The UNPRI report assists asset owners, who are signatories to the UNPRI principles, to compare their responsible investment performance across a range of asset classes, yearon-year, and against other asset owners on a local and global level.

Commenting on the results, Chief Executive Officer, Phil Stockwell, said, “The UNPRI assessment report is an important measure of how well we are implementing our responsible investment strategy across the portfolio. The A+ score for strategy and governance reflects our commitment and the quality of the work we do managing long-term environmental, social and governance risks for the benefit of our members and the community.”

As part of the assessment, LGS completes an annual survey on its responsible investment activities across a defined set of asset-specific modules within the UNPRI Reporting Framework. These responses are assessed, and results are compiled into an assessment report. A performance band (from A+ down to E) is then assigned to each module by aggregating all the indicator scores.

Head of Responsible Investment at LGS, Moya Yip, said, “These are exceptionally pleasing results for LGS. Our A+ scores for the active ownership of shares and property, in particular, are a direct result of working closely with companies, as well as developing our direct property portfolio, over many years to be more sustainable by continually improving environmental, social and governance practices.”

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The appointments also strengthen the Board’s skills in targeted areas and increase the diversity of experience as LGS positions itself for future growth and to enhance member value. The newly appointed Chair will provide strategic direction to help the Fund to better serve the current and future needs of our members. LGS has historically delivered long-term value, consistent financial outcomes for members, while doing so, is mindful of implementing sustainability considerations in all its investment decisions.  

The outgoing Chair, Bruce Miller remains on the Board as a Deputy Chair.

Mr Miller, said: “The Board welcomes Kyle Loades as the first independent Chair. He brings a track record of leadership, member-focussed transformation and digital client service gained from Board experience with organisations such as the NRMA, Credit Union Australia, roles with community organisations and as a founder of an innovative business. His focus on member-based organisations and innovation will be an asset to the LGS Board as we work to deliver the best possible retirement outcomes for our members.

“Kyle will be joined by Sandi Orleow, LGS’ first female Independent Director. Sandi has extensive board experience in the local and global financial services sector, with a particular focus on superannuation, investment management and consulting. Her in-depth financial services expertise will make her a great asset to the Board. She is a strong advocate for innovation and growth strategies to allow these to be considered and successfully integrated in traditional businesses for the benefit of members.”

LGS incoming Chair, Kyle Loades, said: “LGS has an enviable investment track record, and is consistently recognised as a global leader for its long-term commitment to responsible and sustainable investing. I’m honoured to be appointed LGS’ first independent Chair, and to work with a Board and a leadership team who are committed to delivering great member outcomes.

“Achieving the best possible retirement outcomes for members will continue to be the focus of the current and future Board and leadership teams. At the same time, the Board sees opportunity to enhance member value in the future. In line with APRA’s expectations and support, this will be an active consideration for the Board and the leadership team.

“With a solid base of existing members and a singular focus on member benefit, LGS has an opportunity to grow as we enhance member value and continue to help members have a better retirement thanks to long-term sustainable returns. I look forward to leading the Board and working with the executive team to serve members well now and in future.”

LGS Acting Chief Executive Officer, Donna Heffernan said: “The leadership team is excited to have the benefit of Kyle and Sandi’s in-depth experience from other member-focused organisations. Kyle has worked closely with executive teams of prominent and well-respected member-based organisations to significantly enhance member value. Similarly, Sandi has held various director and investment committee roles at relevant member-based and investment-focused organisations such as CFA Societies Australia, Statewide Super as well as Women in Super that we expect will benefit our Board, investments, and our members.”

“We look forward to leveraging Kyle and Sandi’s board and executive experience and expertise for the benefit of our members.”

Kyle and Sandi commenced their roles on 22 October 2019.

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Bruce Miller

Local Government Super (LGS, the Fund) has announced that its total funds under management (FUM) has reached $12 billion. This milestone demonstrates Australia’s growing appetite for genuine long-term responsible investment and reflects LGS’ ongoing commitment to achieving long-term sustainable returns for our members.

LGS’ acting Chief Executive Officer, Donna Heffernan, said: “We are extremely proud of the Fund’s strong growth and consistent performance over recent years. Looking back, LGS doubled its total FUM in just over seven years to reach $10 billion in April 2017, we then grew to $11 billion in March 2018 and now in June 2019 we have reached $12 billion.”

“This achievement is a testament to our long-standing commitment to responsible investments here in Australia and internationally. The core of our strategy is to align our investment philosophy with the needs and aspirations of our members. Our aim is to provide our members with the high levels of service and the value for money they need to achieve their retirement goals.”

