ESG and Sustainability Report 2021

ALPHINITY INVESTMENT MANAGEMENT  2
Contents
A message from the Alphinity founders
4
Responsible investment at a glance
6
Report highlights
7
ABOUT ALPHINITY
9
Who we are
9
Our team
10
Our funds
11
OUR APPROACH TO ESG INTEGRATION
12
Introduction
12
ESG integration process
13
FY21 enhancement: ESG materiality 
assessment tool
14
ACTIVE OWNERSHIP
16
Proxy voting
16
Company engagement
18
Collaborative engagements
23
KEY SUSTAINABILITY THEMES IN FY21
26
Climate change
28
Modern slavery and human rights
38
FY21 enhancement: Understanding modern 
slavery risks in our investments
41
ALPHINITY’S SUSTAINABLE STRATEGIES 
45
Reflections from an independent Sustainable 
Compliance Committee member
46
Using the UN Sustainable Development 
Goals to invest sustainably
48
Key components of our sustainable strategy
49
FY21 SDG alignment outcomes
53
Domestic and global sustainable 
company examples
59
APPENDIX
63
Appendix 1 | FY21 ESG-centred engagements
63
Appendix 2 | TCFD reference table
64
Appendix 3 | Sustainable Compliance 
Committee Independent Experts
65
Appendix 4 | SDG Data for Sustainable 
Strategies (FY21 Holdings)
66

3  ESG AND SUSTAINABILITY REPORT 2021
About this report
This is Alphinity’s first annual Environmental, 
Social and Governance (ESG) and Sustainability 
Report. This report highlights our ESG-related 
achievements for FY21, including key engagement 
outcomes, case studies from across all funds, 
Sustainable Development Goals (SDG) outcomes 
for our two dedicated sustainable strategies, and 
outlines our approach to managing key issues like 
climate change and modern slavery.
As this is our first report, we have also 
included a number of context or policy related 
sections (for example, our approach to ESG 
integration). These sections have been included 
for completeness and may not be included in 
future reports. 
We recognise there are always improvements 
to be made. If you have any feedback on this 
report please contact Jessica Cairns, Alphinity 
ESG and Sustainability Manager, directly 
at jessica.cairns@alphinity.com.au.

ALPHINITY INVESTMENT MANAGEMENT  4
A message from the Alphinity founders 
JOHAN CARLBERG 
Principal, Lead Portfolio 
Manager
ANDREW MARTIN 
Principal, Portfolio Manager
BRUCE SMITH 
Principal, Portfolio Manager
STEPHANE ANDRE
Principal, Portfolio Manager
We are proud to present Alphinity’s 
first ESG and Sustainability Report. 
This report is an accumulation of the 
effort we have made in responsible 
investing across all our Funds for 
more than a decade.
This report highlights our overall 
approach to ESG integration and 
active ownership, key engagement 
outcomes from the past year, our 
views on emerging and influential 
sustainability thematics like climate 
change and modern slavery, and 
outcomes from our two sustainability 
strategies. 
Enhancing our approach to 
ESG integration 
ESG considerations are an integral 
part of our investment process and 
have been an ongoing focus since 
Alphinity was established in 2010. 
ESG aspects are actively identified 
and considered by all members 
of the Alphinity investment team 
and remain an important part of 
our thinking for each company we 
invest in.
Over the course of our collective 
careers in the markets, going back 
to the 1980s, we have seen the 
ESG and responsible investment 
space change significantly. In its 
early days, ESG management was 
viewed as being ‘nice to have’ 
and was generally a separate step 
in the investment process. Now, 
integrating ESG is an important part 
of fundamental analysis and viewed 
as something we need to consider 
when making investment decisions. 
With the increased focus by the 
investment industry on companies’ 
social licence to operate, we too 
have evolved our approach to ESG-
focused engagement. With that 
in mind, in 2020 we established a 
dedicated team, welcoming Jessica 
Cairns as the ESG and Sustainability 
Manager and Moana Nottage as the 
ESG and Sustainability Analyst. The 
team has already made a significant 
impact by clarifying and tightening 
some of our internal processes, 
establishing an enhanced ESG risk 
management framework, replacing 
external research into sustainability 
and, of course, putting together this 
ESG and Sustainability Report.
Company engagement 
Although ESG engagement has 
always been a focus for the 
investment team, this year we 
increased our efforts to identify and 
complete specific engagements 
related to ESG issues and 
opportunities. 
We conducted 76 company 
meetings in which ESG was the 
primary focus. These engagements 
are increasingly being held with 
the sustainability specialists of the 
investee company so we can discuss 
specific topics in detail. 
We have also noticed a pleasing 
increase in the number of companies 
that are reaching out to us for our 
input into their own approach to 
ESG management and disclosure 
and to seek advice on improvements 
to the activities and disclosures they 
have in place.

5  ESG AND SUSTAINABILITY REPORT 2021
Collaboration 
Alphinity signed onto the United 
Nations-backed Principles for 
Responsible Investment (PRI) just 
after we started the company. 
Since then, PRI has become almost 
universal, not just in Australia but 
around the world, and its members 
are now cumulatively accountable 
for many trillions of dollars across all 
asset classes. 
We are also members of the Investor 
Group on Climate Change and have 
been involved with the CA100+ 
collaborative engagements with 
Incitec Pivot and Orica. 
This year we became signatories to 
two other investor initiatives: 
•	 The 40:40 Vision Initiative, which 
is focused on improving gender 
diversity in the ASX200 executive 
teams.
•	 The Investors Against Slavery and 
Trafficking (IAST) initiative, which 
aims to collaborate on topics and 
issues related to modern slavery 
and human rights.
Evolution of responsible 
investing 
Since Alphinity was established 
in 2010, we have witnessed an 
exponential increase in the number 
and types of responsible investment 
strategies in the market. Although 
we think that overall, this is a good 
thing as more capital moves towards 
ESG-focused strategies, it has also 
created confusion in the market 
around what a good responsible 
investment strategy should look like.
We started our first responsible 
investment fund, the Alphinity 
Sustainable Share Fund, when we 
formed the business. Back then, 
the industry was just beginning 
to appreciate the potential in ESG 
investing and, for a long time, 
the Fund was small and mainly 
of interest to ethical or specialist 
investors. 
When the United Nations ratified 
the Sustainable Development Goals 
(SDGs) in 2016, the global agenda 
around sustainability undertook vast 
change. Global regulation started to 
transform and, not surprisingly, the 
broader investor community started 
to pay more attention to associated 
ESG and sustainability themes such 
as equality and climate action.
The United Nations has called for the 
2020s to be a ‘decade of action’. It’s 
also a decade in which we expect 
governments around the world to 
start making significant changes to 
implement and achieve various net 
zero commitments. Expectations 
around ESG and sustainability are 
only going to become increasingly 
pertinent as the 2030 SDG deadline 
approaches. 
At Alphinity, we aim to be in front of 
the ESG and sustainability wave and 
will continue to focus on enhancing 
our overall approach and increasing 
transparency for clients, at the same 
time as demonstrating to clients 
how responsible investment can be 
successfully implemented. 
Global Sustainable 
In 2021 we launched the Alphinity  
Global Sustainable Equity Fund to 
expand our sustainability offering 
beyond Australian shares. The 
strategy is consistent with the 
approach used by our Australian 
Sustainable Share Fund and aims 
to invest in companies which have 
strong ESG management practices in 
place, align positively with the SDGs, 
and have the potential to deliver 
strong financial returns. 
Members of:

ALPHINITY INVESTMENT MANAGEMENT  6
Responsible investment at a glance
Two distinct approaches to implementing our approach to responsible investment 
Using the Responsible Investment Association of Australia’s (RIAA) scale for responsible investment, we can group our 
responsible investment activities into two distinct buckets. 
1.	Core and Concentrated funds: Using active engagement and ESG integration to manage ESG-related risks and 
identify opportunities. These funds also apply negative exclusions (subject to a 10% revenue threshold) for producers 
of thermal coal, tobacco, and controversial weapons. 
2.	Sustainable funds: Sustainable themed investing using activity-based negative exclusions (for example, fossil 
fuels, alcohol, gambling), company engagement, ESG integration, and the SDGs as a way to identify and invest in 
companies that can deliver positive outcomes for society and the environment.
Five pillars of responsible 
investing
We are committed to investing 
responsibly because we believe that 
environmental, social and governance 
(ESG) factors can have a material 
impact on both the risk and the 
returns of investments.
Environment
•	 Climate change/emissions
•	 Pollution
•	 Biodiversity/deforestation
•	 Resource use (water, energy, waste)
Social
•	 Customer satisfaction
•	 Data protection & privacy
•	 Diversity
•	 Employee engagement
•	 Human rights & labour standards
Governance
•	 Board & executive composition
•	 Committee structure
•	 Bribery & corruption 
•	 Lobbying
•	 Whistleblower schemes
ESG RISK INTEGRATION
We integrate ESG factors through 
investment decision making 
TRANSPARENCY
We have a public ESG policy 
in place and disclose our proxy 
activities and portfolio holdings
STEWARDSHIP AND 
ACTIVE ENGAGEMENT
We are active managers and focus 
on using our influence to encourage 
better ESG outcomes and reduce risk
ADVOCACY
We consider, assess and advocate 
for further action on key 
sustainability thematics like climate 
change and modern slavery
SUSTAINABLE STRATEGIES 
USING THE UNSDGS
We have two dedicated 
sustainability strategies structured 
around the SDGs

7  ESG AND SUSTAINABILITY REPORT 2021
Report highlights 
About us
Alphinity
•	 Established in 2010
•	 17 employees
•	 29% female employees 
•	 5 strategies across 
Australian and Global 
equities
•	 136 companies held 
in FY21
Sustainable funds 
Two strategies that align 
with the United Nations 
Sustainable Development 
Goals (SDGs)
Sustainable Compliance 
Committees 
•	 Sustainability specialists
•	 Elaine Prior – ESG expert
•	 Melissa Stewart – 
Human rights expert
Supporting investor-
led change through 
collaborative 
engagements
FY21 ESG and sustainability enhancements
Two dedicated ESG and 
Sustainability resources 
join Alphinity
Jessica Cairns and Moana 
Nottage support the 
domestic and global 
investment teams 
Proprietary ESG risk 
review framework 
Introduced a materiality 
assessment tool that enables 
the investment team to 
consistently identify and 
assess material ESG issues 
for companies across our 
portfolios
Targeted company 
engagement on ESG 
and sustainability 
matters
Active ownership 
demonstrated in 
76 tailored ESG and 
sustainability meetings
In-house sustainability 
assessment aligned to 
the UNSDGs
SDG analysis completed 
for 150 companies across 
domestic and global 
equities
SDG outcomes from our Domestic Sustainable and Global Sustainable strategies
Sustainable thematics
•	 Sustainable cities
•	 Inclusive economies
•	 Healthy lives
•	 Climate action
Strongest overall SDG alignment 
Strongest sector alignment
•	 Industrials
•	 Health Care
•	 Financials
•	 Information Technology
Understanding our investment risks: A deep dive into two key sustainability areas
Climate change
Alphinity carbon exposure:
•	 Weighted average carbon intensity: 
148 CO2e/$USm revenue
•	 Total carbon emissions: 992 994 
tonnes CO2e
•	 Carbon footprint 69.3 CO2e/
$AUDm invested
Key insights for FY21 holdings: 
•	 75% have a carbon policy 
•	 51% pledged to achieving net zero
•	 56% disclosed interim targets
•	 21% certified to the Science Based 
Targets Initiative
Modern slavery and human rights
Modern slavery risk areas: 
•	 Upstream supply chain risks
•	 Downsteam product and service value chain risks
•	 Operational risks
Key insights for FY21 holdings:
•	 24% present a high risk in at least one of the three risk areas. 
Of these, 82% have human rights policies and management 
systems in place 
•	 Technology (including communications) and financial sectors 
are particularly exposed to downstream value chain risks
•	 Industrials, consumer discretionary, and consumer staples are 
the sectors most exposed to supply chain risks

ALPHINITY INVESTMENT MANAGEMENT  8

9  ESG AND SUSTAINABILITY REPORT 2021
Who we are 
Alphinity is an active equities investment manager based in Sydney. Our 
purpose is to always put clients’ interests first by striving to deliver consistent 
outperformance. We do this through our philosophy of investing in quality, 
undervalued companies which our research concludes are in, or about to 
enter, a period of earnings upgrades.
Alphinity was established in 2010 by its four founders who had all worked 
together in Australian equities at a large global firm since the early 2000s. 
In 2015, Alphinity expanded to include a highly experienced global investment 
team applying the same philosophy and process to the much larger set of 
investment opportunities outside of Australia. We now have dedicated teams 
managing both Australian and global equity funds, supported by a range of 
specialist resources. 
Our boutique ownership structure results in a powerful alignment between 
our fund managers and the objectives of investors in our funds. By outsourcing 
business management, distribution, administration and some compliance 
services to Fidante Partners, it allows us to focus solely on investing and adding 
value to our clients.
Here at Alphinity, we have:
•	 a well-defined investment philosophy with a sole focus on investing in 
quality undervalued companies in an earnings upgrade cycle
•	 a distinctive, disciplined, and rigorous research process. This process is a 
truly unique partnership between detailed analyst-driven fundamental 
research and targeted quantitative research inputs that help identify 
companies that fit the investment philosophy
•	 two highly experienced, accomplished, and cohesive investment teams
•	 a business structure which strongly aligns the objectives of our investors 
with our investment staff
•	 domestic and global analysts and portfolio managers all based in Sydney.
We have five active strategies across domestic and global equities, including 
two dedicated sustainable strategies. Our sustainable strategies aim to invest 
in listed global and Australian shares that have the capacity to make a positive 
contribution to society in areas of economic, environmental and/or social 
development by contributing towards the advancement of at least one of the 
Sustainable Development Goals. 
ABOUT ALPHINITY
ESTABLISHED IN 
2010
5
strategies across 
global and domestic 
equities
2
dedicated 
sustainable strategies
17
full-time employees
A$15.3B*
assets under 
management
* as at 30 June 2021

ALPHINITY INVESTMENT MANAGEMENT  10
Our team 
Figure 1. Alphinity team structure
Global
Jeff Thomson
Portfolio Manager
Mary Manning
 Portfolio Manager
Jonas Palmqvist
Portfolio Manager
Nikki Thomas 
 Portfolio Manager
Trent Masters 
Portfolio Manager
Domestic
Stephane Andre
 Principal, Portfolio 
Manager
Johan Carlberg 
Principal, Portfolio 
Manager
Bruce Smith 
Principal, Portfolio 
Manager
Andrew Martin 
Principal, Portfolio 
Manager
Stuart Welch 
Portfolio 
Manager
Jacob Barnes 
Research Analyst
Andrey Mironenko 
Research Analyst
Shared resources
Jessica Cairns 
ESG and Sustainability 
Manager
Moana Nottage 
ESG and Sustainability 
Analyst
Elfreda Jonker 
Client Portfolio 
Manager
Andrew Taylor 
Head of Trading
Richard Hitchens
Senior Quantitative 
Analyst
Fidante Administration and Distribution (~160 staff)
Investment
Operations
Risk & Performance
Compliance
Fund Finance
Business services

11  ESG AND SUSTAINABILITY REPORT 2021
Diversity 
We celebrate that our workforce is 
culturally diverse with people from a 
range of backgrounds and nations. 
In the past year we have significantly 
increased our gender diversity across 
all levels of the organisation.
Figure 2. FY21 gender diversity metrics 
All employees
Portfolio Managers
Our funds 
Alphinity has five active strategies across domestic and global equities with total funds under management of 
A15.3 billion as of 30 June 20211. 
Fund Name 
Strategy Summary 
Year 
established
Number 
of stocks
Alphinity Australian 
Share Fund 
Diversified portfolio of quality large-cap 
Australian shares 
2010 
35-55
Alphinity Concentrated 
Australian Share Fund 
Concentrated portfolio of Australian shares 
representing our best ideas 
2010 
20-35
Alphinity Sustainable 
Share Fund 
Diversified portfolio of Australian shares which 
have strong ESG practices and support one or 
more of the SDGs 
2010* 
35-55
Alphinity Global Equity 
Fund 
Concentrated portfolio of high-quality global shares 
diversified across different industries and countries
2015
25-40
Alphinity Global 
Sustainable Equity Fund 
Concentrated portfolio of global shares that have 
strong ESG practices and support one or more of 
the SDGs 
2021
25-40
*Revised in 2017 around the SDGs
1	 Source: Fidante Partners
29+71v
Female
29%
Male
71% 20+80v
Female
20%
Male
80%

