To better manage the impact to environment, social, and governance (ESG) factors, Local Government Super has signed an agreement with MSCI to gain access to ESG risk monitoring tools.
The MSCI ESG Research tools support the integration of ESG factors into the investment process and streamline the implementation of the United Nations ‘Principles of Responsible Investment’, MSCI stated.
As part of the suite, customised reports will measure and monitor ESG and carbon characteristics of Local Government Super’s managed portfolios. Specifically, MSCI ESG IVA and Impact Monitor will monitor LGS’ exposure to ESG risks and opportunities at the individual stock and manager levels.
ESG exposure is measured by sector and key ESG risks such as water, carbon, health and safety, and supply chain.
In addition, the Carbon Beta application will assess each of Local Government Super’s portfolios in comparison to relevant benchmarks, including carbon intensity, carbon risk, and exposure to strategic opportunities related to climate change.
Local Government Super chief executive Peter Lambert said that a responsible investment strategy can assist in "generating long-term risk-controlled investment returns", while also aligning the super fund with the environmental and social concerns of its members.
MSCI managing director and global head of index and ESG research Remy Briand added that the responsible investment offering filled a current market gap for institutional investors.
Local Government Super manages around $6 billion in retirement savings, including $3.3 billion invested in responsible investment strategies.
