Vision Super only excludes listed companies where we don’t believe engagement can reduce harm, or where we believe there is a long-term risk to our members’ money. Our company exclusions are to tobacco/vaping products and controversial weapons as determined by our ESG provider. These exclusions are outlined below. Our exposure to fossil fuels in our listed equities portfolio is managed through carbon intensity limits under our carbon budget framework. For further information please refer to our Carbon budget page.
Our listed equity asset classes are managed with exclusions of companies that generate more than 5% of revenue from critical components of nuclear weapons and any level of revenue from critical components of anti-personnel mines, cluster munitions or depleted uranium weaponry (based on data from our ESG service provider Institutional Shareholder Services (ISS)). Our listed equity company exclusions for controversial weapons are fund-wide and apply to listed equities across our options.
Controversial weapons are ones that can have a severe impact on civilians, and are generally banned under international treaties. Land mines, cluster bombs and nuclear weapons are deemed to be particularly controversial because of their indiscriminate impacts on civilians and the disproportionate harm they cause for many years after a conflict has ended.
Despite being widely considered to be controversial and often prohibited by international treaties, these weapons are still produced in some parts of the world.
Our listed equity asset classes are managed with exclusions of companies that produce tobacco or vaping products. Our approach is broadly consistent with the terms of the Tobacco Free Finance Pledge under the auspices of Tobacco Free Portfolios and the UNEP Finance Initiative to which we are a signatory. Our listed equity company exclusions for tobacco are across our investment mandates and apply to our listed equities across our investment options.
According to the World Health Organisation, tobacco use kills more than 8 million people every year globally. Tobacco can also be deadly for non-smokers. Second-hand smoke exposure has also been implicated in adverse health outcomes, causing 1.2 million deaths annually. And according to the International Labour Organisation, about 98 million children, or 60% of the children involved in child labour, are working in the agriculture sector, many of whom are believed to be involved in the production of tobacco. Tobacco also directly harms workers – people involved in the harvesting of tobacco leaves are prone to acute nicotine poisoning, as they absorb nicotine through their skin while handling tobacco plants. This is particularly serious for children, who because of their smaller size are more at risk.
The deadly nature of this product and the human rights abuses common in this industry lead us to believe that the future profitability of tobacco faces material legislative, regulatory, and litigation risks. Tobacco also causes immense human suffering. That is why we have signed up to the Tobacco-Free Finance Pledge. Taking the pledge has allowed Vision Super to become “verified tobacco free”.
For more information on the tobacco free pledge, visit the Tobacco-Free finance signatories website
Vision Super has an exclusions framework that the Board uses to ensure we make decisions about whether to exclude particular companies in a consistent way, and that doing so is in the long-term financial interests of our members.
As part of this framework, the Board will:
Define why the category of assets is being proposed for exclusion. This will take into account the values of the Fund.
Vision Super maintains a list of companies that we consider to be prohibited investments. The list is reviewed regularly by the Vision Super ESG Working Group and Investments team. Using the methodology and definitions of our ESG Provider ISS we have identified companies that are involved in controversial weapons production and the production of tobacco and vaping products. Where appropriate we supplement this with our internal research and company engagement. Discretion about whether or not to prohibit investment in companies or entities lies entirely with the Vision Super Board. The list is reviewed at least annually and where new companies are identified for exclusion we seek to divest our holdings within a reasonable timeframe.