Investment Stewardship at TCorp

Our investment stewardship approach is underpinned by a belief that understanding and managing ESG issues is critical to achieving sustainable investment outcomes.

Investment stewardship addresses these issues impacting our investments as a key element of TCorp’s Total Portfolio Approach (TPA). Through best-in-class identification, evaluation, management and monitoring of material ESG risks, investment stewardship seeks to deliver optimal investment outcomes.

As a large and diversified investor, TCorp is exposed to a range of ESG risks across the total portfolio. These can have wide-reaching impacts on investment outcomes but are difficult to measure, price and predict, using traditional investment tools.

How do we bring our investment stewardship belief into our investment portfolios? We use 5 stewardship pillars.

Pillars of investment stewardship

TCorp’s approach to investment stewardship is informed by global best practice.

Integration

We identify, evaluate, manage, and monitor material ESG risks and opportunities such as climate change consistent with our total portfolio thinking, with a commitment to continuous improvement.

Active ownership

We are “active owners” of our investments through proxy voting and corporate engagement, in order to protect and enhance long-term investment outcomes.

Collaboration

We collaborate with like-minded investors and peers to encourage the development of industry standards around investor stewardship, to create a more sustainable and resilient financial system.

Exclusions

Exclusions are generally not the most effective means of managing long-term investment outcomes. Where we are instructed to do so by the NSW Government or its clients, we will exclude investments. Consistent with NSW Government policy, TCorp excludes tobacco manufacturers and Russian investments across all directly held assets.

Monitoring and disclosure

We monitor the implementation of our investment stewardship commitments and report regularly to management and the TCorp Board on our activities and outcomes. More information on TCorp’s investment stewardship activities is available in our Annual Report.

Climate change

Academic and industry evidence indicates that climate change is expected to have an impact on investment portfolios. TCorp recognises the importance of governance, strategy, risk management and disclosure in addressing climate related risk as reflected in the Task Force on Climate-related Financial Disclosures recommendations and the International Sustainability Standards Board. TCorp integrates climate risks and opportunities into its total portfolio thinking with the intention of protecting and enhancing long-term investment outcomes.

Below are some examples of activities we have undertaken to identify, evaluate and manage climate impacts on portfolios:

Understanding the climate change and carbon management strategies of some of the carbon intensive investments across the portfolio, and their potential to reduce emissions
Analysing and improving the resiliency of real assets given the anticipated physical impacts of climate change including acute and chronic risks
Considering the energy, water and waste efficiency of assets in the portfolio
Evaluating investments in solutions that support the transition to a low carbon economy
Assessing the impact on portfolios under various climate change scenarios.

Investment stewardship