ALPHINITY INVESTMENT MANAGEMENT  12
We integrate environmental, social, and corporate governance (ESG) 
considerations across all portfolio’s that we manage. We consider ESG 
as an essential part of our investment process and use our role as active 
investment managers to work with companies to improve overall ESG 
management and outcomes.
Introduction 
The integration of environmental, social, and corporate 
governance factors into our investment management 
processes and ownership practices is essential for our 
success as investment managers. We recognise that ESG 
factors can have a material impact on the performance 
of companies (positively and/or negatively) within our 
portfolios and use our role as active investment managers 
to advocate for companies, where possible, to mitigate 
potential risks and improve our overall understanding of 
individual companies’ management of ESG issues. 
All members of the Alphinity investment team are 
responsible for integrating ESG considerations into 
investment decisions. Our ESG policy (available on our 
website) is applicable to all Alphinity funds and sets out 
the overarching principles and guidelines we apply to 
ensure that environmental, social and governance risks 
and opportunities are adequately considered as part of 
our investment processes.
FY21 enhancements 
In FY21 we made a number of important enhancements to 
our company-wide approach to ESG integration, including: 
Dedicated ESG resources
In August 2020, Jessica Cairns joined Alphinity in the 
role of ESG and Sustainability Manager. In June 2021, 
following 12 months working with the team as a paid 
intern while completing university, Moana Nottage joined 
Alphinity on a full-time basis in the new role of ESG and 
Sustainability Analyst. 
Jessica and Moana support the investment team to 
integrate ESG across the management of all funds, provide 
training, undertake research, company engagement, and 
report on key thematic areas like climate change and 
modern slavery.
Oversight of engagement activities 
To support outcomes-focussed engagement, we have 
implemented new tools to track ESG-related engagement 
activities including specific engagement objectives, 
themes, and outcomes. 
ESG risk identification 
Building on our existing ESG integration processes, we 
have introduced a materiality assessment tool to support 
the investment team to consistently identify and assess 
material ESG issues for companies across our portfolios. 
See Figure 4 for an illustrated example.
This tool was established in FY21 and therefore 
implementation is ongoing. We anticipate that 
assessments for all investee companies will be completed 
by January 2022. 
The outputs from the assessment process will be used 
to develop a revised ESG risk register to track and 
monitor ESG-related risks and management strategies 
for our holdings. 
ESG data providers
To supplement our use of the MSCI ESG Research 
database, Refinitiv Eikon was added as an additional ESG 
research and data provider. Refinitiv provides granular 
ESG data that supports our research at both the company 
and portfolio levels. 
OUR APPROACH TO 
ESG INTEGRATION

13  ESG AND SUSTAINABILITY REPORT 2021
ESG integration process 
We integrate ESG-related considerations across all 
portfolios that we manage. Regardless of whether 
a company is being reviewed for our sustainable or 
core strategies, we use the same overall approach to 
identify, consider, and manage ESG-related threats and 
opportunities (Figure 3).
ESG integration is an iterative and dynamic process, 
informed by a range of inputs. These include ESG data 
and research, company disclosure, company engagement, 
thematic level research, changes in the market, societal 
expectations, and policy conditions.
This approach is implemented as part of our due diligence 
process for stock initiation and on an ongoing basis as part 
of stock ownership and active portfolio management. 
ESG-related threats and opportunities are identified 
and reviewed on an ongoing basis. Where appropriate, 
ESG-related impacts are integrated into investment 
decision making. This may include: excluding stocks 
based on activities, quantitatively reflecting the impacts 
in valuations, or qualitatively managing the risks through 
portfolio construction processes. 
Company engagement is an essential part of our overall 
process of assessing ESG threats and opportunities. 
We generally approach this in two ways:
1.	Seeking clarifications as part of general investment 
meetings
2.	Through dedicated meetings to gather information 
and/or achieve a particular objective (can be 
controversy/issue related or around certain ESG topics).
Information on our FY21 engagement outcomes is 
presented in a later section of this report.
Depending on the issue being addressed, engagements 
can take the form of 1 on 1 or group meetings or calls 
with senior executives/directors, or with internal experts 
within the company (for example, Head of Sustainability).
Figure 3. Our approach to ESG integration
Alphinity’s multi-faceted approach to ESG integration includes research, a structured risk review process, ESG 
consideration in investment decision making, ongoing reporting and review, and use of engagement to better 
understand ESG risks and opportunities and advocate for change.
ESG 
integration
ESG data and 
research 
Risk review
Investment 
considerations
Reporting and 
review
Engagement
ESG DATA AND RESEARCH
• Using external data providers, company 
disclosures, and third-party research we collect 
information on ESG-related topics and issues
• Where needed we seek advice from external 
experts on specific ESG issues or topics
REPORTING AND REVIEW 
• We integrate ESG factors into internal reporting
• We regularly review our position on ESG threats, 
opportunities and mitigation measures, and discuss 
implications at investment meetings
ENGAGEMENT 
• We actively engage to 
better understand ESG risks 
and opportunities, and 
advocate for change
• We engage with a range of 
company representatives, 
as well as external 
experts where needed 
• We engage on an ongoing 
basis during and between 
reporting seasons
RISK REVIEW 
• Material ESG issues are identified 
considering a standard set of ESG-
related topics
• ESG-related impacts and issues are 
identified and managed as appropriate 
INVESTMENT CONSIDERATIONS 
• The means of integrating ESG issues 
into our investment process varies 
depending on the specific ESG risk 
that’s been identified
• Factors may be qualitatively considered 
or quantitatively incorporated into our 
valuation process where relevant
• Consideration of ESG factors may result 
in a range of outcomes like the outright 
avoidance of a company with poor 
ESG performance, or the inclusion of 
a carbon tax allocation for future cash 
flow projections

ALPHINITY INVESTMENT MANAGEMENT  14
FY21 enhancement: ESG materiality assessment tool 
Building on our existing ESG integration processes, we 
have introduced a materiality assessment tool that enables 
the investment team to consistently identify and assess 
material ESG issues for companies across our portfolios.
The below graphic illustrates this process for two 
company examples: one consumer company and one 
materials company. This assessment covers around 
30 material issues and assigns one of six materiality 
indicators to those that are relevant to the company and/
or sector. This list is dynamic and reviewed on an ongoing 
basis, by the relevant analyst in collaboration with the 
ESG specialists, to ensure completeness over a range of 
ESG issues and maintain relevance across all sectors.
Completing this process using a consistent set of material 
issues helps to ensure we are considering a full range of 
ESG topics and not just focusing on what ismost topical 
at a point in time. The same approach is applied to all 
stocks across all funds.
Insights gained through this process are used to identify 
the most material and relevant ESG risks and, where 
necessary, develop appropriate management strategies 
that inform our engagement agenda, financial modelling 
and investment decision making.
Figure 4. Materiality assessment illustration
Material ESG issues
Company specific opportunities and risks 
Analysis
Company specific analysis 
using third party data, 
team insights, outcomes 
of engagements, and 
company disclosure
Company specific issues and risks 
Environment
Carbon (direct)
Carbon (indirect)
Water
Waste
Packaging
Pollution
Biodiversity 
Raw materials sourcing
Green products
Carbon neutrality 
Animal welfare
Land use
Climate change vulnerability 
(physical) 
Social
Labor management
OH&S
Human capital development
Supply chain labor / human 
rights
Diversity & inclusion
Product safety & quality 
Privacy and data 
Indigenous participation
Nutrition and health 
Customer support 
Community impact
Governance
Corporate governance
Ethics and corruption
Board composition & 
effectiveness
Remuneration
Competitive behaviour
Leadership & partnerships
Example industry company:
Consumer
Materials
Environment
Carbon (direct)
T
r
Carbon (indirect)
r
O
Water
T+
Waste
T
Packaging
T
Pollution
T
Biodiversity 
T
Raw materials sourcing
T+
Green products
O
O
Carbon neutrality 
O+
Animal welfare
T
Land use
T+
Climate change vulnerability 
(physical) 
T
Social
Labor management
T+
T+
OH&S
T
T
Human capital development
O+
T+
Supply chain labor / human rights
T+
r
Product safety & quality 
T
Privacy and data 
T
Indigenous participation
O
T/O
Customer support 
O+
Community impact
T/O
Governance
Corporate governance
O
Ethics and corruption
T+
Remuneration
T/O
Competitive behaviour
T
O+
High opportunity
O
Opportunity
T/O
Threat/Opportunity
T
Threat
T+
High threat
r
Relevant

15  ESG AND SUSTAINABILITY REPORT 2021
Lynas – ESG integration in practice
Lynas is the only producer of scale of separated Rare 
Earth outside of China and the second largest in the 
world. Its Mount Weld Rare Earth deposit in Western 
Australia is acknowledged as one of the highest-grade 
Rare Earths mine in the world. Lynas is also vertically 
integrated, operating a processing and separation 
plant in Kuantan, Malaysia.
Rare Earths are used in many high tech and future- 
facing industries, including electronics, wind turbines, 
catalytic converters, and electric and hybrid motor 
vehicles.
Stock initiation
In January this year, as part of our stock review process, 
we conducted due diligence on Lynas Rare Earth’s ESG 
management practices focusing on two primary issues:
1.	The status of Lynas’ relationship with the Malaysian 
community, and ongoing risks related to operational 
disruption and changes to its licensing conditions.
2.	Radiation levels of Rare Earths’ processing waste 
and its potential for contamination.
Rare Earths are processed in several stages. Currently, 
Lynas extracts the Rare Earths in Kalgoorlie, then 
ships the minerals in a concentrated form to Malaysia 
for additional processing and separation. Lynas has 
been operating in Malaysia for more than 10 years 
and during this time its presence has become highly 
politicised with community concern about possible 
contamination from radioactive waste. During 2019 
and 2020, a number of licensing changes were 
negotiated with the Malaysian Government to maintain 
its operating licence and address community and 
political issues. It was agreed that by 2023 Lynas would 
relocate its cracking and leaching processing operations 
from Malaysia to Kalgoorlie in Western Australia and 
establish a dedicated Permanent Disposal Facility in 
Kuantan for the radioactive waste. The separation plant 
would be allowed to be kept in Malaysia. 
To properly understand ongoing community and 
political risks in Malaysia, and the potential risks of 
moving a share of its operations back to Kalgoorlie, we:
•	 initiated multiple targeted engagements with senior 
company management
•	 spoke to experts in Rare Earth processing and 
Malaysian politics
•	 sighted company testing documents showing the 
radiation levels of the waste.
Outcome
Following the engagements with the company 
and conclusions from our own research, we were 
comfortable that the ESG risk profile of Lynas is 
improving with the relocation of some operations to 
Western Australia, and increased effort in community 
engagement. 
Environmental approvals appear to be well under 
way in Kalgoorlie with State and Federal support 
to the industry. Having seen reports regarding the 
radioactivity levels of the waste, we are comfortable 
that the actual risk of environmental contamination is 
quite low, as the level of radioactivity is minimal, like 
that found in fertiliser. 
We will continue to engage with the company as it 
finalises the transition to Kalgoorlie and establishes the 
dedicated permanent waste facility in Malaysia. 
CASE STUDY

ALPHINITY INVESTMENT MANAGEMENT  16
As investors, we have the ability to influence the behavior and actions of 
companies we are invested in. We take this responsibility very seriously and, 
where possible, aim to use this influence to create positive outcomes for 
the business, shareholders, and society more broadly. 
Proxy voting 
We vote all resolutions 
put to shareholders 
(where we vote on 
behalf of our clients)
We actively engage 
with companies we 
are invested in on an 
ongoing basis
We seek to manage 
controversies and 
issues with clear 
engagement 
objectives and actions 
We collaborate with 
other investors where 
possible to achieve 
greater impact
We believe the right to vote as a 
proxy for our investors is a valuable 
asset. We intend, wherever possible 
and practical, to vote on every 
resolution put to shareholders. Our 
primary objective when voting is 
to maximise the value of our unit 
holders’ investments. We will comply 
with a mandate client’s instruction to 
vote in a particular manner; however, 
any such instruction will not bind 
the votes we exercise on behalf of 
any other clients. Where we vote 
against the recommendation of 
the board, we aim to engage with 
the company, before and after the 
vote, to explain the reasoning and 
hopefully encourage change.
In FY21 we voted on all resolutions 
where we have voting rights. Actual 
votes exercised in calendar 2020 are 
available here and 2021’s votes will 
be published in January. 
We don’t often need to vote 
against resolutions due to our 
ESG management processes. 
Many resolutions that go to AGMs 
are quite routine and relate to 
Director re-elections. The most 
contentious voting issues are 
usually around compensation, for 
example Remuneration Reports and 
incentives. 
In recent years there has been an 
increase in shareholder activism 
around the world, particularly related 
to climate change. In Australia, the 
preferred method of activists has 
been to submit two resolutions: 
the first proposing a change to 
the company’s constitution to 
allow binding resolutions, and the 
second to address a particular issue 
or compel a course of action. For 
example, to increase disclosures, 
make a net zero emissions 
commitment or refrain from a 
certain activity. 
Generally, we resist constitutional 
changes as we believe the existing 
Corporations Law already provides 
shareholders with adequate access 
to companies’ public meetings. 
Sometimes however, the subsidiary 
resolutions are worth supporting and 
we will do that in order to reinforce 
to management that the issue is 
worthy of consideration. This is done 
on a case-by-case basis and backed 
up by direct discussion with the 
company.
For companies held in our global 
portfolios, shareholder-proposed 
resolutions are quite common. We 
consider all resolutions, including 
shareholder resolutions, on a case-
by-case basis. 
ACTIVE OWNERSHIP

17  ESG AND SUSTAINABILITY REPORT 2021
CASE STUDY
Alphabet Proxy Voting 
While Alphabet is primarily known for the Google search engine that allows us unlimited access to information 
on the internet quickly and simply, it is the immense data generation and AI capabilities that underpin this aspect 
of Alphabet that entrenches Alphabet’s dominance in online advertising markets and allows Alphabet to position 
itself in a range of adjacent industries. 
Despite our positive view on the core business, there are various governance issues that we monitor closely 
relating to Alphabet’s share class structure and remuneration. These governance issues are not material enough to 
preclude investment, but they do warrant attention. 
At the June 2021 Annual General Meeting there were a total of 21 resolutions proposed, including eight 
proposed by shareholders rather than the board. 
A number of these resolutions addressed risk areas identified through our internal ESG analysis and as such, we 
voted in favour of the following: 
•	 approve recapitalisation plan for all stocks to have one-vote per share 
•	 require an independent Director nominee with human and/or civil rights experience. 
We also voted against the re-election of four Directors based on their role in the Remuneration Committee and 
our ongoing concern regarding pay practices.

ALPHINITY INVESTMENT MANAGEMENT  18
Company engagement 
We aim wherever possible to engage 
with all the companies in which we 
have invested, as well as those we 
are considering investing, as we 
believe this is the most effective way 
to gain a detailed understanding of 
the ESG risks and opportunities they 
are facing. 
We engage with a range of internal 
stakeholders to better understand 
ESG issues and encourage stronger 
ESG outcomes. Depending on 
the specific issues involved, these 
will include the Chair, Directors, 
company executives, senior 
management and/or sustainability 
specialists. This is primarily done 
through 1 on 1 engagements 
however it can also include group 
investor meetings and collaborative 
engagements through industry 
groups such as PRI, RIAA, CA100+ 
or 40:40. 
We record all dedicated ESG 
engagement activities separately 
to regular company meetings in an 
engagement log and track progress 
against specific engagement 
objectives. 
FY21 engagement outcomes 
Engagement metrics and themes
In FY21 we conducted 76 company 
engagements with a specific focus 
on ESG and sustainability across 
our global and domestic funds. This 
does not include general investment 
meetings held throughout the year, 
for example during reporting season, 
where the primary focus is around 
financial performance, although 
material ESG matters are frequently 
also raised in these meetings.
A full list of ESG engagements for 
FY21 are available in Appendix 1.
The ESG-related topics shown in 
Figure 5 are the ten most discussed 
ESG themes from our FY21 ESG 
company engagements. Of these, 
climate change and governance 
were the two most common topics.
Climate change represents a 
significant systemic challenge for 
the global economy and as such 
was a central topic for engagement. 
Discussions covered net zero 
commitments, low carbon transition 
plans, emissions footprints and 
reporting, and management of 
physical risks. 
Governance is also a common 
topic for engagement. Along with 
the usual governance topics, in 
the past year discussions have also 
been focussed on the integration 
of sustainability aspects into 
corporate governance frameworks. 
For example, the way sustainability 
targets are linked to senior 
management responsibilities and 
compensation. Human rights, 
modern slavery, health and safety 
and environmental management 
were also discussed at about 30% of 
meetings last year.
Figure 5. FY21 engagement metrics and insights
NUMBER OF COMPANY 
ENGAGEMENTS: 
76
33%
of meetings were 
organised to discuss active 
controversies 
64%
of meetings included a 
discussion on governance 
63%
63% of meetings included a 
discussion on climate change 
and carbon emissions 
Waste
Sourcing
Strategy
Workforce 
Human rights
Heritage 
Environment
Health and safety
Community
Sustainability Strategy
Climate Change 
Governance
0
5
10
15
20
25
Number of meetings

19  ESG AND SUSTAINABILITY REPORT 2021
Heritage, community engagement 
and social licence were topics that 
featured prominently in discussions 
with Australian metals and mining 
companies following the destruction 
of the Juukan Caves in May 2020.
Engaging with specific objectives 
Although we will react to specific 
controversies or events, such as the 
destruction of Juukan Caves by Rio 
Tinto, we primarily aim to be proactive 
and to use engagements to encourage 
specific objectives and outcomes. 
In FY21 we engaged on a range of 
specific issues with companies in our 
portfolios. For each engagement we 
determine a set of objectives and 
monitor progress through ongoing 
engagement (Table 1). 
Table 1. FY21 engagements with specific objectives (examples) 
Company 
Issue title 
Objectives 
Status
Comments
Domestic
BlueScope Steel
40:40 Vision 
1 Become signatories of the 
40:40 Vision Initiative 
Closed
Company became a 
signatory in April 2021.
Steadfast 
Remuneration 
structure 
1 Encourage changes to 
remuneration structure
Closed
Board agreed to lift the FY21 
starting EPS number. 
Oz Minerals 
Climate change 
1 Introduce climate targets 
aligned with the Paris 
agreement
Closed
Company has made a 
commitment to net zero with 
medium-term targets and 
action plan disclosed. 
BlueScope Steel 
Climate change 
1 Improve accountability 
for climate change 
2 Introduce climate targets 
aligned with the Paris 
agreement 
Partially 
addressed
Company appointed new 
Executive for Climate Change 
with an intent to strengthen 
its targets and strategy.
CSL
Exploitation 
claims of donors 
in the US
1 Assess ethical issues related 
to placement of donor centres 
in low-income regions
2 Encourage a commitment 
to do more advocacy in 
donor health monitoring
Partially 
addressed 
Objective 1 is closed. 
Company confirmed it is 
considering more advocacy, 
for example, to complete 
donor centre impact study.
centre impact study.
Cleanaway 
Waste 
Management
Culture of 
bullying and 
harassment 
under CEO
1 Discuss allegations over 
CEO behaviour, bullying 
and harassment 
2 Determine if issue is 
systemic within organisation
Partially 
addressed 
Removal of CEO addressed 
immediate concerns. We 
are now monitoring culture 
under new leadership. 
Rio Tinto
Destruction of 
Juukan Caves
1 Monitor progress to 
implement a new Social 
Performance function 
2 Monitor response to 
Australian government 
recommendations 
on Heritage 
3 Actively engage on all 
potential social licence issues
Ongoing
Ongoing engagement with 
senior managers.

