We have an important role to play as responsible stewards of working people’s retirement savings.
We seek to act in their best interests by pursuing financial returns that aim to protect and grow the long term value of their investments, and contribute to the social, economic and environmental wellbeing of the communities in which they live.
Our responsible investment approach is closely aligned with the United Nations Global Compact and the United Nations-supported Principles for Responsible Investment, to which IFM has been a signatory since 2008.
Read more in the 2021 IFM Investors Responsible Business Report
Long-term strength and sustainability of the global economy is only possible if we have a healthy environment.
A strong and inclusive society will lead to greater participation in economic markets and provide greater investment growth opportunities.
Strong governance is critical to long-term sustainable economic growth. All participants have an obligation to behave honestly and ethically.
Our Responsible Investment Charter sets out the core beliefs, pillars and principles that define our responsible investment behaviours and mindset. Our ESG Policy further outlines the environmental, social and governance principles that our investment teams adhere to throughout the investment process.
Responsible investment is the approach that underpins our strategy for providing investors with competitive risk-adjusted returns over the long term. We integrate the consideration of ESG factors throughout our investment analysis, decision making and
stewardship activities. We focus on material factors that are relevant to our priority areas, which are climate change, workplace leadership and inclusion and diversity. Individual investment teams’ responsible investment approaches are tailored
to their specific strategies, reflecting materiality and the degree of influence we have as owners. All Investment teams work closely with the Responsible Investment team to align practices to our Responsible Investment Charter and ESG policy.
Learn more about our ESG integration and stewardship practices in our PRI Public Transparency Report and PRI Assessment Report.
Video: Greg Combet on the significance of ESG risks for institutional investors
We take an active long-term approach to managing the critical infrastructure assets we own and operate, with a focus on building resilient and sustainable businesses.
In the screening and due diligence (DD) phases we assess an opportunity’s intrinsic value across a number of dimensions, including ESG. We apply our DD framework to opportunities that are subject to a deeper analysis. This incorporates sector-specific analysis and a proprietary ESG checklist that we use to assess material risk and value-drivers at the company and portfolio level. To complement our analysis, we routinely engage independent specialist and technical consultants as part of the DD process.
As active members of portfolio company boards and management committees, we seek to build strong relationships with co-shareholders, company management teams and other stakeholders. Regardless of our ownership stake, we take a leadership position and work collaboratively to drive sustainable business practices through our active asset management approach.
Read about our interim targets and the roadmap to Net Zero by 2050 for infrastructure
Read and download our Infrastructure Carbon Footprint Reports
Read about the unlisted equity environmental and social considerations for our global infrastructure portfolio in accordance with the European Union’s Sustainable Finance Disclosure Regulation (SFDR)
Read about our Australian Infrastructure Emissions Reduction Initiative
Our consideration of ESG factors in our debt investments is concentrated in the screening and due diligence phases, prior to entering an investment. We also proactively engage with issuers post-investment as part of our ongoing investment monitoring and in response to emerging or potential material ESG risks.
In the due diligence phase, we integrate ESG factors into our credit assessment process. ESG integration practices vary across our debt investment portfolios due to the differing nature of the assets held and to meet specific client mandates. Our analysis incorporates ESG information from in-house research and a range of external parties, including credit ratings agencies and consultation and reports from environmental, legal and other technical specialists.
Where we identify material ESG risks, we engage with the borrower’s management to understand plans to mitigate or manage these risks. This approach maximises our investment universe within debt markets and aligns with our preference to engage with the company rather than apply an exclusionary approach.
We believe ESG factors can impact company performance and subsequently investment returns over the short, medium and long term. Each of our Listed Equities teams has its own approach to identifying and factoring material ESG considerations in the investment selection process.
Active Large Caps combines a systematic investment model with a qualitative fundamental overlay to target consistent returns with low drawdowns. The fundamental overlay draws upon external ratings, internal research and direct company meetings and engagement, in which ESG considerations form a significant part of the company due diligence process. We incorporate ESG considerations in stock selection, portfolio construction and in defining investable securities.
Active Small Caps adopts a bottom-up, fundamental approach to portfolio management, drawing upon ESG research, direct company engagement, broker reports and proxy advisers. Quantitative and qualitative ESG data is integrated into the analysis of industry sectors and individual companies to establish a proprietary ESG score, which, together with our broader competitive analysis, informs our investment decisions.
While we do not consider ESG factors at the portfolio construction stage for our enhanced passive index strategies, we continue to manage bespoke sustainability-themed equities strategies and products in partnership with individual investors.
Quantitative Equities works with clients to develop bespoke ESG Equities strategies to meet their specific requirements in terms of the type and measure of ESG and Carbon enhancements, as well as exclusionary criteria.
Our active stewardship approach applies to all our Australian listed equities strategies. We engage and exercise our voting rights to encourage responsible corporate behaviour and improved transparency on the management of material ESG risks and opportunities.
The Private Equity team’s approach to ESG integration extends beyond risk management to consider how we can have a greater positive impact during ownership through social and environmental initiatives that benefit employees, customers, communities and the environment.
In due diligence, we identify ESG-related risks and investment exposures. For opportunities that progress, we incorporate identified ESG risks and exposures in our ownership plan. All investment cases are required to articulate the company’s ‘noble purpose’ - its overarching mission - and our approach to supporting this purpose. A clear set of ‘Year 1’ ESG deliverables is required, and these actions are tracked during our ownership through bi-annual and annual assessments.
We have been a signatory to the UN supported Principles for Responsible Investment (PRI) since 2008 and our approach to responsible investment closely aligns to the United Nations Global Compact, which supports a set of core principles in the areas of
human rights, labour standards, environment and governance.
We are also active signatories or members of a number of organisations and initiatives promoting responsible investment and sustainable business principles globally. We believe these collaborations leverage the resources and influence of like-minded stakeholders
to help achieve the outcomes we seek in a more efficient and timely manner.
Read our 2020 PRI Transparency Report
Read our 2020 PRI Assessment Report
Robust responsible business governance and oversight are essential as we continuously strive to meet the expectations of our investors and the communities in which we invest and operate.
We aim to bring rigour and accountability to our responsible business practices through our governance structures, systems and policies.
IFM’s overarching responsible investment and sustainability strategy is established and monitored at the Board level. Management is responsible for the execution of this strategy, ensuring ESG risks are reflected in our risk management frameworks
and plans at the corporate and investment levels.
Responsible business governance – roles and responsibilities.
On 10 March 2021, the European Union’s Sustainable Finance Disclosure Regulations (SFDR) became effective.
The goal of this regulation is to create harmonised rules for financial market participants and financial advisers regarding the integration of sustainability risks in investment decision-making, and the consideration of adverse impacts
in investment decisions on sustainability factors.
At IFM, in seeking to act in the best interests of our investors, we pursue financial returns that aim to both protect and grow the long term value of their investments, and contribute to the social, economic and environmental wellbeing
of the communities in which they live. As a result of this investment ethos, and in accordance with EU’s SFDR, IFM is sharing the relevant environmental and social considerations with our European investors in relation to relevant
Please select the appropriate your current investor status noting that:
If you encounter any issues when trying access the EU SFDR disclosure information, please contact our Investor Relations by emailing [email protected].