Local Government Super leads by example on responsible investment

Peter Lambert

Local Government Super (LGS) has launched a shareholder voting website making LGS the first super fund in Australia to disclose their voting intentions in advance of investee company shareholder meetings.

LGS Chief Executive Officer, Peter Lambert, said “the main objective of the new site is to increase transparency and disclosure of how we invest our members’ retirement savings”.

As LGS holds shares in the majority of the top listed companies in Australia and overseas, they are entitled to vote at the shareholder meetings of most of the ASX200 companies and 500 of the largest listed companies in the world.

The new website discloses company proposals for consideration by shareholders and LGS’s voting intentions in real time using CGI Glass Lewis’ Viewpoint voting platform. Where LGS votes against a proposal due to concerns that it may lead to a loss of shareholder value, they will also provide a reason for their voting decision.

Mr Lambert said “We engage with companies on a range of environmental, social and governance (ESG) issues to ensure we are addressing potential risks across our investment portfolio. Voting at shareholder meetings forms a key element of this engagement and is an important element of our ownership rights as long-term investors.

“An essential part of this process is sharing our voting decisions with our members and the general public. In doing this, we are raising awareness of where we invest our members’ savings and how their rights as ultimate beneficiaries of the shares are being honoured.”

As a rule LGS votes in accordance with Australian Council of Superannuation Investors (ACSI) and CGI Glass Lewis recommendations, but will vote against these recommendations if they believe there is a long-term ESG risk which may lead to the loss of shareholder value.

LGS has voted against company proposals in the past as a result of concerns with:

• board diversity and independence
• remuneration report recommendations
• sustainability reporting disclosure
• climate change

LGS also engages on ESG issues by filing shareholder proposals and board nominations. Recent examples include participating in the co-filing of BP and Shell climate disclosure shareholder resolutions and nominating a climate change expert to the board of BHP Billiton.

Peter Lambert said “By engaging in this way, our aim is to increase our investee companies’ awareness and understanding of current and future ESG issues, improve standards of governance and encourage greater disclosure.”