ALPHINITY INVESTMENT MANAGEMENT  20
Company 
Issue title 
Objectives 
Status
Comments
Domino’s Pizza 
Enterprises
Lagging ESG 
rating and 
disclosure
1 Improve the company’s 
overall ESG disclosure and 
MSCI score
Ongoing 
Company has appointed 
Executive for Climate 
Change, committed to 
improving disclosure and 
engaged with MSCI.
Goodman 
Group
Ongoing 
concern with 
remuneration 
report
1 Encourage engagement 
with proxy advisors related 
to remuneration report
2 Establish targets and 
outcomes for diversity, 
circular economy, and 
modern slavery 
Ongoing
Formal engagement kicked 
off in May 2020.
Amcor
Use of recycled 
plastics/
Suitability for 
SSF
1 Establish targets related to 
the use of recycled plastic 
resin in production 
2 Establish clear accountability 
for sustainability strategy 
from top down
Ongoing
Ongoing engagement with 
senior managers. Confirmed 
as not suitable for SSF at 
this stage.
Global
Mondelez
Modern slavery
1 Assess management of 
cocoa supply chain issues
Closed
Divested in December 2020 
due to a weaker investment 
case, including ongoing 
ESG risks.
Nomad Foods
Sustainability 
and ESG risks 
1 Confirm sustainable 
sourcing practices 
2 Determine proportion of 
food that is ‘healthy’ to 
align with SDG3 
Closed
Satisfactorily addressed 
both objectives. 
Suitable for the Sustainable 
fund. 
Royal DSM
Emissions
1 Clarify emissions footprint
2 Confirm strategy to reduce 
emissions and timing for 
transition to sustainable fuels
Partially 
addressed
Company confirmed vitamin 
manufacturing is energy 
intensive and largely gas 
powered. Ongoing discussion 
is needed. 
Chipotle 
Mexican Grill
Workforce 
management
1 Determine extent and 
nature of fair work 
controversy
Ongoing
Engagement was initiated 
in May 2021. Management 
confirmed basis of 
controversy and remains 
under negotiation. 
Follow up is needed.
Teck Resources
Fossil fuel 
exposure and 
ESG risks
1 Clarify long-term met coal 
production strategy
2 Discuss heritage 
management practices 
and risk in Canada 
Closed
Generally good ESG 
management practices in place, 
however, high metallurgical 
coal exposure prohibits 
inclusion in the Sustainable 
Investment Universe.

21  ESG AND SUSTAINABILITY REPORT 2021
Company 
Issue title 
Objectives 
Status
Comments
Giant 
Manufacturing
Sustainability 
and ESG risks
1 Assess management 
of labor and modern 
slavery risks
2 Clarify timing for improved 
ESG and sustainability 
disclosures/reporting
Closed
Not considered suitable for 
inclusion in the Sustainable 
Investment Universe due to 
high ESG risks. Reassess after 
review of first ESG report 
in 2023.
HelloFresh
Sustainability 
and ESG risks
1 Clarify strategy for low 
cost EveryPlate brand
2 Confirm risk management 
practices for sourcing
3 Encourage disclosure of 
quality and safety metrics
Partially 
addressed
Company confirmed intent 
to expand EveryPlate to 
all markets. Overall strong 
ESG management practices, 
however, will continue 
to engage on enhanced 
disclosures.
ING Groep
Sustainability 
and ESG risks
1 Assess responsibility of 
lending practices
2 Determine nature and 
outcomes of recent AML 
controversies
Closed
Satisfactorily addressed 
both objectives. Monitor 
controversy management. 
Suitable for inclusion in 
the Sustainable Investment 
Universe. 
Pulte Group
Lagging ESG 
management 
and disclosure 
1 Confirm strategy related to 
affordable homes
2 Evaluate ESG management
3 Encourage enhanced 
sustainability disclosure
Partially 
addressed
Objective 1 is closed. ESG 
management is satisfactory, 
and company is seeking to 
strengthen overall approach, 
resourcing, and disclosures. 
John Deere
Sustainability 
and ESG risks
1 Clarify sustainability case 
for precision agriculture
2 Assess modern slavery and 
operational ESG risks 
Partially 
addressed 
Company has strong 
sustainability offerings. 
Will continue to engage on 
diesel reduction and new 
technology uptake. 
Suitable for inclusion in 
the Sustainable Investment 
Universe. 
Volvo Group
Sustainability 
and ESG risks
1 Confirm timing and strategy 
around carbon neutral fleet
2 Assess modern slavery and 
operational ESG risks
Ongoing
Company is leading in 
the low carbon transition. 
Engagement will continue 
implementation of EV and 
hydrogen strategies. 
Suitable for inclusion in 
the Sustainable Investment 
Universe.

ALPHINITY INVESTMENT MANAGEMENT  22
Managing controversies 
Serious negative events — also known as controversies 
— can have a lasting impact on a company’s reputation 
as well as its valuation. Controversies can influence 
relationships with stakeholders including workforce, 
communities, industry partners and governments. 
Depending on the nature of these controversies, a 
company can also be exposed to severe operational and 
financial impacts like workforce strikes, site closures, 
regulatory and legal action, or fines, and or loss of future 
growth opportunities. 
Unfortunately, in the publicly listed equities space, there 
are few companies that have a clean slate when it comes 
to past or current active controversies. The larger and 
more diverse a company is, the more controversies it is 
likely to have experienced. 
When deciding on how to act in response to an ongoing 
controversy, we consider numerous factors including the 
severity of the issue, implications for business 
performance, visibility in the media, whether the issue 
should be considered isolated or systemic, whether 
there are cultural implications or concerns regarding 
corruption and ethics, and how timely and appropriate 
the company’s response has been. 
In some situations, the appropriate action might be to 
divest, however, most often the best action is to firstly 
engage with the business to properly understand the 
issue, adjust the portfolio to manage the risk if required, 
and continue to engage with the company over time to 
encourage appropriate behaviour in the future. 
In the past financial year there have been multiple active 
controversies which have required ongoing management 
and action. Examples include bullying claims against the 
CEO of Cleanaway Waste Management, Rio Tinto and 
the destruction of the Juukan Caves and modern slavery 
risks associated with Mondelez’s sourcing practices. 
Commentary on Rio Tinto and Mondelez is provided 
below. These three examples, as well as others, are 
included in Table 1 above. 
When faced with a new or changing controversy we generally follow a four-step process:
1 
ENGAGE 
with the company to 
understand the cause, 
impacts, and proposed 
management 
2 
VALIDATE 
the company’s account 
with external experts, 
further research, and 
other third-party views
3 
ACT 
to manage risk within 
the relevant portfolio/s. 
For example, by adjusting 
the active weight, divesting 
from the stock, and/or 
externally communicating 
our views
4 
MONITOR 
the issue through 
ongoing engagement 
and adjust actions as 
requiredactions 
as required

23  ESG AND SUSTAINABILITY REPORT 2021
CASE STUDY
Mondelez 
Through engagement and ongoing monitoring 
of the company, we have seen Mondelez make 
progress on key ESG issues like modern slavery, 
packaging, and emissions over the last few years. 
Regardless of the company’s progress we still assess 
the cocoa supply chain risks as high. 
In response to the specific controversies related to 
supply chain management and cocoa farming risks:
•	 we engaged directly with the company, 
including a member of the Sustainability team, to 
understand how they were managing this issue
•	 we reviewed its external documentation, along 
with industry reports, to validate its views
•	 despite some progress in rolling out its Cocoa 
Life program, we assessed the supply chain risks 
as remaining high. The outlook for earnings had 
also weakened due to growth investments and 
the probability of a normalisation of COVID-19 
stay-at-home consumption trends. As a result, we 
acted by exiting our position in our global fund 
in January 2021
•	 we will monitor the company’s progress on this 
issue and plan to re-engage over the next year, or 
if something material changes. 
Collaborative engagements
We look for opportunities to collaborate with other 
investors on a case-by-case basis. Generally, when 
considering participation in collaborative engagements 
we look for alignment with our portfolio holdings and 
ESG priorities. We also consider the objectives of the 
engagement and whether we anticipate that it will create 
additional impact beyond our existing engagement 
activities with various companies. We believe 
collaboration is particularly useful for technically difficult 
areas like climate change. 
We are members of the Investor Group on Climate 
Change, signatories to the Climate Action 100+ working 
group, and have collaborated with other investors on its 
engagements with Incitec Pivot and Orica. We are also 
members of the 40:40 Vision Investor Working Group, 
and members of the Investors Against Slavery and 
Trafficking initiative (IAST).
In October 2020, industry super fund 
HESTA launched the 40:40 Vision Initiative, 
an investor-led collaborative initiative 
that aims to see women fill at least 
40% of executive roles in ASX200 listed 
companies by 2030. BlueScope Steel, one 
of our allocated engagements, has now 
committed to the 40:40 Vision targets 
and initiative.

ALPHINITY INVESTMENT MANAGEMENT  24
Rio Tinto and the destruction of Juukan Caves
Background 
On 24 May 2020, Rio Tinto set off explosives which 
resulted in the destruction of the Juukan Gorge, 
home to one of Australia’s oldest and most significant 
locations of indigenous heritage. 
This event made worldwide headline news and has 
fundamentally shifted the way investors think about 
reputational risk, social licence to operate, and 
heritage management. 
As modest holders of Rio Tinto shares, we were 
horrified when this event occurred. Until then, we and 
the rest of the industry had viewed Rio Tinto, along 
with other large Australian miners, as leaders in the 
management of ESG risks.
As further information was released on the actions 
of Rio Tinto leading up to this event, we became 
increasingly concerned about Rio’s organisational 
culture, its leadership, and its ability to repair the 
relationships with key stakeholders, including the 
traditional owner group most impacted by the 
destruction of the caves, the Puutu Kunti Kurrama and 
Pinikura peoples (PKKP). 
Primary causes 
In our view, this primary causes of this event were:
•	 a lack of true and informed consent by the 
Traditional Owners to Rio Tinto as part of the 
mining development process
•	 weak oversight and governance by the Rio Tinto 
management and Board resulting in this site not 
being identified and managed as high risk through 
its internal management processes 
•	 a regulatory system which favours new mine 
development project approvals over the needs and 
views of traditional owners.
CASE STUDY

25  ESG AND SUSTAINABILITY REPORT 2021
Our actions 
•	 Engaged with the company to understand the 
issue: From the outset, we have been proactive in 
engaging with Rio Tinto leadership to understand 
the root causes of the event, Rio Tinto’s proposed 
solutions correcting the issues, and how best to take 
accountability for its failings to avoid the destruction 
of the caves. 
•	 Engaged with experts: In line with our process 
to manage controversial events, we also engaged 
with traditional owners and experts in indigenous 
heritage and native title law to more fully 
understand the impact it had on the PKKP. 
•	 Encouraged further action: Following the release 
of the Board review into the incident, we were 
part of a broad group of investors that encouraged 
further action against the CEO and responsible 
managers within the business. 
•	 Used our voting rights: In the lead up to the 2021 
AGM, we communicated to the Board that we did 
not support its position related to the ex-CEO and 
Executive payouts. We subsequently voted against 
the Remuneration Report, and the re-elections 
of both the Chair and the director leading the 
Remuneration Committee. We also considered 
voting against the re-election of the Chair of the 
Sustainability Committee; however, we believe her 
role to repair the relationship with the PKKP will be 
important over the coming years. We will monitor 
progress towards this objective closely and plan to 
re-engage during FY22. 
•	 Portfolio implications: Following the event, 
we did not increase our holding until we were 
comfortable that actions had been taken by the 
company to prevent this event happening in 
future. We also wanted to see that the company 
had begun to repair its external reputation before 
increasing our investment. 
Implications for the wider mining industry 
The event has shifted our thinking on heritage 
management and elevated our appreciation of the 
potential risks related to a company’s reputation and 
social licence. As a result, we have increased our level 
of engagement on heritage-related matters across 
all the mining companies we own and extended the 
discussion to other companies where this might also 
be relevant (for example, industrial companies). 
We will also be watching closely any subsequent 
changes to relevant regulation and social impact 
assessment or development approval frameworks. 
Conclusion
Ultimately, when considering how to manage 
significant controversies and ESG-related issues, we try 
to be forward-looking. Considering the changes it has 
made, we feel that the Rio Tinto of the future will be a 
very different company to the Rio Tinto of the past. 
We remain shareholders, thereby keeping a seat at the 
table and a degree of influence in future developments, 
but we have been – and will keep – closely monitoring 
the company’s policies and conduct to make sure the 
changes they have made are real and enduring.
Regardless of the company’s past failings, with the 
change in leadership and change in structure to 
manage heritage risks on the ground, we believe Rio 
Tinto is on the right path to start to repair its reputation 
and prevent the risk of this type of event re-occurring.

ALPHINITY INVESTMENT MANAGEMENT  26
In the past 12 months, sustainability-related thematics like climate change, 
modern slavery, diversity and inclusion, biodiversity and the circular economy 
have continued to gain traction amongst investors. 
The changing regulatory landscape and increasing 
activism by individual investors, investor groups and 
industry bodies, have been key drivers of this trend.
Given climate change and modern slavery are the two 
most dominant themes of FY21, we have detailed our 
management approach to these topical risks in the 
following sections of this report. 
Climate activism
The climate change thematic is proving to be the most 
pervasive and significant ESG driver of the last 10 years. 
More than 130 countries have now set a target of 
reducing emissions to net zero by 2050, including three 
of the largest and most influential global economies: the 
USA, China (by 2060), and the U.K. 
In May 2021 we were spectators to four landmark 
proceedings related to climate action: 
1.	a Dutch court found that Shell is required to reduce its 
total emissions by 45% by 2030
2.	Chevron shareholders approved a resolution to require 
that the company reduces its scope 3 emissions
3.	Exxon shareholders voted to remove three board 
members in favour of experts in renewable energy and 
climate science
4.	the Australian federal court found that the Minister for 
the Environment has a duty of care to protect young 
people from climate change. 
This year we also watched the ‘Say on Climate’ initiative 
take off with investors, with the aim to encourage 
companies to commit to a climate resolution at their 
Annual General Meetings whereby shareholders can vote 
on a company’s carbon strategy and action plan. So far, 
large contributors to global emissions including Unilever, 
Nestle, Royal Dutch Shell, BHP, Rio Tinto, and Santos have 
voluntarily adopted this initiative. 
KEY SUSTAINABILITY 
THEMES IN FY21
Climate Activism
• Net zero commitments 
• Say on Climate vote
• Regulatory action 
against companies
• Green hydrogen
Modern Slavery 
and Human Rights
• Australian Modern 
Slavery Act disclosures 
• Regional and 
commodity risks
Social 
• Culture and social 
licence 
• 40:40 Vision Initiative
• Workforce 
management 
• COVID-19 impacts 
Environmental
• Biodiversity
• Circular economy
Governance
• Linking Executive 
compensation to KPIs
• Sustainability 
integration through 
senior management 
and the board

27  ESG AND SUSTAINABILITY REPORT 2021
Modern slavery and human rights
Modern slavery in all its forms has emerged as one of the 
key human rights issues this year. In part, this is because 
of the requirement to report under the Australian 
Modern Slavery Act but it is also a sign of the growing 
focus on the social aspects of ESG. 
By the end of June 2021 more than 1900 
Modern Slavery statements had been 
publicly released through the Australian 
Government Modern Slavery register.
With the increased awareness of modern slavery risks, 
like the complexity of regional manufacturing hubs, 
commodity exposure, and the complexity of global supply 
chains, more companies are now exposed to reputational 
and legal risks associated with their management of 
human rights (for example, boycotts of Nike operations 
in China). 
The COVID-19 pandemic and economic shutdowns have 
highlighted the vulnerability of specific workers in our 
communities, especially those in low paid jobs like factory 
workers and those who are working in contract, part-
time or casual workforces. Looking ahead, we expect 
there will be an ongoing focus on workforce structures 
and the relationship with human rights abuses. 
The spirit of the Modern Slavery Act is to act as a carrot 
rather than a stick. No company is immune to the risks of 
modern slavery. We therefore believe it is important that 
companies increase their transparency and leadership on 
this issue, including where issues are found, as this better 
supports the identification and management of modern 
slavery that persists in our large, complex, and global 
supply chain networks.
Social elements 
The destruction of Juukan Caves in May 2020 was a 
catastrophic event that significantly altered the landscape 
of how companies and investors think about heritage 
management, social licence, reputational risk, and 
company culture. 
This event, as well as others related to management 
behaviour and decision making, has resulted 
in a heightened focus on company culture and 
reputational risk. 
Workforce management aspects like health and safety, 
diversity and inclusion, and labour rights continued to be 
ongoing ESG risk areas in FY21, particularly because of 
the workforce-related impacts of COVID-19.
Environmental elements 
With the ongoing attention on climate change risk 
management and mitigation, environmental elements 
like biodiversity and the circular economy are starting to 
become more topical for investors. 
The EU Green Deal aims to help Europe meet its net zero 
target and focusses on areas like waste management, 
sustainable food systems, protecting ecosystems and 
natural capital, and pollution. The EU Taxonomy was 
released earlier this year and has also increased the 
amount of investor focus on measuring environmental 
impacts and outcomes, and how best to avoid the risk of 
‘greenwashing’.
Although waste and packaging have both been strong 
environmental themes for a number of years, the focus 
has now evolved towards circular solutions through 
industry partnerships and supply chain initiatives. 
Governance 
Managing governance aspects of investee companies 
is core to our overall ESG management approach. 
Generally, the types of issues that are addressed are 
reasonably consistent year on year. This year, however, 
there has been increased attention on the link between 
executive compensation packages and sustainability 
objectives or outcomes, and the overall focus on 
managing sustainability risks at the Board level.
These aim to address the growing concern that 
ESG and sustainability might not be a core part of 
an organisation’s purpose and are therefore just a 
marketing exercise.
Linking ESG and sustainability with corporate governance 
ensures a top down approach with clear accountability and 
reporting requirements to the market. It also reduces the 
risk that companies could be accused of ‘greenwashing’.

