Environmental, Social and Governance (ESG)

VFMC seeks to wholly integrate ESG into all facets of our investment activities and our approach to investment stewardship encompasses the following key areas of work:

• Active ownership –
  • VFMC actively monitors and engages with investee companies and external fund managers across all asset classes. This active ownership enables VFMC to influence positive change in ESG practices across its portfolio and in real-world outcomes.

   VFMC’s active ownership activities focus on:

  • Proactively engaging with investee companies on a range of ESG related matters through the year; and
  • Exercising its voting rights at listed company AGMs. View VFMC’s Proxy Voting Record
• ESG integration – systematically integrating ESG factors into VFMC’s ‘whole of portfolio’ approach to investing across and within all asset classes.
• Major ESG projects – important ESG projects to support our investment stewardship activities, such as modern slavery and climate risk management.
• Collaboration and information sharing –  collaborating with other investors to influence change across the market at a systemic level, and sharing information with our clients, peers, and key industry groups to strengthen the industry as a whole.

VFMC primarily seeks to manage ESG risks through its active ownership investment approach and generally avoids exclusion. However, in certain circumstances, after comprehensive assessment of the economic, legal and fiduciary requirements, and risk and return issues associated with the investment, VFMC may decide to apply an investment exclusion. VFMC has exclusions in place for tobacco manufacturers, cluster munitions and thermal coal.

VFMC Investment Stewardship Policy

Proxy Voting Policy

To maintain our robust approach to ESG risk, VFMC regularly collaborates and shares knowledge with peer investors and other industry participants. We also work with investment managers, investee companies and other institutional investors through investor-led initiatives to integrate, capture and monitor the positive social, environmental and governance impacts of investments.

VFMC’s industry collaborations include:

• Being a signatory to the UN-supported Principles for Responsible Investment since June 2007.
• Membership of the Australian Council of Superannuation Investors, a research, company engagement, advocacy and voting recommendation provider. VFMC sits on the Member Council as well as various working groups to guide research and engagement agendas.
• Membership of the Investor Group on Climate Change (IGCC), a collaboration of Australian and New Zealand institutional investors focused on the impact of climate change on investments.
• Being a participant of ClimateAction 100+, an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
• Membership of the Global Real Estate Sustainability Benchmark (GRESB). GRESB conducts a benchmarking survey which assesses the sustainability performance of real estate and infrastructure portfolios (public, private and direct). VFMC uses the benchmark to engage and monitor the sustainability performance of our property and infrastructure fund managers.
• Being a supporting partner of Vision 40:40, which is an initiative to ensure diversity in executive leadership in ASX300 companies. As investors, we support 40:40 Vision in the quest “to achieve gender balance in executive leadership across ASX300 companies by 2030.”
• Being involved in the Investors Against Slavery and Trafficking Asia Pacific(IAST APAC) initiative. IAST was established in 2020 to engage with companies in the Asia-Pacific region to promote effective action in finding, fixing and preventing modern slavery in operations and supply chains.
• Being a collaborating investor on Advance, an UN PRI initiative aimed at advancing human rights and positive outcomes for people through investor stewardship.      

VFMC believes the impacts and effects of climate change are systemic in nature and pose widespread risks to human and societal wellbeing, ecological health and resilience, and to the wider economy.

VFMC supports the aim of both the COP26 and 2015 Paris Agreement to limit global warming to well below 2 degrees (moving toward 1.5 degrees) to minimise the worst impacts of climate change. In doing so, VFMC makes the following commitments:

• Achieve net zero portfolio greenhouse gas emissions by 2050.
• Undertake engagement with investee companies on their decarbonisation efforts and transition pathways.
• Support climate positive investments that not only provide strong financial returns, but also help drive the economy’s transition towards net-zero emissions.