LGS invests $90m into ESG fund
Local Government Super has awarded a $90 million mandate to Hermes Fund Managers to launch its Environmental, Social and Governance (ESG) strategy.
The fund invests into global equities and incorporates ESG factors including LGS Super's exclusion list. LGS does not invest into companies with high ESG risks or those that make profits from the sale of armaments, logging, nuclear energy, gambling and tobacco.
The exclusion list can be tailored for specific super clients, and does not invest into companies that are unwilling to work with shareholders to improve business practices, Hermes said.
LGS said it was a further step in the fund's aims to mitigate ESG exposure across its investments.
"This is another step towards LGS developing and implementing innovative strategies that manage or mitigate our ESG risk exposure across all asset classes, while capitalising on investment opportunities to achieve solid returns for our members.
"We appreciate Hermes' expertise and experience in the area of responsible investment, which will be fully utilised within the investment process of this new strategy," LGS said.
Hermes EOS conducts research into companies which breach internationally recognised ESG standards such as the UN Global Compact Principles.
Geir Lode, head of Hermes quantitative equities, said the strategy was a natural extension of the quantitative equity team's operations, which incorporated the work of Hermes EOS.
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