ALPHINITY INVESTMENT MANAGEMENT  28
Climate change 
Introduction 
Alphinity acknowledges the findings of the 
Intergovernmental Panel on Climate Change and supports 
the United Nations Paris Agreement to limit global warming 
to well below 2°C, compared to pre-industrial levels. We 
believe that a global challenge such as this needs to be 
addressed by coordinated action from all parties, including 
investors, private business, and government. 
Carbon emissions generally refer to the total greenhouse 
gas (GHG) emissions caused directly and indirectly that 
contribute to global climate change. GHG emissions 
can be expressed as a carbon dioxide equivalent 
(CO2e), comprising seven GHGs identified by the Kyoto 
Protocol holding varying degrees of global warming 
potential. The GHG Protocol defines three key ‘scopes’ to 
categorise emissions:
Scope 1
Direct emissions from owned or controlled sources 
such as fuel combustion in buildings or vehicles. 
Scope 2
Indirect emissions from owned or controlled sources 
such as the purchase of electricity, steam, heating 
or cooling.
Scope 3
All other indirect emissions in a company’s value chain 
such as business travel, the extraction and production 
of purchased materials or the use of sold products 
or services.
Our operational impact 
Alphinity’s operational energy use is very small. In 
comparison to the emissions footprint from our 
investment activities, our operational impact is immaterial.
Our energy use consists of:
•	 electricity used to power our single office in Sydney, 
NSW (scope 2)
•	 indirect fuel use for air travel (scope 3)
•	 indirect electricity used when employees work from 
home (scope 3) 
•	 indirect energy use for operational goods like IT 
equipment and paper (scope 3). 
To confirm the immateriality of our footprint, we will 
estimate and report on our energy use and emissions 
from FY22. We will also implement a policy position 
to offset all business-related air travel. Currently most 
employees already do this, however this is not currently 
being tracked. 
Managing climate change in our 
investments 
As a key investment thematic, climate change presents 
a range of material social and economic threats and 
opportunities to investee companies. 
These threats and opportunities could be driven by the 
physical impacts of climate change (for example, increased 
average temperatures) or by the transition to a low 
carbon economy (for example, changes in local and global 
carbon policies as well as changes in demand and supply 
dynamics). To enable greater transparency and clarity 
around risks to individual companies and to financial 
markets more generally, we support and encourage 
disclosures in line with the recommendations of the Task 
Force on Climate-Related Financial Disclosures (TCFD).
The below sections have been developed in accordance 
with the TCFD recommendations. Through these 
disclosures we have addressed the governance, 
risk management, and metrics and targets related 
recommendations. The strategy requirements have 
been partially addressed as detailed scenario planning is 
needed before we are fully compliant. A reference table 
has been included in Appendix 2. 
Governance 
The Alphinity Board is responsible for approving the firm’s 
ESG policy and any associated disclosures, including our 
commitments to climate change. 
Alphinity reports on organisational risks to the Board of 
Directors, including risks related to ESG aspects such as 
climate change. From FY22 a dedicated report on climate 
change risk and management will be presented to the 
Board annually. This will be in addition to the ongoing 
risk reporting as part of our Governance, Risk and 
Compliance (GRC) Framework.

29  ESG AND SUSTAINABILITY REPORT 2021
The day-to-day management of climate-related threats 
and opportunities is the responsibility of all members of 
the Alphinity investment team. Where appropriate, this 
may include incorporating considerations into investment 
analysis, beliefs and decisions. 
Risks and Opportunities 
Across our portfolios we manage a number of specific 
climate-related threats and opportunities through 
investment decision making, valuation and modelling, 
and company engagement. 
These risks vary by sector and depend significantly on 
each company’s operating model, operational or asset 
locations, and appetite to transition towards more 
resilient business practices.
Our understanding of relevant climate risks has been 
developed based on our knowledge of investee 
companies and their strategies, participation in industry 
groups like the Investor Group on Climate Change 
(IGCC), and consideration of relevant climate scenarios 
(for example, the IEA Sustainable Development Scenario). 
Material risks in the short to medium-term 
High-level risks which could be material to our investment 
decisions in the short to medium-term (3-5 years) are: 
Short to medium-term risks (3-5 years)
Threat
Changes to global climate policies 
(for example, a carbon border tax) 
impacts the regulatory environment 
and operating conditions for investee 
companies, potentially affecting the 
cost of capital, reducing revenue 
and/or lifting costs, and prompting 
earnings downgrades, which could 
lead to share price declines.
Threat
Investee companies fail to 
appropriately plan for and estimate 
how the potential impacts of climate 
change may limit their future earning 
potential, leading to a loss of 
shareholder confidence and reduced 
financial performance.
Short to medium-term risks (3-5 years)
Threat
External pressure to set a net 
zero commitment, encourages 
investee companies to make false 
or misleading statements leading to 
regulatory or legal action.
Opportunity
Strategically considering climate 
change drivers as a business 
opportunity rather than a threat 
creates opportunities for new markets 
and/or revenue streams for investee 
companies. This increases shareholder 
confidence and reduces the likelihood 
that the low carbon transition will 
have an overall net negative impact 
on the business.
Additional material risks in the long-term 
Additional high-level risks which could be material to our 
investment decisions in the longer term (>5 years) are:
Longer term risks (>5 years)
Threat or 
Opportunity
Changes to global climate policies 
and global weather patterns, 
significantly impacts macro-economic 
factors like import/export markets, 
government investments, tourism and 
migration, and consumer behaviour, 
which significantly change global 
market conditions.
Threat
Changes to global climate policies 
affects global trade and impacts 
Australia’s position as a major 
exporter of minerals and energy. 
Opportunity
An accelerated transition to a low 
carbon economy creates new market 
opportunities, which continues 
to benefit businesses that are 
actively seeking to participate in the 
transition.

ALPHINITY INVESTMENT MANAGEMENT  30
Actions to address climate change 
Figure 6. Six pillars to support the low carbon transition and manage climate-related threats and 
opportunities across our portfolios. 
We consider 
climate 
change-
related risks 
as part of our 
fundamental 
approach 
to ESG 
management 
This risk 
analysis 
includes 
transition and 
physical risks
We use the 
CA100+ 
indicators 
to assess 
company 
specific 
performance 
We complete 
portfolio wide 
assessments 
on climate 
risk and 
opportunity to 
compare and 
benchmark
We exclude 
thermal coal 
producers 
from all 
portfolios 
For our 
Sustainable 
funds we 
exclude all 
fossil fuel 
producers
We measure 
the carbon 
intensity and 
absolute 
carbon 
footprints of 
our portfolios
We report 
regularly to 
our clients 
on portfolio 
emissions
We participate 
in collaborative 
engagements 
(for example, 
CA100+)
We encourage 
companies 
through 
engagement 
to reduce their 
emissions 
footprints 
and set clear 
targets 
We invest in 
companies 
supporting the 
low carbon 
transition  
We consider 
climate change 
factors in our 
investment 
case 
considerations 
when relevant 
Risk
analysis
Bench-
marking
Exclusion
criteria
Carbon
footprints
Company
engagement
Investment
case
considerations
In response to climate-related threats and opportunities, 
and to support the transition to a low carbon economy, 
we implement the following six core actions (Figure 6):
1.	Risk analysis: We identify climate-related risks at 
a company specific level using our fundamental 
approach to ESG integration. The analysis of climate 
climate-related risks includes consideration of risks 
associated with the low carbon transition and the 
physical impacts of climate change.
2.	Benchmarking: In FY21 we adopted the CA100+ 
framework (Figure 7) as the most appropriate way to 
assess the progress of individual companies towards 
net zero. Using this framework helps us to be 
consistent with a standard industry approach. 
Figure 7. CA100+ indicators
Indicators
Goal one: 
Action on 
emissions 
Indicator 1 – Net zero commitment 
covering all material emissions
Indicator 2 – Long-term target covering 
all material emissions and is aligned
Indicator 3 – Medium-term target covering 
all material emissions and is aligned
Indicator 4 – Medium-term target covering 
all material emissions and is aligned
Indicator 5 – Quantified decarbonisation 
strategy and green revenue targets
Indicator 6 – Capex alignment testing 
comprehensively in place
Indicator 7 – Robust climate policy 
engagement disclosure
Goal two: 
Strong climate 
governance
Indicator 8 – Robust climate governance 
in place
Indicator 9 – Just Transition planning 
in place
Goal three: 
TCFD aligned 
reporting
Indicator 10 – Robust TCFD reporting 
in place including 1.5 degree scenario

31  ESG AND SUSTAINABILITY REPORT 2021
We also complete portfolio wide assessments looking at 
emissions intensity and absolute emissions, relevant risks 
(for example, physical and transition risks), how risks are 
being managed, and overall commitments to net zero. 
3.	Exclusion criteria: We exclude thermal coal producers 
from all domestic and global portfolios and fossil fuel 
producers from our two dedicated sustainable funds. 
4.	Carbon footprints: We measure the carbon intensity 
and absolute emissions of all portfolios and report 
regularly to clients. For consistency, we use data from 
third party rating providers to complete this analysis. 
The main purpose of measuring portfolio emissions is 
to identify large contributors to our overall emissions 
intensity and prioritise engagement. 
5.	Targeted company engagement: We undertake 
targeted engagements with companies where we 
believe they:
	
a.	should improve their overall approach to climate 
change including governance, risk management, 
reporting, or strategy; and
	
b.	have an opportunity to actively contribute towards 
the low carbon transition. 
We also engage with companies on their use of climate 
scenarios, management strategies for future climate 
change risks, and plans to increase the resilience of assets 
once the physical impacts of climate change become 
more pronounced.
We track and measure outcomes of our ESG engagement 
activities, including those related to climate change. 
See the Company Engagement section of this report for 
more information. 
6.	Investment case considerations: We integrate 
climate-related threats and opportunities into 
investment decision making in line with our overall 
approach to ESG risk management. Specifically related 
to climate, there will be some situations where the 
risk to a company’s existing operations or outlook is so 
great that it will destroy the investment case entirely. 
We reached this conclusion with companies engaged 
in thermal coal mining for example. Notwithstanding 
the inevitable occasional period of cyclical strength in 
coal prices because of global factors, the medium and 
long-term risks for the companies primarily engaged 
in this activity are almost certainly greater than the 
potential reward. We concluded that it should not be 
invested in at all. 
CASE STUDY
Investing in companies driving 
the low carbon transition: 
Trane Technologies 
The Trane Technologies brands, including 
ThermoKing and Trane, bring sustainable, 
efficient climate solutions to buildings, homes, 
and transportation. 
Through these two distinct brands it:
•	 creates comfortable, energy efficient indoor 
environments for commercial and residential 
applications; and 
•	 provides climate-controlled solutions to move 
refrigerated food, medicines, and other 
perishables around the world.
In 2020, Trane Technologies launched a 2030 
Sustainability Strategy to achieve carbon neutral 
operations, zero waste to landfills and net positive 
water use, and reduce absolute energy use by 10%.
It also committed to reduce one gigaton of carbon 
emissions (CO2e) from its customers’ footprints 
by 2030. Trane has estimated that this reduction 
could equate to 2% of the world’s annual emissions 
– or, the annual emissions of Italy, France and the 
U.K. combined.

ALPHINITY INVESTMENT MANAGEMENT  32
Achieving positive outcomes through engagement: BlueScope Steel 
The problem:
BlueScope operates in a hard to abate sector and 
until recently had not made any clear commitments 
towards net zero. The company has a large operational 
emissions footprint and is a significant contributor 
to the overall emissions intensity of our domestic 
portfolios. 
Actions by investors:
As a large contributor to Australia’s emissions 
BlueScope is part of the CA100+ initiative’s focus 
companies for engagements. It has also been targeted 
by activist groups for its’ perceived lack of action on 
climate change.
As a large contributor to our investment emissions 
footprint, we have engaged extensively with 
BlueScope’s management to understand its’ climate 
change strategy and encourage further action to set 
clear commitments and reduce its’ emissions. 
In FY21 we had four dedicated meetings with the 
management on climate change aspects. 
Outcomes: 
In the past year, BlueScope has made several important 
changes to its commitments and climate strategy:
•	 Appointed a Group Executive for Climate Change
•	 Announced a scope 1 and 2 net zero target by 
2050 and an initial $150m allocation over next 5 
years towards the low carbon transition 
•	 Committed to several trials and/or investigations 
into new low carbon solutions and technologies 
such as hydrogen injection in blast furnace, 
hydrogen DRI as well as shorter term optimisation 
opportunities with increased scrap usage.
CASE STUDY

33  ESG AND SUSTAINABILITY REPORT 2021
Emissions intensity metrics and performance in FY21
We use a range of carbon-related metrics across our 
portfolios to help assess overall carbon exposure, sector or 
company level risks, and progress towards net zero. These 
metrics are useful indicators of a portfolio’s potential 
exposure to transition risks such as policy intervention 
or changing consumer behaviour. Figure 8 illustrates key 
findings regarding the carbon exposure and company 
management for our domestic and global funds.
Unless specifically requested by an investor we do not 
manage our portfolios with an upper carbon limit in 
place. The purpose of measuring and tracking carbon 
emissions for each fund, and then at an aggregate across 
all portfolios, is to identify and manage companies with 
high emissions intensity and therefore high exposure to 
emissions-related risks like carbon pricing. 
Carbon exposure metrics 
To calculate the results presented in Table 2 we have 
followed the TCFD recommendations1. These include:
•	 Weighted Average Carbon Intensity: Portfolio’s 
exposure to carbon intensive companies, expressed in 
tonnes of CO2 equivalent emissions per $US million 
revenue (CO2e/$USm)
•	 Total Carbon Emissions: The absolute greenhouse 
gas emissions associated with a portfolio, expressed in 
tonnes of CO2e (tonnes)
•	 Carbon Footprint: Total carbon emissions for a 
portfolio normalised by portfolio market value, 
expressed in tonnes of CO2e per $AUD million 
invested (CO2e/$AUDm).
Table 2. Alphinity’s total carbon exposure across 
all funds
Scope 1 & 2
Alphinity Total
Weighted 
average carbon 
intensity
148 tonnes CO2e/
$USm revenue
Total carbon 
emissions
992 994 tonnes CO2e
Carbon footprint
69.3 CO2e/$AUDm invested
Note: Emissions data coverage of non-cash assets 99%.
Emissions management metrics 
Across our FY21 holdings we observed an assortment of 
emissions management efforts. This ranged from very 
limited disclosure to best-practice reduction targets that 
extend to upstream and downstream material scope 3 
emissions.
Across all portfolios:
•	 75% of companies2 have a carbon policy in place 
involving a clear ambition for emissions reduction, 
renewable energy use, or energy efficiency or 
reduction. 
•	 51% of companies have disclosed a net zero pledge3, 
which included anything from scope 1, 2 or 3 
emissions to lending or investment emissions.
•	 56% of companies have interim carbon or energy 
reduction targets in place with 21% of these certified 
by the Science Based Targets Initiative (SBTI) for either 
1.5°C or 2°C scenarios. 
1	 We calculate all three metrics using the portfolio holding values, carbon emissions data from MSCI (monthly scope 1 and 2 emissions) and market capitalisation and 
revenue information from Bloomberg. Supporting information for carbon footprinting and exposure metric formula can be found in TCFD’s Supplemental Guidance for 
the Financial Sector.
2	 Emissions management metrics have been calculated based on FY20/21 company disclosures, and publications from SBTI.
3	 We remain cognisant of differences between a net zero target, compared to a goal or aspiration, and whether said target, goal, or aspiration includes all material Scope 
3 emissions or not.

