Betashares is committed to making a positive impact and influencing change at a corporate level by engaging with companies and proxy voting as well as the way we conduct our own business.
Betashares has a leadership position in ethical and responsible ETFs. In our ethical suite of products, we employ stringent screening criteria to ensure our funds align with the values of our investors. In our impact and sustainability-themed funds we enable investors to gain exposure to companies providing solutions to the world’s biggest challenges.
Investment principles
We recognise the important role that investment managers can play in promoting responsible investment practices. We are cognisant that large investors have a responsibility beyond managing the financial value of their own investment, and have an obligation to try to positively influence the way business is conducted, for the greater good.
We believe that by investing in our ethical ETFs, investors entrust us with the job of managing their capital in a way that aligns with their values. This means that our ETFs invest in companies (or exclude companies) in accordance with clear ethically focused rules and guidelines.
Where we can also make an impact is in ensuring we participate in proxy voting and engage with companies, for the long-term benefit of our investors.
Signatory to Principles for Responsible Investment (PRI)
Betashares is proud to be a signatory to the Principles for Responsible Investment (PRI), the world’s leading independent proponent of responsible investing. The PRI is supported by the United Nations and works to support the incorporation of ESG factors into investment decisions.
With an international network of signatories, the PRI encourages the use of responsible investment to enhance returns and better manage risks, leading to sustainable markets that contribute to a prosperous world overall.
Betashares became a signatory in April 2021.
Member of RIAA
Betashares is a member of the Responsible Investment Association Australasia (RIAA) and in 2022 was recognised as a Responsible Investment Leader.
With over 350 members including superannuation funds, fund managers, financial advisers and individuals, the RIAA is the largest and most active network of people and organisations engaged in responsible, ethical and impact investing across Australia and New Zealand.
Betashares is committed to the RIAA’s goal of ensuring capital is aligned to achieving a healthy society, environment and economy.
Trusted by investors
Our commitment to providing true-to-label ethical investment options has been recognised by investors, with Betashares leading the ESG ETF industry in Australia.
As at end of December 2022, our eight ethical and responsible ETFs have over $4.2 billion in assets under management (AUM), representing over 48% of industry ESG AUM.
Funds
Betashares’ range of ethical and responsible ETFs provides Australian investors with access to a diversified portfolio of sustainable, socially responsible companies or high-quality bonds that meet strict responsible investment standards, in a single, cost-effective ASX trade.
Proxy voting
We use the services of a proxy adviser, Institutional Shareholder Services (ISS), that provides us with governance research and voting recommendations.
We have adopted proxy voting guidelines, designed by ISS to have a strong focus on incorporating ESG considerations, compared to more mainstream benchmark voting policies.
The guidelines reflect the recognition that ESG factors can present material risks to portfolio investments. Our full proxy voting record is published on an annual basis and publicly available on our website.
Responsible Investment Committee
Betashares maintains a Responsible Investment Committee (RIC) for ETHI, FAIR and GBND.
The purpose of the RIC is to:
- provide Betashares with general input and advice in relation to responsible investment policies and investments
- provide expert assessment of whether the companies and issuers satisfy the negative and positive screens incorporated into the indices that these ETFs aim to track
- provide oversight of proxy voting and engagement activities for these ethical ETFs.
The policy of each fund is to vote on all resolutions in a way that is consistent with the values embodied in the index rules for the fund.
Engagement activities
Engagement refers to how we seek information from companies about their business practices, and how we communicate our views and expectations.
If an issue arises in relation to a portfolio holding where the RIC believes there is a potential conflict with the fund’s values, or where the RIC believes a company could improve its ESG performance, delegates from the RIC will engage with the company to try to understand the situation in more detail and, if necessary, advocate for improvement.
If an investee fails to engage, or fails to commit to improvement, the RIC will consider additional actions, with the final point of escalation being the removal of the holding from the relevant fund. The approach depends on factors including the company’s track record, how proactive it is in response to the issue, and how willing it is to engage with us.
Raising bar on transparency
We understand that one of the biggest concerns for investors in ESG funds is the issue of ‘greenwashing’ – the misrepresentation of the extent to which a fund is environmentally friendly, sustainable or ethical. Betashares’ focus is to ensure that our funds are completely transparent and rules-based in terms of security selection and the application of ESG factors.
On the relevant fund page, you can find the screening process and exposure limit guidelines for our ethical and responsible investment ETFs.
We disclose impact metrics and alignment to the UN Sustainable Development Goals compared to the benchmark for ETHI, ERTH and FAIR.
On annual rebalance of our ethical equity funds, we publish a detailed summary of the results of the rebalance, including the reasons for exclusions and inclusions directly linked to the index screening methodologies.
Awards and certifications
Betashares is an award-winning ETF provider:
1. ETHI, HETH, FAIR, ERTH, GBND and the Betashares Ethical Diversified ETFs have been certified by the Responsible Investment Association Australasia according to the strict operational and disclosure practices required under the Responsible Investment Certification Program. See www.responsiblereturns.com.au for details.1
2. Betashares ETHI ETF was awarded the Money magazine “Best International Share Exchange Traded Product” and “Best International ESG Fund Awards” for 2023 and 2021.**
3. Betashares has been named a Responsible Investment Leader, the highest possible standard for investors, by the Responsible Investment Association Australasia in both 2022 and 2023, recognising our commitment to responsible investing and attributes as an investment manager. Read more: https://responsibleinvestment.org/resources/benchmark-report/
* The Responsible Investment Certification Program does not constitute financial product advice. Neither the Certification Symbol nor RIAA recommends to any person that any financial product is a suitable investment or that returns are guaranteed. Appropriate professional advice should be sought prior to making an investment decision. RIAA does not hold an Australian Financial Services Licence.
** Awards are only one factor to be considered when deciding whether to invest in a product. You should make your own assessment of the suitability of this information.
