Our Environmental, Social and Governance Policy

ESG refers to three important criteria that we use to decide where to invest your super funds: environmental, social and governance criteria. Having this framework not only helps us to choose good ethical investments, it's also been shown that these criteria can predict good long-term performance for the funds we manage.

The three criteria

E

Environmental

Environmental criteria look at how organisations effect the natural environment – for example, whether an organisation’s activities are polluting, mining or protecting.

S

Social

Social criteria examine how an organisation manages relationships with its employees, suppliers, customers and the communities where it operates.

G

Governance

Governance deals with an organisation’s leadership, executive pay, audits and internal controls and shareholder rights. Basically, how the organisation is run and what values it operates by.

Good ESG makes for good investment performance

ESG factors don’t only help organisations like Vision Super invest responsibly for the environment and community. There is growing evidence that ESG factors, when integrated into investment analysis and portfolios, can offer potential long-term performance advantages too. Which means that your super performs better over the long term when it’s invested ethically.

Also, as an ethical not for profit industry super fund, we ensure the companies that we invest in are doing their best to minimise their impact on the environment and act ethically, so we exercise our shareholder vote. This gives us the opportunity to support businesses that are doing the right thing, and oppose actions such as the use of cheap labour in unsafe conditions or excessive pay for executives.

ESG and our investment beliefs

ESG considerations are included in our fund-wide investment beliefs, which guide the decisions we make about our investment portfolio on behalf of our members.

  1. We believe we have a responsibility to act on members’ environmental and ethical concerns.
  2. We encourage an orderly transition to a low carbon economy.
  3. We believe a price should be set on carbon.
  4. We actively engage with our partners, organisations and community groups to make it happen.

Vision Super has a thorough ESG Policy that we use as a guide in our decision making, and to monitor the impact we have on communities and the environment.

Our major ESG alliances

UN Principles of Responsible Investment

We were an early signatory to the UN-backed Principles of Responsible Investment (PRI)

Australian Council of Superannuation Investors

We are a full member of the Australian Council of Superannuation Investors (ACSI)

Responsible Investment Association Australasia (RIAA)

A member of the Responsible Investment Association Australasia.

SuperRatings Infinity Rating winner

One of the funds awarded SuperRatings’ Infinity Rating for environmental and social responsibilities.

Glass Lewis

Is one of our independent proxy voting research providers, who assists in voting proxies internationally.

Recognition of our responsible investing ratings

Vision Super’s approach to active ownership and stewardship activities are actioned through our proxy voting, collaborative initiatives, company engagement and through policy advocacy work through our proxy research advisors and on occasions directly when required.

ESG considerations are included in our fund-wide investment beliefs, which guide the decisions we make about our investment portfolio on behalf of our members.

We believe that ESG considerations need to be integrated into investment oversight and decision-making, in order to fulfil our duties to act in the best interests of our members.

Frequently asked questions

Cash investment options are generally a combination of money in the bank and money invested for a short time in money market securities, such as bank term deposits and bank bills.

If you are risk averse or working to a short timeframe, then a Cash option that typically provides stable, low risk returns may be suitable for you. This type of investment option will protect the value of your superannuation, but the returns will often be low compared with other investment options.

The risk associated with cash investments is generally minimal, although the returns are also minimal. Cash can be a safe haven in times of economic uncertainty, and occasionally you may wish to preserve capital by allocating some of your super to cash.

We recommend that you obtain financial advice before making any decisions about investing in our Cash option.

To book an appointment with a Vision Super financial planner, either call us or complete our online appointment form:

Go to the form to book an appointment online >

Call our Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm).

Advice fees may apply, which will be discussed with you before any work is undertaken.

We don’t charge switching fees, so there is no impact on your super account balance from switching between investment options. However, if you have the right investment risk profile and your investments are matched up to your risk profile, you shouldn’t be needing to make switches regularly.

From time to time you should review your risk profile, maybe when you are first starting out in the workforce, are in the middle of your working life, a few years away from retirement and/or going into retirement. Otherwise the investments you have in superannuation should be a ‘set and forget’ strategy where you ride the ups and downs of the investments over a longer period.

You can switch investment options for some, or all, of your account balance, future contributions, or both. You can also nominate which investment option you would like your withdrawals to be made from.

You can switch between investment options by logging into our website, or the Vision Super app, or by sending us a completed Investment choice form. You can also call us, on 1300 300 820 (Monday to Friday 8:30am to 5pm).

Investment switches are processed based on the unit prices of the relevant investment options declared on the next business day after we receive your switching request, unless there is a delay with processing due to abnormal market conditions or system failure.

Frequent switching between investment options and trying to second-guess the market can be risky, particularly for high-risk investment options designed to be held in the long-term (6-12 years). You should switch only after a thorough review of your long-term investment strategy.

We recommend that you obtain financial advice before making any decisions about switching between investment options.

To book an appointment with a Vision Super financial planner, either call us or complete our online appointment form:

Go to the form to book an appointment online >

Call our Contact Centre on 1300 300 820 (Monday to Friday 8:30am to 5pm).

Advice fees may apply, which will be discussed with you before any work is undertaken.

Growth assets are higher risk but offer a higher potential return compared to defensive assets. They aim to grow the capital that’s invested and provide some income. Defensive assets are lower-risk investments which aim to protect the capital invested while providing an income.

The classification of assets into either growth or defensive has the advantage of simplicity, but it also has limitations when used as an indicator of risk. The classification does not capture diversification, which can have a larger impact on reducing the overall portfolio risk when assets are combined.