ALPHINITY INVESTMENT MANAGEMENT  34
Figure 8. Carbon-related metrics for our FY21 global and domestic holdings
Note: The Weighted Average Carbon Intensity (tCO2e/$M sales) measures a fund’s exposure to carbon intensive companies. It is calculated as the sum of security weight 
multiplied by the security Carbon Intensity (MSCI Monthly Data). This allows for comparisons between funds of different sizes.
Characteristics 
78
Companies held in FY21
$18B
Average market cap
Characteristics 
58
Companies held in FY21
$197B
Average market cap
Emissions management metrics (% of total companies held in FY21)
64%
have a carbon 
policy in place
44%
have a net 
zero pledge
17%
are certified as 
carbon neutral 
40%
disclose scope 3 
emissions
Emissions management metrics (% of total companies held in FY21)
90%
have a carbon 
policy in place
60%
have a net 
zero pledge
12%
are certified as 
carbon neutral 
67%
disclose scope 3 
emissions
Carbon exposure metrics (fund specific)
Australian Share 
Fund
Concentrated Share 
Fund
Sustainable Share 
Fund
Combined
Weighted average carbon 
intensity (CO2e/$USm revenue)
195
198
125
192
Carbon footprint 
(tonnes/$AUDm invested)
93
95
65
92
Carbon exposure metrics (fund specific)
Global Equity Share 
Fund
Sustainable Share 
Fund
Combined
Weighted average carbon 
intensity (CO2e/$USm revenue)
81
22
30
Carbon footprint 
(tonnes/$AUDm invested)
14
7
8
Domestic Funds
Global Funds

35  ESG AND SUSTAINABILITY REPORT 2021
Comparing the carbon exposure of our 
domestic and global funds FY21
Comparing the carbon exposure of our domestic and 
global funds there is a clear difference in outcomes across 
all metrics. 
The weighted average carbon intensities of our domestic 
funds are notably higher than for our global funds. This 
is mainly because of the higher overall exposure to the 
materials and energy sector in the domestic context 
(Figure 9), and the higher level of climate action in the 
global context. 
The materials sector, which includes large commodity 
miners like BHP and Rio Tinto, and the energy sector, 
which includes oil and gas companies like Santos and 
Woodside, generally has a higher energy intensity than 
sectors like information technology, to which the global 
funds can be more exposed.
Most of our global companies, which are notably larger by 
average market cap, had a carbon policy in place during 
FY21. Of these, 60% have made a net zero aspiration, and 
67% disclose scope 3 emissions as part of reporting. 
When it comes to carbon neutrality however, a higher 
proportion of domestic companies have disclosed on 
carbon neutral status, of some kind, compared to those 
from global companies. 
Figure 9. Sector weights across domestic and global core and sustainable strategies for all FY21 holdings.4
Domestic Core
Domestic Sustainable
Global Core
Global Sustainable
Financials
Materials
Health Care
Industrials
Consumer Discretionary
Energy
Consumer Staples
Real Estate
Communication Services
Information Technology
Utilities
4	  Weighted sum of FY21 average holding value by sector.

ALPHINITY INVESTMENT MANAGEMENT  36
ALPHINITY’S CARBON INTENSITY HAS BEEN FALLING OVER TIME
We investigated how the weighted average carbon 
intensity of our portfolios have changed over the last 
18 months relative to the benchmarks.5 
All Alphinity’s strategies have 
consistently remained below the carbon 
intensity of the respective benchmarks 
since January 2019. 
The exclusion of all fossil fuel producers (including 
those within the energy sector) from the domestic 
Alphinity Sustainable Share Fund, is the main reason 
that the emissions intensity is almost half that of its 
benchmark. The Alphinity Global Sustainable Equity 
Fund is about 85% lower than its benchmark. 
As explained previously, the greater exposure of the 
Australian market to carbon intensive sectors such as 
materials is explanation for the domestic portfolios 
showing a higher carbon intensity than the global 
portfolios. This is clear in Figures 10 and 11, where the 
average carbon intensity of the ASX300 benchmark has 
consistently been higher than the MSCI world index.
Figure 10. Domestic weighted average carbon 
intensity compared to respective benchmarks 
over 18-month period.
Alphinity Domestic Carbon Intensity* vs Benchmark
50
100
150
200
250
300
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Weighted average carbon intensity (CO2e/$USm)
Core Portfolio
Concentrated Portfolio
Sustainable Portfolio
ASX300
ASX200
Figure 11. Global weighted average carbon 
intensity compared to respective benchmarks 
over 18-month period.
Alphinity Global Carbon Intensity* vs Benchmark
0
50
100
150
200
250
300
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Weighted average carbon intensity (CO2e/$USm)
Core Portfolio
MSCI World (ex Aust)
MSCI World
Sustainable Portfolio
*Carbon intensity: Weighted average tonnes of CO2e emissions per 
$USm revenue.
Domestic carbon contributors
The top five contributors to our domestic carbon footprint (aggregate across fund holdings) are:
Emissions intensity 
(CO2e/$USm)6
Carbon 
policy
Net zero 
pledge
Interim 
targets
BHP
376
Y
Y
Y
Santos
2125
Y
Y
Y
Origin Energy
1966
Y
Y
Y
BlueScope
1178
Y
Y
Y
Qantas
953
Y
Y
N
5	 Using end-of-month weightings and monthly MSCI carbon data. Carbon emissions data coverage >97% across portfolio and benchmark companies.
6	 MSCI Data as at June 2021 for domestic and global carbon intensity values.

37  ESG AND SUSTAINABILITY REPORT 2021
All five have a net zero policy or aspiration in place, though not necessarily covering their material scope 3 emissions. 
All disclose their annual carbon emissions, along with progress to reduce their impact. 
Santos, BHP, and Rio Tinto have all also committed to a Say on Climate Vote, which will give shareholders the ability to 
vote on their Climate Change Strategies at an upcoming AGM. We are engaging with all of these companies, among 
others within our portfolios, to encourage further action to reduce their carbon footprints. 
Global carbon contributors
The top five contributors to our global carbon intensity (aggregate across fund holdings) are:
Emissions intensity 
(CO2e/$USm)6
Carbon 
policy
Net zero 
pledge
Interim 
targets
NextEra 
2483
Y
N
Y
Teck Resources
397
Y
Y
Y
Yum China
225
Y
N
N
American Tower
308
Y
N
Y
Royal DSM
125
Y
Y
Y
All companies have a carbon policy in place, with Teck 
Resources and Royal DSM pledged for net zero. Yum 
China have also committed to develop Science Based 
Targets in line with the Paris Agreement. 
As a large US utilities’ provider, NextEra is the only 
global company with carbon emissions like that of the 
domestic companies. While NextEra is one of the biggest 
renewable energy players in the world, due to revenues 
from fossil fuels it was not suitable for inclusion in the 
sustainable strategy. 
We have engaged with Yum China, Royal DSM, and 
American Tower to understand the main contributors 
to their carbon intensity. In all cases, the engagement 
focused on discussing the scope of their footprints, near-
term opportunities to reduce their emissions, and existing 
or planned longer term targets. 
CARBON INTENSITY DISTRIBUTION 
ACROSS FY21 HOLDINGS
The top five emitters for each domestic and global 
strategy contributed7 approximately: 
•	 50% of the domestic carbon intensity; and
•	 75% of the global carbon intensity.
This indicates that a few high emitting companies 
make up a large part of the global weighted 
average carbon intensity, whereas the high emitters 
are less concentrated in the domestic portfolio. 
7	 Average monthly weight of FY21 holdings and average FY21 carbon intensity from monthly MSCI data, as a proportion of the weighted sum carbon intensity of 
all holdings.

ALPHINITY INVESTMENT MANAGEMENT  38
Modern slavery and human rights 
We strongly support the United Nations Guiding 
Principles on Business and Human Rights and we expect 
our investee companies to do the same. We believe that 
instances of modern slavery exist extensively throughout 
global supply chains and require a concerted effort by all 
members of the global economy to eradicate this issue. 
With the introduction of the Australian Government’s 
Modern Slavery Act, and the increasing focus on 
modern slavery risks globally, this issue has become 
increasingly important for our business operations and 
investment practices. 
When considering the balance of risks between our 
operations and supply chains, we believe that addressing 
modern slavery and human rights issues within our 
investment practices is where we can use our leverage 
and deliver the biggest positive impact. We are also 
aware of these issues within our operations and supply 
chains and aim to manage them where relevant. 
Modern slavery risks in our operations 
and supply chain
Key facts:
•	 Organisational structure: Alphinity is part 
owned by Challenger Group through its wholly 
owned subsidiary, Fidante Partners. 
•	 Governance and oversight: The Alphinity 
Board is responsible for ensuring that Alphinity 
and its supply chains comply with Modern Slavery 
standards. 
•	 Employees: As at the end of FY21, Alphinity 
had 17 employees, all of whom are members 
of the investment team or highly qualified 
specialists in their respective fields. Other non-
investment functions, for example administration 
and distribution services, are outsourced to 
Fidante Partners.
•	 Location: All employees are based in Australia 
and operate from the company’s office in 
Sydney NSW.
•	 Revenue: The firm’s revenue is below both NSW 
and Federal legislative thresholds for mandatory 
reporting. At this point we will not make a 
voluntary report under the Modern Slavery Act 
but will still examine our business activities and 
relationships for any possible modern slavery 
exposures. 
•	 Procurement of goods and services: 
The majority of Alphinity’s procurement practices 
are related to technical or software services, 
office space and investment funds. Other 
procurement needs are outsourced to Fidante 
Partners (Figure 12).

39  ESG AND SUSTAINABILITY REPORT 2021
Figure 12. Alphinity’s operational procurement activities and mitigation strategies
Goods and Services
Alphinity procured
Service providers 
(Bloomberg, 
stockbroking 
services)
Investment
funds
Office
space
Electricity
Office staples
(paper, water)
IT equipment
Media and 
marketing
Fidante procured
Risk considerations
Alphinity procured 
Of the above goods and services, we believe office staples, like paper, and services to our 
office space, like cleaners, present the highest risk of modern slavery:
• Office Space: We have one office which is leased through global office leasing agency 
Savills. Savills have a modern slavery statement in place. 
• Office staples: We purchase Australian made office paper from Officeworks (subsidiary of 
Wesfarmers) and water from Neverfail (subsidiary of Coca Cola Amatil). Both companies 
have published modern slavery statements with very progressive action plans in place. 
The source of our investment funds also present a risk from a modern slavery perspective. 
Our funds are sourced from a range of wholesale investors, including Fidante. These include 
Sovereign and State Governments, Superannuation Funds, Investment Platforms and Insurance 
Companies. All but one, a Sovereign Wealth Fund, are based in Australia. 
Fidante procured 
Challenger Groups FY20 
Modern Slavery statement 
identified procurement of IT 
equipment as a high-risk area 
requiring further analysis. 
They have an approved Human 
Rights policy in place and are 
undertaking further work 
to assess and manage their 
material risks.
Given the relatively small number of employees and 
the nature of our business we believe there is a low 
likelihood that modern slavery or human rights violations 
are present in our operations and supply chain. However, 
during FY22 we will conduct further reviews of these 
areas and, where required, develop action plans to 
mitigate any risks we might identify.
Modern slavery risks in our investments 
As investors, we have a responsibility to ensure, to the 
greatest extent possible, that modern slavery does not 
occur in the companies in which we invest, including in 
their supply chains. 
We measure a company’s ability to manage modern 
slavery risks within their supply chains and operations 
based on governance and oversight, existing policies, and 
management strategies that enables them to identify and 
respond to incidences as they arise. 
In the last couple of years there has been a notable 
increase in modern slavery disclosure. This enhanced 
disclosure supports our efforts to complete due diligence 
in this area and supports more effective engagement 
with companies that we own. We actively encourage 
our investee companies to disclose their risks related 
to modern slavery, include case studies, outline their 
governance practices, and highlight mechanisms to 
manage issues when they arise.

ALPHINITY INVESTMENT MANAGEMENT  40
In FY21 we completed the following activities related to 
managing modern slavery in our investments:
•	 Engagement: We engaged extensively on this issue 
with companies that we held during the year.
Across all dedicated ESG meetings, 30% of 
meetings included a discussion on modern 
slavery and human rights. 
•	 Investor collaboration: We became a signatory to 
the Investors Against Slavery and Trafficking (IAST) in 
October 2020.
•	 Risk identification: We completed a risk assessment 
to identify companies in our portfolios that presented 
a high level of risk within their upstream supply chains, 
downstream value chains, or operations (see the case 
study below for outcomes and highlights).
•	 Internal awareness raising: We participated in the 
United Nations Global Compact annual forum and 
the RIAA annual conference, which both included 
presentations on modern slavery. We also organised 
an internal training session to better understand the 
implications of the Australian Modern Slavery Act.
•	 Expertise: Melissa Stewart joined the Sustainable 
Fund Compliance Committee in FY21. Melissa is a 
human rights lawyer, with past roles at the United 
Nations, NGOs, government, and private sector, and 
has specific expertise in modern slavery.
Looking ahead to FY22, we will continue to focus on 
modern slavery as a material risk to our investment 
practices, and develop specific actions plans for high-risk 
companies that we own.

41  ESG AND SUSTAINABILITY REPORT 2021
FY21 enhancement: Understanding modern slavery 
risks in our investments  
Aim of the assessment 
To understand the exposure to modern slavery and 
human rights risks across our investments, in FY21 we 
completed a risk assessment for all companies that 
were held across our domestic and global portfolios, 
addressing three key risk categories:
1.	Upstream supply chain risks: risks related to 
supply chain components, including key high-risk 
commodities, which support product development, 
manufacture, and company operations. 
2.	Downstream value chain risks: risks related to 
the application and use of a company’s products or 
services. For example, risks to the financial sector 
through lending practices. 
3.	Operational risks: risks associated with employees 
and/or contract workforce, operational locations 
including factories and distribution centres, and overall 
working conditions.
The purpose of this assessment was to identify companies 
and sectors which present the highest overall concern 
related to human rights and modern slavery. The 
outcomes are used to inform our internal management 
strategies, including focused company engagement on 
these issues, further research, and required adjustments 
to the investment case. 
Assessment overview 
This assessment was completed using an in-house 
bespoke template including starting assumptions on 
industry and location risks from the Global Slavery Index, 
and then filled out using information from company 
disclosures. 
The Global Slavery Index uses data from 2018 to identify 
regions and industries with the highest potential exposure 
to modern slavery and human rights risks considering the 
prevalence of human rights abuses, overall vulnerability 
of the population, and the extent of local Government 
response. Although the data is slightly outdated, it is 
currently the most comprehensive dataset available. 
For each company we completed the process outlined 
in Figure 13.
Figure 13. Our process to identify modern slavery risks across three key risk areas 
Upstream Supply Chain
Operations
•	 Identified the potential 
or actual supply chain 
exposure to known high 
risk commodities like 
cotton, sugarcane, rice, 
silica and cobalt
•	 Adjusted the default 
industry risk to low, 
medium or high, 
depending on additional 
exposure from high risk 
commodities 
Downstream Value Chain
•	 Considered the 
application of company 
products and services 
to aid modern slavery 
abuses and assigned a 
value chain risk level of 
low, medium or high 
•	 Identified operational 
or asset locations across 
142 high risk countries 
(Global Slavery Index)
•	 Confirmed exposure to 
contract or labour hire 
workforces
•	 Confirmed use of low-
skilled workforce
•	 Assigned an operational 
risk level as low, medium 
or high 
Note: Where we could not collect adequate information through disclosures or industry research we have assigned a temporary risk level and will aim to validate the 
exposure further through company engagement or research.

ALPHINITY INVESTMENT MANAGEMENT  42
Key insights and outcomes 
136
companies analysed across three 
key risks.
10%
of companies have more than 15 
operational assets in high risk regions.
25%
of companies present a high risk in at 
least one of the risk areas. Of these, 
82% have a modern slavery statement 
and/or policy in place.
10%
of domestic and 17% of global companies 
have a medium or high downstream value 
chain risk, an area not often addressed in 
existing Modern Slavery statements. 
63%
of companies have operational assets 
in a high risk region.
40%
of companies are exposed to potential 
operational risk through contract or 
labour hire workforces.
Figure 14. Sector level outcomes across three risk areas (combined Australian and global equities)
Energy
Communication Services
Financials
Utilities
Real Estate
Health Care
Information Technology
Materials
Industrials
Consumer Staples
Consumer Discretionary
Operational Modern Slavery Risk
Energy
Communication Services
Financials
Utilities
Real Estate
Health Care
Materials
Information Technology
Consumer Staples
Industrials
Consumer Discretionary
Supply Chain Modern Slavery Risk
Real Estate
Energy
Utilities
Health Care
Materials
Information Technology
Consumer Staples
Consumer Discretionary
Communication Services
Industrials
Financials
Value Chain Modern Slavery Risk
High Risk
Medium Risk
Low Risk
The technology (including communications) and banking 
sectors are particularly exposed to downstream value 
chain risks through the possible use of their equipment 
and financial services to aid modern slavery or human 
rights violations. For example, there have been reports that 
sophisticated technology equipment is being used for mass-
surveillance and control in the Xinjiang region in China.
Industrials, consumer discretionary, and consumer staples 
are the sectors most exposed to supply chain risks. This is 
largely due to the extensive supply chains, high reliance 
on factories in regions of concern and use of high-risk 
commodities like cocoa, fish, rice, and cotton.
Globally listed equities have a slightly elevated risk of 
human rights and modern slavery compared to Australian 
listed equities across all three risk categories. This is mainly 
because because of their global operations and scale. 
Australian equities generally produce more detailed 
disclosures on modern slavery and human rights risks and 
management than global equities. We attribute this to 
the very detailed requirements of the Australian Modern 
Slavery Act. 
Next steps 
In FY22, we will complete this assessment methodology 
by including a set of best practice management indicators 
that aim to measure the quality and effectiveness of a 
company’s response to modern slavery risks. 
Example management indicators include, having a 
supplier code of conduct in place, the use of supply chain 
audits, integration of modern slavery risk management 
at Board level, and participation in industry initiatives to 
manage complex commodity supply chains.

