AMP Capital has furthered its commitment to ESG and responsible investing by introducing a new decision-making framework. In effect, this means we may exclude, in exceptional circumstances, companies or sectors on ethical grounds across our entire portfolio where AMP Capital is responsible for the investment management.
The new framework recognises and applies degrees of ‘harm’ or the ‘denial of humanity’ of another person as determining factors. It also takes into account whether there are international conventions that prohibit or control the use of a company’s products.
On reviewing all of the sectors in which we invest, AMP Capital concluded that manufacturers of tobacco, cluster munitions, landmines, biological and chemical weapons do not meet the required ethical standards and will be excluded from our investable universe.
AMP Capital will divest from approximately A$450 million worth of tobacco-related equity and fixed income holdings from our portfolios. We will also divest around A$130 million in funds invested indirectly in manufacturers of cluster munitions and landmines.
ESG and responsible investment
Environmental, Social and Corporate Governance (ESG) issues are as important to AMP Capital as they are to you. That is why we have established a dedicated team of ESG specialists. But they do not sit on the sideline calling out advice. They are embedded across the business, working with our investment teams. It is an invaluable discipline that helps identify risks and opportunities that otherwise might be hidden.
A decade of experience has shown these factors can directly impact on the performance of your clients’ portfolios. So, of course, we were amongst the first to sign on to the Principles for Responsible Investment in 2007. It is also why we don’t hold back when exercising voting rights in shareholder meetings. We believe understanding ESG factors leads to better decisions for everyone.