The University has a large Long-term Investment Portfolio (LTIP) of approximately $1.4 billion. Last year, our investment portfolio returned 11.4 per cent net of fees and taxes.
We recognise our fiduciary responsibility to maximise returns subject to appropriate consideration of any social harm or benefit arising from doing so.
Our LTIP has reduced its overall emissions intensity by 42.25 per cent below the benchmark outlined in the Socially Responsible Investment (SRI) policy, which ANU adopted in July 2013. This result has been achieved despite the benchmark declining by more than 10 per cent during the year.
LTIP had $206million (14.94 per cent) invested in companies considered leaders in gender equality. No Environmental, Social and Governance (ESG) targets have been set around gender equality. These investments are in line with the SRI policy’s aim to positively promote investment in securities that support socially beneficial outcomes.
Almost all of the LTIP (99.59 per cent) was compliant with the SRI objectives in 2021. The remaining 0.41 per cent were private equity investments made prior to the SRI Policy. As these investments are sold off and cash is returned to us, the portion of the LTIP that does not conform with the policy will diminish over time.
We are committed to holding a domestic equity portfolio with 25 per cent less carbon intensity than the S&P ASX200. We have agreed to a new target in 2022 that is to hold an international equity portfolio with 75 per cent less carbon intensity than the MSCI All Country World ex Australia Index. Our definition of ‘carbon intensity’ captures production and use of carbon at multiple stages within the economy. It goes well beyond the production and distribution of fossil fuels.
Income from the LTIP is essential for maintaining our core activities. Those include our superannuation obligations and endowment investments, including student scholarships, which we can only spend on the cause of the endowment and Commonwealth Superannuation defined benefits obligations. It is not money we can use for general operational costs.
For future investment mandates, the SRI Policy will continue to be considered and implemented whenever possible. For existing asset managers, reporting on SRI is becoming more formal and robust.
We seek to balance a strong commitment to socially responsible investment with a fiduciary responsibility to meet its obligations in respect of both superannuation liabilities and endowments. We are committed to improving the implementation of our SRI policy, and measuring the impact of the implementation. We strive to remain a leader nationally and internationally in working pro-actively as an active asset-owner, creating a greenhouse gas neutral future as well as promoting strong social and governance practices.
Read the ANU Socially Responsible Investment (SRI) Report 2021