43  ESG AND SUSTAINABILITY REPORT 2021
CASE STUDY
Wesfarmers
GICS Sub-Industry: General Merchandise Stores	
 
Risk Exposure
Management
Supply Chain
High
High default industry risk; 
12 known high-risk 
commodities in supply chain.
In the Australian context, Wesfarmers demonstrates 
strong transparency, and remediation practices. 
The well-known Wesfarmers’ brands include Kmart, 
Target, Officeworks, and Bunnings. These brands 
procure high risk supplies from complex global 
networks such as low-cost goods, cotton garments 
or fabrics and construction materials. Wesfarmers 
is taking its responsibilities seriously, pairing 
comprehensive due diligence with transparency with 
regards to disclosing audit results and actions for 
remediation. 
Value Chain
Low
Low risk of product 
application and use related 
to modern slavery.
To address its high supply chain risks, Wesfarmers 
has introduced a Risk Management Plan that 
facilitates third-party audits, a record of remediated 
non-conformances, factory lists across Tier 1, 2 and 
3 suppliers, and an ethical sourcing program. This 
is accompanied by awareness training across both 
operations and suppliers. 
Operations
Med
No high-risk locations; 
some reliance on contract 
workforce. 
The product supply chains for all Wesfarmers’ 
divisions have been disclosed in its statement under 
the Australian Modern Slavery Act. Wesfarmers 
went further to disclose the number of supplier 
audits (2066), the number of critical breaches (386 
identified across 138 suppliers) and the remediation 
actions take (178 have action plans to remedy and 
164 have concluded remediation). 
Through engagement we are encouraging the use 
of case studies for future reporting.

ALPHINITY INVESTMENT MANAGEMENT  44
CASE STUDY
Daimler 
GICS Sub-Industry: Automobiles & Components	
Risk Exposure
Management
Supply Chain
High
High default industry risk; 5 
known high-risk commodities.
Daimler is striving for best practice in modern 
slavery due diligence regarding raw material 
procurement. A leader in EV technologies, Daimler 
procures components and services from ~60 000 
direct suppliers based across Europe, North America, 
and Asia. Among the 10,000 raw materials sourced, 
lithium, mica and cobalt are examples of critical EV 
constituents with high modern slavery-related risks.
Value Chain
Low
Low risk of product 
application and use related to 
modern slavery.
Daimler has identified and disclosed raw materials 
and services whose use, extraction or further 
processing pose potentially critical human rights 
risk. Approximately 24% of these have currently 
been assessed with the aim of assessing 70% 
by 2025. The company’s approach is to engage 
through projects in the local community, rather than 
abandon high risk regions such as the Democratic 
Republic of Congo.
Operations
Med
>9 high-risk locations; Some 
reliance on contract or low-
paid workforces in factories. 
Daimler has set itself apart on transparency 
and supplier collaboration, demonstrating 
industry leadership to address modern slavery in 
manufacturing. In 2020 it conducted 658 on-site 
audits. As these suppliers’ service others, this action 
has flow on impacts to improve the whole industry. 
It requires all suppliers to fulfil human rights due 
diligence obligations in accordance with the UN 
Guiding Principles on Business and Human Rights.

45  ESG AND SUSTAINABILITY REPORT 2021
ALPHINITY’S 
SUSTAINABLE STRATEGIES 
Through our two dedicated sustainable strategies, we aim to invest in listed 
global and Australian equities that have the capacity to make a positive impact 
on our society in areas of economic, environmental, and social development 
by contributing towards the advancement of at least one of the Sustainable 
Development Goals.
Sustainable 
Thematics
•	 Sustainable Cities 
•	 Inclusive Economies
•	 Healthy Lives
•	 Climate Action
Strongest SDG 
Alignment
Strongest Sector 
Alignment
•	 Industrials 
•	 Health Care
•	 Materials
•	 Information Technology
SDG Analysis
Completed for 
150 companies across 
domestic and global 
equities
Through our two dedicated 
sustainable strategies, we aim to 
invest in listed global and Australian 
equities that are ‘doing good’, 
by contributing towards the 
advancement of the UN’s Sustainable 
Development Goals (SDGs), and 
‘doing it well’, by having robust 
ESG management practices in place. 
The SDGs were introduced by the 
United Nations on the 1st January 
2016. These goals universally apply 
to all and aim to mobilise efforts 
to end all forms of poverty, fight 
inequalities and tackle climate 
change, while ensuring that no one 
is left behind. 
These goals were primarily developed 
for use by governments, not-for-
profit organisations, and industry 
bodies. In recent years however, the 
goals have gained significant traction 
with the investor and professional 
services community as a consistent 
language for sustainability, and to 
set clear sustainability priorities. 
We use these goals as a framework 
for defining our sustainable universe. 
This includes assessing the positive 
and negative contribution of a 
company’s products and services 
against each of the goals, and then 
determining if the company has an 
overall net positive or net negative 
alignment. 
This process does not target 
a specific goal or set of goals, 
rather the objective is to invest in 
companies that have an overall 
net positive benefit considering 
alignment across any of the goals.
Once the universe is constructed, we 
then apply the exact same disciplined 
investment philosophy of looking for 
earnings leadership in this focused 
sustainable investment universe. We 
also actively assess and manage ESG 
risks in line with our overall approach 
to ESG integration.
In 2021 we launched the Alphinity  
Global Sustainable Equity Fund. 
This strategy is consistent with the 
approach used by the domestic 
Alphinity Sustainable Share Fund 
since 2017. 
Both strategies have a similar 
Charter and Sustainable Compliance 
Committee in place to oversee 
governance, universe construction, 
and help inform company 
engagement. The committees 
include two external highly reputable 
independent experts and ensure we 
stay true to our Charters.

ALPHINITY INVESTMENT MANAGEMENT  46
Reflections from an independent Sustainable 
Compliance Committee member
Elaine Prior
Sustainable Share Fund Compliance Committee member
Role of the Sustainable Compliance Committee 
In late 2017, when Alphinity established an advisory 
committee to support its Australian Sustainable Share 
Fund (SSF), I was pleased to be asked to join the 
committee as one of two independent experts. 
At the time, I was about to retire after a decade at Citi 
Research, where I was Managing Director specialising 
in ESG research on ASX listed companies for Citi’s fund 
manager and superannuation fund clients. A major focus 
of my work since 2006 was at the intersection of climate 
change, company behaviour and investors. I was formerly 
a financial analyst covering mining and oil companies, 
a petroleum engineer working in the UK North Sea and 
Australia, and had a brief spell working on environmental 
aspects of Antarctic and Arctic tourism. 
Between 2017 and 2020, I was joined on the committee 
by Mark Lyster, an experienced sustainability advisor 
who provided a wealth of valuable insights. I’m now 
joined on the Committee by Melissa Stewart, who 
commenced the role in September 2020. A qualified 
human rights lawyer, Melissa is a recognised industry 
expert in modern slavery and human rights, and for 
more than 20 years has held roles with the United 
Nations, Australian and international Governments, 
ASX-listed companies, and not-for-profits. She has 
advised governments and corporations on modern 
slavery, human rights and responsible operations, 
investments, and supply chains. Melissa’s practical 
expertise in modern slavery and human rights adds deep 
insights into our expectations of, and engagements 
with, investee companies on these issues.
The committee was set-up following a decision by the 
Alphinity team to advance its approach to sustainability 
and relaunch an existing Responsible Investment fund 
(which used exclusions for key activities like tobacco and 
gambling) to also exclude fossil fuels and focus on finding 
and investing in companies that contribute to the themes 
of the UN’s Sustainable Development Goals (SDGs). 
These global goals aim to tackle disadvantage and the 
most pressing environmental challenges. They include 
a focus on poverty and inequality, health, sustainable 
production and consumption, biodiversity, water, waste, 
and climate change.
The role of the new Committee was firstly to assist 
Alphinity in formulating the Charter for the SSF and 
constructing the investable universe for the fund. We also 
embarked on what has becoming an evolving exercise—
assessing companies’ alignment with the SDGs.
Since its launch, the SSF has grown substantially, as 
investors increasingly seek investments that reflect their 
values as well as their financial objectives. 
In June 2021 Alphinity launched its second sustainable 
strategy called the Alphinity Global Sustainable Equity 
Fund. This strategy has been set up to mirror the SSF 
approach, and as such, I am pleased to also be a part of 
that fund’s Sustainable Compliance Committee. 
Sustainable investing 
Over the past two decades investors around the world 
have increasingly considered the Environmental, 
Social and Governance (ESG) performance of 
investee companies, and some funds also screen out

47  ESG AND SUSTAINABILITY REPORT 2021
controversial and harmful activities. While important, 
the ESG approach tends to focus mainly on how a 
company operates.
At Alphinity, in addition to considering a company’s 
ESG performance, we focus more explicitly on what a 
company does. We still apply exclusions for activities 
which are incongruent with the pursuit of the SDGs, but 
we also explicitly favour companies that help to advance 
the objectives of the SDGs. This is an evolving space for 
the global investment industry. 
Alphinity has pioneered and continues to evolve its 
approach to evaluating companies’ contributions to the 
SDGs. While we draw on external analysis by research 
providers and other external sources, we have increased 
our own in-house capacity with the appointment of 
an ESG and Sustainability Manager and analyst. Our 
proprietary framework for assessing SDG alignment 
incorporates our views of both what companies do and 
how they do it.
There are always grey areas, and companies (or their 
industries) are rarely, if ever, perfect. One role of 
the Compliance Committee is to bring a range of 
perspectives to the debate about whether a company 
fits within the Charter of the SSF and can be included in 
our investment universes. 
For example, we debated where to draw the line on 
fossil fuels and their ancillary industries, and what 
mining activities fit the spirit of the fund. We decided 
to exclude pure gold mining, but to include other 
commodities such as copper and iron ore as these 
are necessary for sustainable infrastructure and for a 
decarbonised world.
We are always prepared to revisit our decisions. We 
eliminated our exposure to gas as we became less 
convinced about the merits of ‘gas as a transition fuel’, 
and more concerned about the economics of new 
long-life gas projects. As expectations for sustainability 
performance rise, and practices and technologies 
improve, we expect more from our portfolio companies.
Our meetings with investee companies and potential 
investments allow us to explore sustainability issues in 
more depth, express our view on the importance of an 
issue, share our concerns, or encourage positive change. 
At times, Alphinity has successfully encouraged investee 
companies to increase their sustainability disclosures. 
During the past year, topics we have discussed with 
companies include climate change management 
and emissions reduction strategies, modern slavery, 
supplier relationships, heritage, social licence to 
operate, waste reduction, and mitigation of bribery 
risk. Our engagements with companies help to inform 
decisions made by Alphinity’s larger funds, as well as the 
dedicated sustainable funds.
It’s an exciting time to be a participant in the sustainable 
investment industry. Individuals and superannuation 
funds increasingly want to see their investments 
aligned with their values. This supports the evolution 
of sustainable investment products that tackle real 
world challenges and helps to encourage companies 
to operate more sustainably to remain relevant to 
investors. 
Alphinity looks forward to continuing to evolve 
its sustainable investment products, engage with 
companies to support and encourage positive change, 
and participate in collaborative initiatives that aim to 
address some of society’s major challenges.

ALPHINITY INVESTMENT MANAGEMENT  48
Using the UN Sustainable Development Goals 
to invest sustainably 
History of Alphinity’s sustainable funds 
Alphinity took over a responsible investment fund, 
previously run by Challenger, in 2010. In 2017 
following the release of the United Nations Sustainable 
Development Goals (SDGs), the fund was reshaped to 
build on the traditional approach of using negative filters 
to exclude harmful activities, to a positive approach of 
finding companies that are actually ‘doing good’. 
The idea of ‘doing good’ is based on how a company’s 
products and services aligns with the SDGs. In 2017, 
using research from the market-leading Citigroup 
ESG research team, a methodology was developed to 
consistently assess the positive and negative contribution 
of a company’s products and services against the goals. 
A Sustainable Share Fund Compliance Committee was 
also established to support the governance of the fund, 
help the investment team to work through grey-areas, 
and support company engagement. This Committee 
includes two external independent experts who oversee 
the Fund’s universe construction. 
In 2020, Alphinity added two people dedicated to ESG 
and Sustainability with the aim to enhance the overall 
assessment approach and manage the growing demand 
for ESG and sustainability insights from clients. 
In 2021, we extended our sustainable investing capacity 
by launching the Alphinity Global Sustainable Equity 
Fund. This fund utilises the same SDG assessment 
methodology and overall approach as the domestic 
Alphinity Sustainable Share Fund, including a dedicated 
Sustainable Compliance Committee with two 
independent ESG and Sustainability experts.
Figure 15. History of the Alphinity sustainable funds
2010
2021
2010
Alphinity 
launches their 
first responsible 
investment (RI) 
fund to the market  
2016
The UNSDGs come 
into force
2021
The Global 
Sustainable Equity 
Fund is launched in 
June 2021
2017
Alphinity reshapes the RI Fund to 
align with the UNSDGs. The fund 
is rebranded as the Australian 
Sustainable Share Fund
2017
The first Sustainable Compliance 
Committee is put in place 
2017
Alphinity used research by the 
market-leading Citigroup ESG 
team to develop a sustainability 
assessment methodology aligned 
with the SDGs  
2020
Alphinity appoints their 
first dedicated ESG and 
Sustainability Manager 
2020
The ESG and 
Sustainability Manager 
takes over responsibility 
for the SDG analysis 
and assessment 
methodology

49  ESG AND SUSTAINABILITY REPORT 2021
Key components of our sustainable strategies
Strategy 
components
SDG AND ESG ANALYSIS
Analysis of company ESG disclosures 
and financial information to confirm 
net positive alignment with the SDGs 
and strong ESG management practices
ACTIVE ENGAGEMENT 
Ongoing company engagement is 
important to confirm ESG & SDG aspects 
which cannot be confirmed through 
reporting, manage controversies, and 
encourage better sustainability outcomes 
EXCLUSIONS
Exclusion criteria for activities that are 
incongruent with the SDGs including; 
fossil fuel production, addictions, 
controversial weapons, predatory 
lending & pornography 
SUSTAINABLE 
COMPLIANCE COMMITEE
Sustainable Compliance Committees 
including two external experts in 
place to ensure compliance with 
the fund Charters and approve the 
sustainable universes
ALPHINITY 
INVESTMENT PROCESS
Once the sustainable universes are 
approved, the investment team 
constructs their portfolio using the 
Alphinity Investment Process

ALPHINITY INVESTMENT MANAGEMENT  50
Why the SDGs?
The SDGs were introduced by the United Nations on 
the 1st January 2016. These goals have a universal 
application and aim to mobilise efforts to end all forms 
of poverty, fight inequalities and tackle climate change, 
ensuring that no one is left behind.
These goals were primarily developed for use by 
Governments, not-for-profit organisations, and industry 
bodies. However, in recent years the goals have gained 
significant traction in the investor and professional services 
community as a consistent language for sustainability, and 
as a way to set clear sustainability priorities. 
Even with this growing interest and use, there is currently 
no investor standard as to how the goals should be 
applied. However, we still believe they are the most 
suitable framework because:
•	 they are globally recognised and supported by 
governments, industry bodies, companies, and 
communities all around the world 
•	 they cover environmental and social themes, with 
a focus on equality and reducing the potential impacts 
of climate change
•	 the framework includes a clear set of goals with 
169 individual indicators to help assess a 
company’s activities
•	 they can be easily interpreted to apply to activities, 
products, and services of listed equities. 
Sustainable investment process 
The sustainable strategies aim to invest in companies that 
have strong ESG management practices in place, align 
positively with SDGs, and have the potential to deliver 
strong financial returns (Figure 16).
1.	 SDG Analysis: Determining revenue alignment 
with the SDGs
We use the United Nations Sustainable Development 
Goals as a framework for assessing a company’s 
suitability for inclusion in our domestic or global 
sustainable universes. 
To identify the net alignment of an individual company, 
we review corporate ESG and financial disclosures, and 
use insights gained through engagement to determine 
positive and negative alignments across the various goals. 
When determining alignment with the goals, we focus on 
a company’s products and services (using the respective 
revenue splits) rather than operational ESG practices. 
We also align revenues using the SDG indicators that 
underpin the 17 high level goals, as this provides greater 
insight and clarity to the intent of the goals and therefore 
requires less interpretation. 
To reflect the strength of each segment’s alignment with 
the various goals, we also apply a materiality factor. 
We assign a materiality of low, medium, or high and 
incorporate this as a multiplier into the score. A low 
materiality uses a multiplier of 33%, medium is 66% and 
high is 100%.
An illustrated example of the process and score 
calculation is shown below (Figure 17). 
2.	 Excluded Activities 
For activities that we have determined to be incongruent 
with the SDGs, for example fossil fuel production, we 
have a number of exclusions with various revenue 
thresholds that are applied during universe construction. 
A full list can be viewed in the Funds’ Charters here.
Figure 16. Company requirements for inclusion in the domestic or global sustainable funds 
Criteria for inclusion in the sustainable funds
Net positive alignment 
with the UNSDGs
Approval by the Sustainable Compliance Committee
Strong ESG 
management practices
Attractive 
financial returns

