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Investment update from Brightlight: November 2020

Profile of Tim Macready, Chief Investment Officer, Brightlight
Written by Tim Macready, Chief Investment Officer, BrightlightPosted on 30/10/2020

As we approach the end of what has been a very unusual 2020, it provides an opportunity to reflect on the changes that have been made across the investment portfolio.

Since this time last year, we have focused on increasing the alignment of the investment portfolio with ACF’s values and preparing the portfolio to include targeted impact investments.

Firstly, this has involved focussing on improving the sustainability credentials of the portfolio’s listed equities, which make up roughly 55% of total assets.  The equities part of the portfolio has been more closely aligned to values, by shifting to products that have lower ethical and ESG (environmental, social and governance) risk, and then by beginning to include a range of listed equities portfolios with specific positive ESG attributes.

One of the ways that we measure progress is the percentage of assets that are invested by managers with a focus on benefiting stakeholders and incorporating active engagement strategies into their approach.  In the last year, we have increased the percentage of the portfolio using these higher-sustainability focused approaches from 10% to 26%, while reducing the percentage of the portfolio using only basic screening strategies with low sustainability and engagement focus from 33% to 12%.

Some of the products we have introduced in the last twelve months include:

  • Melior’s Australian Impact Fund, which invests in listed Australian and New Zealand companies whose businesses are aligned with the Sustainable Development Goals, while simultaneously engaging heavily with those companies to further improve sustainability.
  • Betashares’ Global Sustainability Leaders ETF, which invests in global companies who have been identified as climate leaders.

We’ve also taken the opportunity to increase our level of shareholder engagement and have been speaking to our investment managers about a range of issues, including the protection of First Nations heritage, climate change and workplace sexual harassment. ACF also continues to support, through our granting activities, the work of the Australian Centre for Corporate Responsibility.

ACF’s decision to align its portfolio with its values has also created numerous opportunities to share the ACF story.  With audiences as diverse as the Asian Venture Philanthropy Network, the Australian Institute of Superannuation Trustees, and Australian Community Philanthropy, ACF representatives have been able to share the story of the journey that we are on towards a values-aligned portfolio that delivers meaningful impact, in ways that we hope inspire many others to take a similar journey.

With the reorientation of the listed equities portfolios nearing completion, we are turning our attention to opportunities to allocate capital for direct impact. The Investment Committee has approved investment into one healthcare fund, and over coming quarters will be considering a range of opportunities to allocate capital for tangible impact.  We look forward to keeping you updated on these impacts as the portfolio continues to develop.