LGS Chair, Bruce Miller, said: “LGS’ consistent and positive financial performance demonstrates why our responsible investment philosophy makes real commercial sense. We actively engage and educate our members about our approach and we strongly believe all super funds have a responsibility to invest and operate in a responsible and sustainable manner.

“LGS is committed to enhancing the retirement income of our members through the benefits of long-term sustainable returns.”

LGS recently achieved Australia’s first carbon neutral property portfolio certification by the Australian Government for all NABERS rated buildings in its property portfolio, and has achieved a 5-Star GRESB rating for its direct property portfolio.

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LGS is one of Australia’s most responsible super funds and it is currently in the process of a comprehensive organisational redesign to position the fund for strong growth based on long-term sustainable investment returns, high quality service, competitive costs and strong governance.

LGS’ CEO, David Smith said: “It’s an exciting time for LGS and I’m delighted to welcome Daniel and Brett to the executive team as we embark on the next phase of our development; implementing our long-term growth strategy while continuing to deliver the best possible outcomes for our members.”

In his role as Chief of People and Transformation, Mr. Musson will be responsible for the transformation and the change management strategies as LGS aims to build a stronger, more dynamic organisational culture.

“Daniel has an extensive background in financial services having worked with Westpac, Bank of Queensland and BT Financial Services. He also gained great leadership experience as the CEO of the Australian Institute of Management.” Mr Smith said.

As Chief Experience Officer, Mr. Dolling will be responsible for enhancing the member experience; leading the different teams across the organisation that directly serve LGS members including financial planning, client relationships and the in-house member contact centre.

Speaking of Mr. Dolling’s appointment, David Smith said: “For the past seven years, Brett has been the General Manager of Client Engagement with MTAA Super. Brett comes to LGS with fantastic industry super experience and a track record of building up an industry fund through challenging but opportunistic times.”

Mr. Musson started in the newly created role on 19 November 2018 and Mr. Dolling will commence his role on 17 December 2018.

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GRESB is an industry backed organisation committed to assessing the environmental, social and governance (ESG) performance of real assets, including real estate portfolios and infrastructure assets globally. This year 903 property companies, REITs, funds, and developers participated in the GRESB assessment.

LGS’ Head of Property, Scott Armstrong, said: “LGS is proud to be awarded a 5-star GRESB rating, and our highest score to date. The score of 85/100 places us 2^nd in our peer group, which is a great achievement given our peers have more sizable and higher grade portfolios.”

“Our aim is to continually improve the environmental performance of our direct property assets. Over the past seven years, we’ve reduced our electricity consumption by 42% and our water consumption by 52%. We’re actively working with our tenants to further reduce energy consumption and remain at the forefront of sustainability management.”

LGS Chief Investment Officer, Craig Turnbull, said “this GRESB rating reflects our ongoing commitment to invest in a range of responsible assets on behalf of our members, so they can reap the benefits of long-term sustainable returns.”

The GRESB Assessment evaluates performance against seven ESG categories, including management practices, green building certifications, and stakeholder engagement programs. The Assessment also contains approximately 50 performance indicators, such as energy consumption, GHG emissions, water consumption and waste.

LGS has been widely recognised for its commitment to responsible investment and local and global initiatives:

• Named Australia’s Best Green Super Fund for the sixth time at the 2018 Money magazine ‘Best of the Best’ awards.
• Founding signatory and the sole Australian signatory to the Green Bond Pledge.
• Awarded a fixed-income ESG mandate to PIMCO for approximately AUD $440 million.
• No.1 ranking for the management of climate change in the global 2017 Asset Owners Disclosure Project.

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Bill Hartnett

Local Government Super (LGS) is a founding signatory to the Green Bond Pledge which launched last week.

The Green Bond Pledge is an international declaration that all bonds financing long-term infrastructure and capital projects need to address environmental impacts and climate risk. It reflects the goals of the Paris agreement, and asks cities, county and state governments, and corporations to account for climate risk when designing future infrastructure and capital projects and consider financing them with green bonds.

LGS’ Head of Responsible Investment, Bill Hartnett said: “We’re proud to be the sole Australian signatory to the Green Bond Pledge. The objectives of the Pledge perfectly align with our philosophy for responsible investing. The Pledge is based on the premise that public and private sector bonds financing long-term clean infrastructure need to incorporate mitigation, adaptation and resilience to climate impacts.”