Another issue is that different people may have different classifications for the same asset type because there are no regulations governing this area and no clear guidance by the regulators on a standardised growth/defensive split. Classifications of growth or defensive assets may also change over time depending on market conditions and pricing.

We believe that there needs to be greater consistency and transparency in how super funds arrive at their growth/defensive mixes. But in the absence of regulations, there are going to be differences in practice and opinion. To avoid any potential misunderstandings, Vision Super does not publish the growth/defensive split of our investment options.

Compound interest is the interest that is earned on money that was previously earned as interest.

For example, if you have an investment of $100 that pays interest of 5% every year, then in the first year you will be paid interest of $5 over the year (5% of $100).

What happens in the next year? That’s where compounding comes in. You will not only earn interest on your initial $100 deposit, you will also earn interest on the $5 interest that you earned in the first year.

That means you will earn $5.25 in the second next year because your account balance is now $105, even though you didn’t make any deposits. This may not seem like much of an increase, but the effects of compounding becomes  more dramatic over long periods of time. After 30 years, your initial $100 investment would be worth $432.19, and that year you would be paid $21.61 in interest.

Each year your interest earnings will accelerate even more due to compound interest. This cycle leads to interest and account balances going up at an increasing rate, which is sometimes known as exponential growth.

Of course, if you’re borrowing money, compounding works against you. You owe interest on the money you have borrowed, and so your loan balance can then increase over time, even if you don’t borrow any more money.

Our primary objective is to maximise our members’ investment returns so that our members have more for their retirement. One of the means by which we try to achieve this objective is to instruct our underlying investment managers to incorporate Environmental, Social and Governance (ESG) considerations into their investment decision-making processes. We believe that this approach will help support long-term investment performance and enhance risk management.

We are a signatory and member of a range of organisations that promote responsible investing in the superannuation industry, including the Principles for Responsible Investment (PRI), the Australian Council of Superannuation Investors (ACSI) and the Responsible Investment Association Australasia (RIAA). We are also a signatory to the Global Investor Letter to governments on Climate Action, the Paris Pledge for Action (Paris Climate Change Agreement), the Workforce Disclosure Initiative (WDI) and a support investor of the Climate Action 100+ initiative.

The Vision Super ESG policy integrates sustainability and social responsibility into our everyday operations. We consider labour standards, environmental, social and ethical considerations, as well as key financial criteria, when selecting, retaining or realising investments of the Fund. This applies to all asset classes but tends to have more relevance to the listed equity asset classes.

We vote at meetings of our direct listed equity shareholdings according to our ESG Policy. Issues may be related to the election of directors, board structure, executive remuneration and incentive plans, and shareholder rights such as environmental and social considerations. When we have concerns about a company in relation to a proposal, we may choose not to support that proposal if it is not in the best interests of members or is contradictory to our investment beliefs and governance framework.

We have determined that we will not invest in companies that derive material revenue from the manufacture or production of controversial weapons such as land mines, cluster bombs or nuclear weapons. We will also not invest in companies that derive material revenue from the mining of thermal coal, tar sands or tobacco manufacturers. Vision Personal Investment guide 4

When searching for new (or reviewing existing) active investment managers, our due diligence includes an assessment of how environmental, social and governance risks are incorporated into the investment process. The investment managers are asked to specify the resources they have available to analyse ESG risks, including personnel and their expertise, and engagement with external research services.

We have low carbon benchmarks for our indexed listed equity investments, which represent about half our listed equities exposure.

The indexed component of our Australian equities portfolio is managed under a mandate that provides a tilt away from high carbon emitters.

The enhanced indexed component of our International equities portfolio is managed to the MSCI All Countries World ex Australia Index unhedged and calculated in Australian dollars. The portfolio is managed to materially reduce both carbon emission intensity and exposure to carbon reserves when compared to the benchmark.

In addition, our Australian small companies manager aims to reduce the portfolio carbon intensity relative to its standard model portfolio.

For our other active equity portfolios, our managers are required to consider ESG principles in their company evaluations. We ask our investment managers to include in each evaluation a reasonable estimate of the impact of phasing out fossil fuel usage, consistent with limiting global warming to no more than 1.5 degree centigrade above pre-industrial global mean temperature. This follows the Intergovernmental Panel on Climate Change assessment (IPCC) Report in October 2018, which revised the safe level of warming human civilisation can tolerate.

This shift to low carbon investment reinforces our commitment to sustainable investments, which has included over a decade of major investments in wind, solar and hydro power assets.

The Sustainable balanced option has a particular focus on environmental considerations, with 100% of the Australian and International equities portfolios managed to low carbon benchmarks.

For more information about our sustainable investment activities visit:

Our page detailing our approach to Sustainability >

Our page detailing how we engage in Active Ownership>

In our PDS we disclose “Investment fees and costs” and “Transaction costs” that include investment expenses relating to the investment management of Vision Super’s assets.

Investment fees and costs include investment expenses relating to the investment management of Vision Super’s assets, such as base and (in very few cases) performance-related fees paid to investment managers and advisers, management fees charged in investment vehicles, asset consulting fees, bank fees, custodian fees and internal Vision Super costs related to the management of the Fund’s assets.

Transaction costs include explicit transaction costs incurred by investment managers such as brokerage, settlement costs and stamp duty, as well as buy sell spreads charged by our investment managers or in underlying investment vehicles.

Investment and transaction fees and costs are not deducted directly from your account. Investment and transaction fees and costs are indirect fees that are deducted from the investment option unit prices and are therefore reflected in the returns allocated to your account through changes in the unit prices.

Find out the current investment fees for each option here >