51  ESG AND SUSTAINABILITY REPORT 2021
Figure 17. Costa Group SDG analysis example 
Costa Group is Australia’s leading grower, packer and marketer of premium quality fresh fruit and vegetables. 
Through its products, it delivers strong social benefits for Australian and international communities aligned with 
SDG2, SDG3 and SDG10. The SDG10 alignment is only related to its farms and logistics segment and specifically 
benefits small scale growers and producers who sell their products through Costa’s markets. 
Growing and selling fruit and vegetables requires water use and some packaging. Although these areas are well 
managed by the company, these impacts have been represented through the negative alignment with SDG6 and 
SDG12 respectively. 
Costa Group have a final net positive SDG alignment score of 106%.
Segment
(revenue %) 
SDG alignment​
SDG​
Indicator​
Materiality​
Score ​
Result ​
Costa Group products & services
Produce 
(76%)
+
2.1 & 2.2 End hunger, support access to 
safe and nutritious food 
(High)
76% x 100% = 76%​
76% x 66% = 50%
126% - 75%
= 51%​
Net Positive 
3.4 Reduce mortality rates
[healthy eating]
(Medium) 
-
12.5 reduce waste and resource use 
[packaging/plastics]
(Low) 
-76% x 33% = -25%​
-76% x 66% = -50%
6.1 & 6.4 achieve water efficiency 
[embodied water use]
(Medium)
Costa
Farms and 
Logistics
(13%) +
2.1 & 2.2 End hunger and access to safe 
and nutritious food ​
(High)
13% x100% = 13%​
13% x 66% = 9%​
13% x 100% = 13% 
13% + 9%
+ 13%
= 35%​
Net Positive
3.4 Reduce mortality rates [health eating]
(Medium) 
10.1 & 10.2 inclusion for all [access
to individual growers and sellers to 
their markets]
(High)
International
(12%) +
2.1 & 2.2 End hunger, support access to 
safe and nutritious food 
(High)​
12% x 100% = 12%​
12% + 8%
= 20%​
Net Positive
3.4 Reduce mortality rates 
[healthy eating]​
(Medium)
12% x 66% = 8%​
3.	 Assessing ESG management practices 
We assess a company’s operational ESG management 
practices in line with our ESG integration process 
described on page 13. 
The degree of risk (both threats and opportunities) 
related to ESG is considered on an ongoing basis, and 
where relevant can influence a decision to include or 
exclude a company from the sustainable funds’ investible 
universes. These factors may also influence portfolio 
construction and overall investment decisions. 
4.	 Approval from the relevant Sustainable 
Compliance Committee
The two Sustainable Compliance Committees (Figure 
18) are responsible for overseeing the SDG and ESG 
company analysis, and approving the domestic and global 
sustainable universes.
Both committees include the relevant two Portfolio 
Managers and the same two external experts.
The committees are supported by the Alphinity ESG and 
Sustainability team, Jessica and Moana, who typically 
chair the committee meetings and provide research and 
inputs to assist the committee in their role. 
Elaine Prior and Melissa Stewart both have extensive 
expertise in ESG and sustainability and along with 
their role to approve the sustainable universes, they 
also provide ongoing advice on company engagement 
priorities, industry trends, global policy changes, and key 
issues worth further research and explorations. 
Appendix 3 includes further details on Elaine and 
Melissa’s background and experience.

ALPHINITY INVESTMENT MANAGEMENT  52
Figure 18. Sustainable Compliance Committees
Australian Sustainable Share Fund Compliance Committee
Global Sustainable Equity Fund Compliance Committee
Australian Portfolio 
Managers
Independent 
experts
Global Portfolio 
Managers
Bruce Smith
Principal, Portfolio Manager
Elaine Prior
 ESG expert
Mary Manning
Global Portfolio Manager
Stephane Andre
 Principal, Portfolio Manager
Melissa Stewart
Human rights expert
Jeff Thomson
Global Portfolio Manager
Supported  by the ESG and Sustainability team
Alphinity ESG and 
Sustainability team
Jessica and Moana support the 
committees by providing research, 
structuring agendas, and tracking 
actions and outcomes.
Jessica Cairns
ESG & Sustainability Manager
Moana Nottage
ESG & Sustainability Analyst
5.	 Construct a balanced portfolio 
Once companies have been approved by the respective 
Sustainable Compliance Committee for the universe, we 
apply the same disciplined investment philosophy of all 
other Alphinity funds: looking for earnings leadership 
(Figure 19). 
Ultimately stock selection for inclusion in the portfolio is 
made from the defined universe by the investment team 
applying the Alphinity investment process. All stocks in 
the portfolios will have a net positive SDG alignment and 
strong ESG practices because this is a requirement of the 
sustainable universe construction. 
Figure 19. Sustainable investment process
Starting Universe
Refined Universe 
Sustainable Investable Universe
Portfolio 
Exclusions, liquidity filters etc
SDG analysis
Alphinity stock selection process 
Company engagement and ESG analysis
Sustainable Compliance 
Committee
Investment Team

53  ESG AND SUSTAINABILITY REPORT 2021
FY21 SDG alignment outcomes 
Since taking the SDG analysis in-house in 2020, we 
have completed the analysis process for more than 150 
companies.8 This includes all 92 companies that were 
held across our sustainable strategies during FY21, 
companies which were assessed for broader research and 
comparative purposes, as well as best research ideas from 
the investment team. 
The SDG analysis is completed by the internal ESG and 
Sustainability team, in consultation with the respective 
investment analyst, and is vetted by the appropriate 
Sustainability Committee. This analysis is informed by 
company disclosures (financial and ESG documents), 
insights gained through company engagement, and 
independent research. 
A range of insights are presented on the following pages 
of this report. The results represent the SDG alignment 
of companies held during FY21 across our sustainable 
strategies and highlights the key similarities and 
differences between the domestic and global funds.9
Naturally, the SDG contribution of a portfolio depends 
on the company specific SDG positive and negative 
alignment, but also portfolio construction aspects such 
as sector exposures. We have therefore analysed the SDG 
contribution of our portfolio’s using four key methodologies:
Positive 
SDG 
alignment
Company revenues aligning positively 
to SDGs using the SDG analysis 
methodology described previously.
Negative 
SDG 
alignment
Company revenues aligning negatively 
to SDGs using the SDG analysis 
methodology described previously.
Net SDG 
alignment 
Sum of all positive and negative 
SDG alignments to generate net 
scores. See the Costa Group worked 
example above.
Sector 
alignment 
SDG contribution of companies held in 
the in the portfolio by sector, calculated 
using average holding weights and 
company SDG alignment.
All holdings and respective SDG alignments are available 
in Appendix 4. 
Internally, the SDG analysis and various outcomes 
(for example, the graphical representation shown as 
Figure 20), are used to:
•	 confirm a company’s suitability for inclusion in the 
appropriate sustainable universe; 
•	 inform discussion in the Sustainable Compliance 
Committee meetings; and
•	 identify company engagement objectives and priorities, 
especially where negative alignment is identified.
Figure 20. Example portfolio level SDG analysis
-100%
0%
100%
200%
300%
400%
SDG Score
Example portfolio companies
Net alignment score
8	 Analysis completed for 70 domestic and 80 global companies in FY21.
9	 Representative domestic and global sustainable portfolios created for FY21 holdings using an average of end-of-month weights given the variance in company holdings 
across the year.

ALPHINITY INVESTMENT MANAGEMENT  54
Figure 21. Positive SDG contribution and sustainable thematics
The overall positive SDG alignment of the domestic and global sustainable strategies covering all companies held during 
FY21. The figure highlights ten SDGs and four key sustainability themes that our portfolios have contributed to most 
strongly over the year. Page 59 contains case studies for select companies included in the graphic below.
Industry 
alignment
Industrials, information 
technology, materials, 
resources
Financial services, 
information technology, 
communications, education
Agriculture, consumer 
staples, consumer 
discretionary, health care
Utilities, energy, resources, 
industrials, agriculture
Relevant 
SDGs
Portfolio 
weight  
contributing 
positively 
to relevant 
SDGs
Domestic
58%
37%
7%
32%
40%
17%
15%
22%
18%
18%
Global
67%
13%
13%
10%
36%
19%
15%
34%
12%
6%
Example 
companies 
held in FY21
Note: The portfolio weighted contribution is calculated using the average monthly holding weights for each company across the year.
Strongest net alignment to the SDGs
Across the domestic and global sustainable funds, there 
are four SDGs where the companies we held in FY21 had 
the highest overall contribution: 
1.	SDG3 Good health and well-being: Ensure healthy 
lives and promote well-being for all at all ages
2.	SDG8 Decent work and economic growth: Promote 
sustained, inclusive and sustainable economic growth, 
full and productive employment and decent work for all
3.	SDG9 Industry, innovation, and infrastructure: 
Build resilient infrastructure, promote inclusive and 
sustainable industrialisation and foster innovation
4.	SDG11 Sustainable cities and communities: Make 
cities and human settlements inclusive, safe, resilient, 
and sustainable
Figure 22 highlights the total net alignment across the 
SDGs for our two sustainable strategies: the Alphinity 
Sustainable Share Fund (Domestic) and the Alphinity 
Global Sustainable Equity Fund (Global). 
Net alignment accounts for the positive and negative 
contributions towards each goal. 
98% of companies held during FY21 
positively align to at least one of these 
four goals.
Sustainable Cities
Companies that transform 
our cities and deliver the 
infrastructure critical for a 
sustainable future.
Inclusive Economies
Companies that reduce 
poverty and improve overall 
inclusivity of economies 
through access to information, 
services and finance.
Healthy Lives 
Companies that support 
the healthy lives of 
communities and provide 
healthcare systems that are 
fair and equal.
Climate Action
Companies that proactively 
reduce carbon emissions 
and address the impacts of 
climate change.

55  ESG AND SUSTAINABILITY REPORT 2021
Figure 22. Key observations of Australian and global net alignment to the SDGs
Taking into account the total net SDG alignment for all FY21 holdings for each fund, the domestic companies 
contribute more to SDG1 and SDG11 while the global companies have a stronger alignment to SDG2 and SDG8. 
Both SDG3 and SDG9 demonstrate consistent exposure across both funds. 
Domestic
Many companies across sectors support SDG9, 
from the development of sustainable and resilient 
infrastructure, to innovation and research, to 
investment in clean, digital and efficient industrial 
processes. 
Good health and well-being is a part of many 
company strategies, from food systems and 
nutrition, fitness and insurance services to 
health care services.
Key similarities in SDG alignment between domestic and global sustainable strategies:
Domestic
3
7
8
9
10
11
1
2
3
4
7
8
9
10
11
1
A result of high exposure to 
financials in the portfolio such 
as retail banks and insurance
Second highest alignment in the 
domestic portfolio reflects companies 
in the materials and industrial sectors 
that contribute to sustainable cities
Second highest alignment in the global portfolio 
captures multinational businesses that 
contribute to economic productivity and 
stronger markets and financial institutions. 
Represents companies that 
contribute to food security, 
sustainable food systems, 
and access to nutrition.  
Companies support sustainable cities and 
communities through more efficient resources, 
sustainable infrastructure and materials, reduced 
pollution and sustainable transport systems. 
Economic productivity and growth is a fundamental 
benefit of technology companies, diversified 
financials, investment managers, and companies 
that participate in e-commerce or logistics.
Global

ALPHINITY INVESTMENT MANAGEMENT  56
Positive SDG alignment 
Domestic 
•	 Of the domestic holdings, strong alignment to SDG9 
and SDG11 is largely a result of exposure to companies 
engaged in the materials and industrials sectors offering 
services in sustainable infrastructure and development 
(for example, Fortescue Metals Group, Lifestyle 
Communities, Reliance Worldwide, Fluence, and Lynas). 
•	 We also have strong exposure to the health care sector 
which is reflected through our alignment to SDG3. 
Companies which contribute towards this alignment 
include CSL, Sonic Healthcare, Ramsay Healthcare and 
Fisher & Paykel Healthcare.
•	 The alignment to SDG8 reflects technological innovators 
and diversified financials or industrials that support 
capital flows through the economy (for example, 
Transurban, Qantas and National Australia Bank). 
•	 The alignment to SDG1 also reflects our positions 
in Australian banks and diversified financials such as 
Macquarie and QBE insurance. 
Global 
•	 The global holdings for FY21 also strongly align to 
SDG9 and SDG11. Like domestic, this is mainly due 
to the strong exposure to industrials, however, is also 
supported by companies in the information technology 
sector. Companies that align strongly here include 
Schneider Electric, Trane Technologies, ASML, Nvidia 
and Infineon.
•	 The strong alignment with SDG8 is largely due to the 
high exposure to multinational technology and industrial 
innovators like Microsoft, Google, and Nvidia.
•	 Across the global holdings, we have a slightly lower 
sector exposure to health care compared to domestic. 
However, in contrast, the strong SDG3 alignment is 
further driven by sectors outside of health care. For 
example, AIA, which is a financial stock, provides life 
and health insurance; HelloFresh and Nomad foods, 
which are consumer stocks, support healthy eating; 
and Nike, another consumer stock, improves fitness 
and well-being. 
•	 The alignment to SDG2 is due to our exposure to 
companies that support food availability (for example, 
Nomad Foods, DSM, and HelloFresh). 
Negative SDG Alignment
When assessing company revenue exposure across the 
SDGs, it is important to extend the positive lens and 
acknowledge the negative alignment as well. 
Most companies have some degree of negative 
alignment. If that alignment is not balanced by stronger 
positive alignment, resulting in a net negative score, the 
company would not be accepted into the sustainable 
universe.
There are three SDGs where negative alignment is most 
common: 
•	 SDG6 Clean water and sanitation: Products which 
use signficant amounts of water in production (for 
example, rare earth production).
•	 SDG12 Responsible consumption and production: 
Products or services which encourage excess 
consumption and waste (for example, sale of 
consumable products such as fashion items, waste 
generated from construction or packaging).
•	 SDG13 Climate action: Products or services which 
have a significant:
	
– upstream emissions footprint (for example, data 
centres and energy intensive industries); or
	
– downstream footprint (high-emitting products such 
as heavy vehicles, mined commodies, or airlines).
Generally where we identify negative SDG alignment, 
we seek to identify strong operational management 
measures and commitments that may offset the negative 
impact over time. For example, when companies 
exhibit negative alignment to SDG13, we review any 
relevant climate change disclosures, seek to engage, 
and preferably confirm clear commitments to reduce 
emissions in line with the Paris Agreement. 
Where a company does not have clear commitments in 
place to mitigate the negative impact, we will consider 
the implications on a case by case basis with the 
Sustainable Compliance Committee. Depending on the 
situation the result might be to exclude the company 
from the relevant universe, or continue engagement 
to encourage better management and keep track of 
developments in the space.

57  ESG AND SUSTAINABILITY REPORT 2021
Gaps in SDG alignment
Across the companies held in FY21, there are 
certain SDGs where there are gaps in our alignment. 
These include: 
•	 SDG5 Gender equality: Achieve gender equality and 
empower all women and girls
•	 SDG16 Peace, justice, and strong institutions: 
Promote peaceful and inclusive societies for sustainable 
development
•	 SDG17 Partnerships for the goals: Strengthen the 
means of implementation and revitalise the Global 
Partnership for Sustainable Development
Across our holdings there are many companies taking 
part in valuable initiatives that support the SDGs listed 
above, however, these are generally characterised as 
operational ESG management measures (for example, 
workforce diversity and inclusion) and are therefore not 
measured through the SDG analysis. 
Of our FY21 holdings, one company aligned from a 
product and service perspective to SDG5: Nike due to 
its range of clothing and equipment specifically targeted 
at women’s equality. Two companies are aligned with 
SDG17: Google for facilitating information sharing 
related to sustainable development; and AIA Group 
supporting financial security in developing markets.
The limited alignment with SDG16 is because the goal 
supports peace, justice, and strong institutions which 
most listed companies would find difficult to address. 
This goal is more relevant to regulatory bodies and 
organisational collaboration rather than holding a clear 
alignment to company revenues.
Sector insights
Each sector has a role to play in creating sustainable solutions that align with the SDGs. 
Figure 23. Sector sustainability benefits
Materials, Industrials & 
Real Estate 
develop our urban communities and 
transport systems
Utilities & Energy 
provide sustainable energy, waste, 
and water systems for a growing 
population
Financials & Health Care
support access, opportunity and 
positive health outcomes
Materials, Industrials, 
Consumer Staples & 
Discretionary
halt biodiversity loss and 
ecosystem harm
Information Technology & 
Communications 
enable digital connections and 
pathways to education
Consumer Staples, 
Discretionary & Industrials 
feed our world with sustainable 
agricultural practices and global 
food systems

ALPHINITY INVESTMENT MANAGEMENT  58
Sector contributions to FY21 SDG outcomes
Overall, there are four sectors which have contributed 
most significantly to our FY21 SDG alignment outcomes 
across both funds: Industrials, Health Care, Financials, 
and Information Technology.
The SDG contribution of sectors is largely influenced by 
two factors, the SDG alignment of companies held in 
the portfolio and the sector weights of the funds. Figure 
24 illustrates how the sector SDG contributions differ by 
strategy with:
•	 Domestic holdings in the materials, financials, 
industrials and health care sectors providing the 
highest contribution to the SDG outcomes; while
•	 Global holdings in the industrials, information 
technology, health care and consumer discretionary 
sectors show highest contribution to the SDG 
outcomes.
Notably, Figure 24 also demonstrates how strongly 
companies in certain sectors align to the SDGs. For 
example, the financials sector made up a large part 
of the domestic Alphinity Sustainable Share Fund 
throughout FY21. However, because these companies 
generally have a lower overall SDG alignment this sector 
represents a lower SDG contribution compared to 
others. Conversely, the SDG contribution of industrials is 
strong across both strategies as companies in the sector 
demonstrate a higher overall SDG alignment. 
Figure 24. Comparison of SDG contribution by 
sector to relative portfolio exposures. 
0%
20%
40%
60%
80%
100%
Domestic
Global
Net SDG alignment
Sector exposure 
(portfolio weight)
Net SDG alignment
Sector exposure 
(portfolio weight)
Domestic
Global
Materials
Financials
Industrials
Health Care
Information Technology
Utilities
Consumer Discretionary
Real Estate
Communication Services
Consumer Staples
Note: Average end-of-month weights used to calculate sector exposures.
Average sector alignment 
Taking into account our observations of company 
alignment differing in certain sectors, we show the 
average net SDG alignment10 by sector in Figure 
25. Once the sector exposure from the portfolio is 
removed, the companies with the strongest SDG 
alignment generally are from the communication 
services, utilities, industrials and health care industries. 
In line with our previous observations, on average the 
financial companies have a weaker alignment than 
most other sectors. Meanwhile, the average industrial 
company displays a stronger overall contribution to the 
SDGs with notable alignment to SDG9 and SDG11. 
This analysis only uses data from companies 
we have owned throughout the period, so it is 
not representative of the sectors more broadly. 
Nonetheless, it provides a valuable indication of 
which sectors may contribute more strongly towards 
the SDGs than others. 
Figure 25. Average net SDG alignment by sector 
and the number of companies held during FY21. 
Domestic
-100%
0%
100%
200%
300%
Utilities            2
Industrials            8
Health Care            7
Real Estate            3
Materials          10
Consumer Discretionary            6
Information Technology            7
Financials          12
Communication Services             2
Consumer Staples             2
Average company SDG alignment per sector
Companies 
held in FY21
Global
-100%
0%
100%
200%
300%
Communication Services              1
Industrials             6
Health Care             4
Information Technology                7
Consumer Discretionary             6
Consumer Staples             1
Real Estate            1
Materials            2
Financials             5
Average company SDG alignment per sector
Companies 
held in FY21
10	 Net SDG alignment divided by the number of companies held in each sector.