“Local Government Super was the first Australian super fund to invest in green or climate bonds in 2012.  Since then our exposure to these assets, which provide bond like returns and are also specifically financing environmentally positive projects and assets, has grown to over $150m.  We have been very pleased with them – both for their investment returns and their sustainability impact – and by signing the Green Bond pledge we are encouraging further growth in the market,” Bill Hartnett said.

Other founding signatories include: US State Treasurers of California, New Mexico and Rhode Island; the Cities of Asheville and San Francisco – California; King County – Washington; and financial firms, Global New Energy Finance and R3 Returns.

Climate Bonds Initiatives CEO, Sean Kidney said: “The foundation signatories are to be congratulated. By signing the Pledge, they are opening another path for much needed linkage between sub-nationals and corporate climate goals and their financial balance sheets and investment plans.”

LGS recently announced it had awarded a fixed-income ESG mandate to investment manager, PIMCO. Under the mandate, PIMCO will manage approximately AUD $440million across global credit and government bonds, integrating environmental, social, and governance considerations in its investment practices.

LGS has been widely recognised for its commitment to responsible investment:

• Number one ranking globally for the management of climate change in the 2017 global Asset Owners Disclosure Project
• Named Australia’s Best Green Super Fund for the sixth time at the 2018 Money magazine ‘Best of the Best’ awards
• 5-Star Green Star rating for the performance of the LGS direct property portfolio

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Adrian Stewart

Local Government Super (LGS) has announced that it has awarded a new fixed-income ESG mandate to investment manager, PIMCO. Under the mandate, PIMCO will manage approximately AUD$440 million across global credit and government bonds.

LGS Chief Investment Officer, Craig Turnbull, said: “We are pleased to continue our long standing relationship with PIMCO. PIMCO’s investment strategy perfectly complements our commitment to earning long-term sustainable returns for our members while actively managing the environmental, social and governance risks across our investment portfolio.”

In line with LGS’ responsible investment philosophy, PIMCO fully integrates environmental, social, and governance considerations in its investment practices; restricts investments in issuers who do not engage in acceptable practices; invests exclusively in highly-rated ESG stocks; and actively engages with issuers to improve ESG-related business practices.

Adrian Stewart, Head of PIMCO Australia, said: “We are excited to bring what we believe is an engagement-driven, industry-leading ESG fixed income solution to the Australian marketplace with Local Government Super; a long-time client and investor.”

“Responsible investing has evolved and investors have set their sights higher. It’s no longer enough just to screen out undesirable categories; investors want to foster positive social change. Our ESG platform provides the tools to do that without compromising on returns.”
Mr Turnbull, said: “This is the first time LGS has awarded an ESG specific mandate for a global credit and government bond mandate in fixed income and while we are not the first to make such an investment, it is a relatively new concept for both the Australian and global market.”

“LGS recognises that the long-term prosperity of the economy and the wellbeing of members depends on a healthy environment, social cohesion and good governance of LGS and the companies in which it invests.”

LGS has been widely recognised for its commitment to responsible investment:

• Number one ranking globally for the management of climate change in the 2017 global Asset Owners Disclosure Project
• Named Australia’s Best Green Super Fund for the sixth time at the 2018 Money magazine ‘Best of the Best’ awards
• 5-Star Green Star rating for the performance of the LGS direct property portfolio.

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Peter Lambert

Local Government Super (LGS) has bolstered its commitment to responsible investment practices by making three significant changes to the investment restriction criteria within its Sustainable Australian Shares investment option (SAS).

The latest changes to the SAS investment restriction criteria include:

1. A broadening of existing screens to exclude investment in companies which provide ‘significant services’ to prohibited industries (armaments, weapons, tobacco, mining and gambling).
2. A new screen to exclude companies exposed to fossil fuels (this means no investments in any fossil fuel industries).
3. An additional screen that excludes financial services companies based on their corporate conduct.

Peter Lambert, LGS Chief Executive Officer, said “these changes were made to distinguish our SAS as the ‘deeper green’, more responsible and sustainable investment option for existing and potential LGS members. However, these changes do not apply to our existing blended investment options.

“The SAS only invests in Australian companies listed on the Australian Stock Exchange (ASX). The changes to the SAS investment restrictions reflect the concerns that many of our members and our stakeholders have about some ASX-listed companies and particular sectors of the economy.

“These environmental, social and governance (ESG) issues can also pose significant investment risks and these changes to the investment restrictions are designed to ensure we are safeguarding our members’ retirement savings.”

