Ausbil fund excludes fossil fuels


Måns Carlsson-Sweeny

The Ausbil Active Sustainable Equity Fund has celebrated  a successful three-years since inception by formally excluding fossil fuels.

Previously, the fund had excluded material investments in controversial activities such as uranium, thermal coal, gambling, alcohol, tobacco, weapons and armaments, and pornography.

This exclusion  list has been expanded to include investing in exploration, mining and/or the distribution of fossil fuels, including oil, gas, oil sands and all coal.

“The energy transition is well underway and smart capital is investing in the future of energy that  is cleaner, renewable and contributes to the sustainability goals around climate change,” said Nicholas Condoleon, Portfolio Manager for the Ausbil Active Sustainable Equity Fund and Head  of Equities Research. “A Biden Presidency is also expected to accelerate policy initiatives supportive of the substitution of fossil fuels by renewable fuel sources making this a very exciting time to be in sustainable investing.”

Ausbil’s ESG and sustainable investing model is based in deep fundamental ESG research, engagement and advocacy across the universe of investable companies on the ASX. Its dedicated ESG research team powers a program of face-to-face engagement with the boards and leaders of Australia’s listed companies.

“We have developed an ‘engine’ for ESG action that underpins our sustainable investment approach, and sees a rolling program of some 200 active engagements every year across all aspects of ESG,” said Måns Carlsson, Ausbil’s Head of ESG Research.  “This deep pool of data informs a larger spectrum risk assessment within Ausbil’s investment decision framework, improving risk-adjusted returns by considering the greater risk and ESG impact of every company.”

“Increasingly, we are seeing investors, from the world’s biggest institutions to mum and dad super investors, driving the move towards sustainable investing,” said Mark Knight, Ausbil’s Head of Distribution. “Whether it is climate change, modern slavery or governance, sustainable investors want their capital to be responsible. They don’t want their capital to overlook these issues.”

Themes like decarbonisation and global warming are driving a growing energy thematic that will eventually tip the scales toward alternative energy, most likely faster than previously thought.

COVID-19 has seen a drive towards renewables as a policy lever, and also as renewable energy costs fall in comparison to fossil fuels. “There is a long ramp-up of opportunity here in the long switch  to more renewable energy sources for long-term investors,” said Mr Condoleon.

“Active and consistent engagement, backed with active advocacy and voting means we walk  the walk of sustainable investing,” said Mr Carlsson. “Engaging means we will maintain an ongoing conversation with the companies in our universe, even when they have uninvestable ESG scores. This is how we achieve change.”

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