Compact. It will regularly report to the Trust on allegations and provide assessments as to whether the allegations have been addressed satisfactorily.

“This is a process of engagement,” Ms Gill says. “We are not about to divest ourselves of major investments overnight. Where there has been a breach of the UN guidelines we will be encouraging dialogue and discussion. As long as a company is talking about the issue and is seen to be making progress in remedying it, we will continue to hold them.”

Ms Gill says CAER was chosen as the Trust’s responsible investment partner because the two groups have a natural synergy.

ASB Community Trust is a major player in the not-for-profit sector, distributing grants of $55m a year to charitable groups in Auckland and Northland. This in itself is a good fit with CAER, which is an independent not-for-profit organisation.

CAER, based in Canberra, Australia, is part of a global alliance of business monitoring agencies. It acts as an agent for London-based Ethical Investment Research Services (EIRIS), which has over 20 years experience of responsible investment research in the US, UK, Europe and the Asia-Pacific region.

“Over 2800 companies are being researched using a thorough, transparent methodology and all companies with allegations are contacted for their response. This provides the Trust with concise reports on how companies are dealing with high profile issues and gives us context and background information.” Ms Gill says.

ASB Community Trust’s diversified investment portfolio was started in 1989 when 75% of ASB bank was sold to the Commonwealth Bank of Australia for $252 million. In 2000 the Trust sold its final 25% holding in the bank for $560 million.

That money, invested in New Zealand and internationally by the Trust’s 15 Government-appointed trustees, has since been grown to just over $1 billion. At the same time, almost $600 million worth of grants have been distributed from the annual profits.

The Trust is in good company with its move to responsible investment. Its sister trusts, Trust Waikato and Community Trust of Otago, use a responsible engagement overlay for their investments, while the $11.2 billion New Zealand Superannuation Fund also supports the UN Global Compact as its key benchmark for monitoring its portfolio.

ASB Community Trust does not expect its socially responsible investment policy to impact on its return (8.7% pa since 1994). Its range of investments will not change. What will change is the Trust’s broader objectives, which will now include helping to make the global economy more sustainable and inclusive.

“This is a perfect fit with the Trust’s vision for our own region - to contribute to the enhancement of equity and the enrichment of society in Auckland and Northland,” says Ms Gill. “This policy expands on the Trust’s investment objectives to encompass the UN Global Compact.”

ENDS

© Scoop Media