The new screen which effectively excludes any investments in fossil fuel industries reflects increasing global concern about the impact of fossil fuels on climate and the environment.

Mr Lambert said “fossil fuels have emerged as an important factor for ethically-minded investors and the new screen complements our existing ‘high carbon’ screen and reinforces our belief that climate change remains one of the most significant long-term investment risks.

“There is also growing public concern about some corporate marketing and sales practices in the Australian financial services sector. The new innovative SAS screen uses external research to benchmark the sector on corporate conduct and then restricts investment in those companies with the highest number of serious repeated infringements. As a result, some financial services companies have been excluded from the SAS portfolio.

“The risks for investors as a result of poor conduct in the financial services sector include the potential of legal action, harsh penalties and increased regulation as well as the erosion of community trust and social license in the financial services sector.

“Some of the behavioural factors causing this poor corporate conduct, such as overt focus on short-term profits and excessive levels of bonus-based remuneration, may result in the re-emergence of long-term systemic risks to the financial sector and this is not in the interests of long-term shareholders such as LGS and our members.”

LGS’ ‘negative screening’ approach has been applied across the entire fund and has been regularly reviewed since its inception in 2000. The approach is designed to actively screen out investment in tobacco, gambling, armaments, old growth forests, high carbon sensitive sectors (such as coal mining, coal-fired utilities and oil tar sands) as well as excluding companies with poor management of ESG risks.

All companies that are excluded from the LGS investment portfolio due to the negative screens are subject to ongoing review.

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Peter Lambert

Local Government Super (LGS) has announced it has been certified as a responsible super fund by the Responsible Investment Association Australasia (RIAA), the peak industry body representing responsible and ethical investors across Australia and New Zealand.

The RIAA Certification Program aims to increase the uptake of responsible investment by guiding consumers towards more responsible and ethical investment choices. RIAA certification promotes consistent and standardised disclosure, ensures the highest standards of responsible investment are met and verifies this through stringent criteria and assessment.

LGS Chief Executive Officer, Peter Lambert, said LGS was pleased to receive this certification as further independent recognition of the super fund’s leadership in sustainable and responsible investing.

“LGS is one of the first super funds to be certified by RIAA’s new program. We will receive the RIAA responsible investor trade mark for our whole super fund, which endorses our long-standing commitment to superior environmental, social and governance (ESG) performance and ethical investment management and advice.

“Our commitment to responsible investment, combined with our competitive products, personalised service and non-commission based financial advice makes us a great superannuation option for everyone.

“The RIAA certification enables consumers to differentiate responsible investment products and services from other, more conventional investment options, making it easier for them to make an informed choice.”

LGS will also receive RIAA support in promoting responsible investment to the investment community and more widely to existing and prospective members.

Mr Lambert went on to say that “LGS was the first not-for-profit super fund to restrict companies with a material exposure to high carbon activities in its investment portfolio, and since then the need for genuine sustainable and responsible investing has become increasingly recognised in Australia and internationally.”

RIAA has over 165 members who manage more than $1 trillion in assets under management globally. For more information on the RIAA certification program, click here.

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Peter Lambert

Local Government Super (LGS) yesterday announced it has won the SuperRatings Infinity award for the fourth time – taking out the prestigious award in recognition of its leadership in sustainable and responsible investment.

LGS Chief Executive Officer, Peter Lambert, said: “Winning the SuperRatings Infinity Award is great acknowledgement for the work we do to safeguard our members’ savings and achieve the long-term sustainable returns essential for our members’ retirement.

“We now have more than $5 billion of our members’ savings in sustainable and responsible investment strategies, including shares, private equity and direct property assets, and this commitment is the largest of any super fund in Australia.”

This year, SuperRatings assessed super funds on a wide range of criteria such as management of climate change risk, member engagement and the types of investment options available to members.

“Our Sustainable Australian Shares option is an alternative for members who have a strong commitment to sustainability and it has performed strongly this financial year to May with a 20.97% return on our members’ retirement savings,” Mr Lambert said.

“Winning the Infinity Award again just provides us with more motivation to further improve the way we manage our environmental, social and governance risks right across our investment portfolio.”

LGS is the only superannuation fund that has won the Infinity Award four times since SuperRatings introduced the award in 2008, previously taking the top spot in 2014, 2012 and 2011.

This latest award follows on from LGS’ number one global ranking for the management of climate change in the Asset Owner’s Disclosure Project (AODP) earlier this year.

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