59  ESG AND SUSTAINABILITY REPORT 2021
Domestic and global sustainable company examples
Sustainable Cities: Companies that transform 
our cities and deliver the infrastructure critical 
for a sustainable future
Global Equities
Domestic Equities
Ball Corporation: Infinitely recyclable 
aluminium for a sustainable beverage 
package
Positive alignment
Negative alignment
N/A
Lifestyle Communities: Supporting 
affordable housing and community 
living for an aging population
Positive alignment
Negative alignment
N/A
An American company enabling a truly circular economy, Ball Corp 
leads the way in the innovative recycling of aluminum packaging. 
The aluminum that contains your beverage, personal care and 
household products today are close to 100% recycled. The metal 
holds the specialist properties to remain in the recycling system 
infinitely. Sourcing primary aluminum, on the other hand, is more 
energy-intensive and comes at a substantially higher cost. As such, 
aluminium is the superior material to recycle in contrast to glass and 
plastic and demonstrates clear sustainability benefit and alignment 
to SDG9 and SDG12. 
Ball was the first can maker to have had its GHG reduction plan 
approved by the SBTI in line with a 1.5-degree scenario, committing 
to 100% of North American operations to be addressed by 
renewable energy projects.
Lifestyle Communities is a business for purpose. Its mission is 
to enable working, semi-retired and retired people to maintain 
independence, build social connections and feel content to 
downsise at an affordable price – a differentiated model to the 
stock standard retirement village. 
The company is responsible for owning and operating these 
residential communities for Australians over 50 (SDG9 and 
SDG11). The focus is on health and wellness, providing facilities 
such as club houses, pools, gardens and outdoor recreation 
that homeowners can enjoy and socialise over. The mental and 
physical developments from such participation are key to a 
strong, happy and healthy aging population (SDG3). 
Infineon: Microelectronics creating an 
efficient world in the digital age
Positive alignment
Negative alignment
N/A
Iluka: Heavy mineral sands provide 
resources critical to our modern economy
Positive alignment
Negative alignment
Infineon view global challenges as the motivation to develop 
innovative digital products and systems that make our world safer 
and greener world. Primarily a semiconductor business, Infineon are 
addressing key market trends such as energy efficiency, mobility, the 
Internet of Things and Big Data (SDG7 and SDG9). The products 
also enable the integration of renewable energy sources such as 
wind and solar into our grids, and the industrial power controls 
support charging stations for electric vehicles.
These make our technology driven systems more energy efficient 
and thus reduce power-loss in network systems. As our population 
and urban environments grow, this is paramount in our journey to 
net zero where avoiding energy use should be the priority over the 
purchase of carbon offsets. 
Infineon’s ESG management practices are well established within 
the business, and have committed to net zero by 2030 with an 
interim target to cut emissions by 70% by 2025 (2019 baseline). 
A global producer of zircon and rutile, Iluka is increasingly 
producing Rare Earth elements. These products are used in 
a growing array of applications around the world including 
ceramics, pigments, coatings and wind turbines and new energy 
(SDG9 and SDG11). 
Zircon-containing products on buildings address the concerning 
heat island effects in our cities, while titanium enhances the 
durability and lifetime of our urban settings. 
In terms of responsible mining, Iluka works with communities 
to improve regional developments and protect cultural heritage 
and the environment. The company’s Aboriginal employment has 
increased to 7% across the group, with close to 30% at some 
operations in South Australia. Focusing on maximising the reuse 
of water in the mining process (SDG6) Iluka reports on its water 
footprint and water recycling. Waste and water measurement 
metrics are to be released in 2021.

ALPHINITY INVESTMENT MANAGEMENT  60
Inclusive Economies: Companies that reduce poverty 
and improve the overall inclusivity of economies 
through access to information, services and finance
Global Equities
Domestic Equities
MercadoLibre: Democratising 
consumption and finance in Latin America
Positive alignment
Negative alignment
Liberty Financial Group: Access to 
finance through responsible lending
Positive alignment
Negative alignment
N/A
Born with the purpose to democratise commerce and equalise the 
opportunities between large companies and small entrepreneurs, 
MercadoLibre (MELI) has built the largest e-commerce and 
payments eco-system in Latin America. 
By facilitating e-commerce and fintech services, MELI is reducing 
poverty and supporting digital and financial inclusion for individuals 
and small businesses in a somewhat underserved market (SDG1, 
SDG8 and SDG10).
MELI has a number of initiatives in place to manage the negative 
consumption impacts of the e-commerce business (SDG11 and 
SDG12). The company uses 100% FSC certified cardboard made 
up of at least 40% recycled content and committed in 2021 to 
purchase 100% renewable energy for its largest distribution centres 
in Brazil and Mexico. 
It is clear that the financial inclusion and social benefits MELI provides 
for small scale sellers and the Latin American economy, outweigh the 
negative impacts of packaging and waste inherent in such a business. 
Liberty Financial Group are advocating that individuals and 
small businesses can access capital in a responsible manner, yet 
through a quick turnaround time. 
A leading non-bank lender, Liberty provide home, car, business, 
and personal finance paired with free-thinking solutions at 
competitive prices to provide customers with greater choice in 
the financials space.
Its innovative technology and data-driven approach to financing 
supports quicker turn-around times and sustainable access to 
finance for members of the community who might otherwise 
struggle to access these services (SDG1, SDG8 and SDG10). 
Liberty is the first financial organisation in Australia to be 
certified by B Corporation. This certification demonstrates it is 
a business that meets the highest standards of verified social 
and environmental performance, public transparency, and legal 
accountability to balance profit and purpose. 
Microsoft: Global technology leader 
supporting business and education
Positive alignment
Negative alignment
Qantas: Facilitating the safe migration 
of people in Australia and globally
Positive alignment
Negative alignment
Microsoft’s cloud-based software solutions have transformed the 
way businesses, education providers, and individuals communicate 
and approach work. These solutions improve access to education, 
support more productive economies, and reduce inequalities of 
outcome for people in remote or disadvantaged parts of our society 
(SDG8, SDG10, and SDG4).
Microsoft are well-known as a leader in ESG management. It has 
a strong focus on environmental and social sustainability and has 
been certified as carbon neutral since 2012 (with the use of offsets). 
Microsoft has pledged to be carbon negative by 2030, but due to 
the power required at its datacentres the company has a relatively 
high direct carbon footprint (SDG13). To manage this, it has 
committed to 100% renewable energy by 2025 and will invest 
$1 billion over the next four years to help increase the development 
of carbon reduction and removal technologies. 
Qantas is one of Australia’s oldest brands. Efficient and 
sustainable air travel supports resilient economies (SDG9 and 
SDG8), mobility and connection of people, access to global 
opportunity (SDG10), and personal health and well-being.
Qantas are playing a key role in ensuring that the future of air 
travel can fit within a low carbon world. It has made a net zero 
pledge, committed to invest $50 million over the next 10 years 
towards the development of a viable sustainable aviation fuel 
industry in Australia, and are actively upgrading the fleet to more 
energy efficient models. 
Qantas also has a focus on reducing waste. In 2019, it operated 
the first ever commercial no waste to landfill flight. Through 
the COVID-19 pandemic Qantas have been proactively working 
with the Australian Government to provide ongoing support to 
employees who are unable to work during this time.

61  ESG AND SUSTAINABILITY REPORT 2021
Healthy Lives: Companies that support the healthy 
lives of communities and provide healthcare systems 
that are fair and equal
Global Equities
Domestic Equities
DSM: Driving a sustainable future 
through science and research
Positive alignment
Negative alignment
Cochlear: Connecting hearing experts 
around the world and leveraging customer 
referrals to improve health outcomes 
Positive alignment
Negative alignment
N/A
DSM is a global purpose-led, science-based company researching 
and investing in solutions tackling global challenges such as climate 
change, food quality and shortages and restoring a biobased circular 
economy. It has three core businesses: nutrition and health (SDG2 
and SDG3), climate and energy solutions (SDG9 and SDG7), and 
resources and circularity Solutions (SDG12).
The nutrition and health business are the largest by revenue and 
develops vitamins, nutrition supplements, and innovative animal feed 
and nutrition solutions to reduce the negative impacts of farming. 
This includes an algae-based Omega 3 for sustainable aquaculture 
practices (SDG14)
Vitamin production requires fermentation and as such, DSMs 
operational carbon emissions are relatively high (SDG13).
Cochlear are the global leader in implantable hearing solutions 
and changing, through technology and industry collaborations, 
the way we understand and treat hearing loss. It has provided 
more than 600,000 implantable devices, helping people of all 
ages to lead full and active lives (SDG3, SDG4 and SDG10) 
including those in developing countries. 
Leaning on the front foot in terms of customer advocacy, 
Cochlear have changed the way people view hearing implants. 
Employing the reach and engagement of social media, the 
company has joined people with hearing loss and worldwide 
hearing care experts. This has instigated a positive referral 
channel that has made a substantial change in many lives. 
AIA: Leading health insurer in Asia 
supporting well-being and financial security
Positive alignment
Negative alignment
N/A
Sonic Healthcare: Supporting the 
fight against COVID-19 with a 
leading patient and clinician focus
Positive alignment
Negative alignment
AIA is a leading life and health insurance provider operating in the 
APAC region, focused on enabling healthier, longer, and better 
lives. The group operates in 18 countries including China, Thailand, 
Singapore and Malaysia, with 38 million individual policies and 
16 million group insurance members. 
AIA aims to address the significant health protection gap within the 
emerging Asian middle classes by offering innovative, affordable, 
and reliable life and health protection products (SDG1, SDG3 and 
SDG17). This includes providing health insurance as well as a range 
of complementary programs to encourage more healthy living. 
For example, the AIA Vitality program promotes improved health 
outcomes for its customers, while also benefiting customers 
through lower costs of insurance. 
Sonic is one of the world’s leading healthcare providers (SDG3 
and SDG9) with operations around the world that specialise in 
pathology/clinical laboratory, primary care and diagnostic imaging 
services to clinicians and patients. 
Since the COVID-19 pandemic began, Sonic’s role in community 
health services has become imperative to the fight against the 
disease. Around 60 of Sonic’s laboratories worldwide perform 
tests to detect the virus from a simple, non-invasive nose and 
throat swab. 
These tests have been central to the effective control of 
COVID-19 outbreaks by confirming the diagnosis and prevalence 
of the disease. This also provides the data to determine infection 
rates and for use in epidemiological studies. As COVID-19 strains 
continue to evolve, these testing services are key to mitigating 
severe cases and fatalities, protect the vulnerable and the world 
to ease restrictions in a safe manner.

ALPHINITY INVESTMENT MANAGEMENT  62
Climate Action: Companies that proactively 
reduce carbon emissions and address the impacts 
of climate change
Global Equities
Domestic Equities
Vestas Wind Systems: The world’s 
largest wind turbine maker
Positive alignment
Negative alignment
N/A
Fortescue Metal Groups: Supporting 
sustainable infrastructure and evolving future 
clean technologies 
Positive alignment
Negative alignment
A Danish company addressing the urgency in the sustainability 
debate, the Vestas vision is to enable the low carbon transition 
through the design, manufacture and installation of wind turbines. 
Riding the clean energy wave and benefitting from the booming 
demand for clean energy solutions, Vestas have installed 117GW of 
turbines in 81 countries (SDG7, SDG9, SDG11, and SDG13).
Not just a sustainable creator, Vestas was also the first renewable 
energy manufacturer to have a climate target confirmed in line with 
the 1.5 degree scenario by SBTI. Vestas have taken responsibility over 
its own operations and committed to net zero emissions by 2030, 
without the use of offsets. This journey is well underway, with a 
substantial procurement of renewable energy made last year paired 
with the integration of hybrid and electric vehicles in the fleet. 
Vestas company vision and strategy is focused on creating a low 
carbon and sustainable future. it has a strong operational sustainability 
strategy and have committed to net zero emissions by 2030.
Fortescue Metals group (FMG) is an Australian based iron ore 
producer with market leading ESG management practices in 
place. Through the production of iron ore, which is used to make 
steel, it is supporting the development of more sustainable cities, 
new industries and technology, and construction of renewable 
energy projects (SDG9 and SDG11).
Recycled steel only makes up about a third of global steel needs, 
so iron ore mining and steel production in blast furnaces is 
still essential to make the rest of the steel required to build a 
sustainable future. 
FMG has committed to net zero operations by 2030 and is 
currently investing 10% of its earnings in low carbon solutions 
like green ammonia and green hydrogen through its newly 
formed subsidiary – Fortescue Future Industries (SDG7). 
Embodied water use and scope 3 emissions continue to be a 
focus from an ESG perspective (SDG13 and SDG6).
Schneider Electric: Digital products that 
support new energy systems 
Positive alignment
 
Negative alignment
N/A
Fluence Corporation: Equal access to 
drinking water and reducing marine pollution
Positive alignment
Negative alignment
N/A
Schneider is a global leader in energy management and industrial 
automation. It provides a range of services that support the low 
carbon transition including, solar and energy storage, microgrids, 
software supporting energy efficiency, and sustainability 
consultancy (SDG7, SDG9, SDG11 and SDG13). Schneider is 
driving expansion into Southeast Asia and has since established a 
strong business foundation in Singapore. 
The company has ESG management strategies, covering six thematic 
commitments which include aspects such as climate change, resource 
use, trust and equal opportunity. All are underpinned by short-term 
targets, quarterly reporting and strong governance tied to employee 
compensation for close to 60 000 employees. 
By 2025 Schneider have set targets for 80% of revenues to be 
from green activities, 1000 top suppliers to reduce their operational 
emissions by 50%, 100% of packaging to be plastic-free, 1 million 
underprivileged people to be trained in energy management, and 
the achievement of gender equality across all levels of the business.
Around the world, 80% of wastewater is released into oceans without 
treatment and 75% of populations experience water shortages.
Fluence provides water solutions across 70 countries including 
Africa, South East Asia and South America. It makes affordable, 
energy-efficient, containerised, decentralised wastewater 
treatment and desalination systems which provide remote 
communities with limited access to water, access to potable and 
non-potable water systems (SDG6). This supports sustainable cities 
and greater climate resilience in periods of extreme weather and 
drought (SDG13 and SDG11).
Fluence treats 58.8 billion gallons (222.7 billion litres) of 
wastewater annually, and removes dangerous contaminants from 
the environment (SDG6). Its systems are also generally more 
energy efficiency than competitors (SDG11). For example, the 
advanced MABR wastewater treatment technology has potential 
savings of more than 1 million GWh of electricity, the equivalent 
of more than 700 million metric tons of carbon dioxide.

63  ESG AND SUSTAINABILITY REPORT 2021
APPENDIX
Appendix 1 FY21 ESG-centred engagements 
Domestic Equities 
Company
Timing 
ESG/Sustainability focus area
Rio Tinto 
Ongoing
Heritage, social licence 
Qantas
Aug-20
Workforce 
QBE Insurance
Sept-20
CEO resignation
Cleanaway
Sept-20
Governance, culture
Oz Minerals 
Sept-20
Emissions, heritage 
Fisher & Paykel 
Sept-20
Animal testing, workforce 
Transurban 
Sept-20
Governance 
BlueScope Steel
Sept-20
Modern slavery 
BlueScope Steel
Sept-20
Climate change, modern slavery 
Wesfarmers 
Oct-20
Strategy, modern slavery 
Steadfast
Oct-20
Governance 
Cleanaway
Nov-20
Governance, culture
Oz Minerals 
Nov-20
Emissions
ANZ
Nov-20
Climate change 
Megaport
Dec-20
Governance, workforce, disclosure
Santos
Dec-20
Emissions 
CSL
Dec-20
Community 
Rio Tinto 
Jan-21
Heritage, social licence 
Cleanaway 
Jan-21
CEO resignation
Audinate
Feb-21
Reporting 
Santos
Feb-21
Emissions, strategy 
Fortescue Metals
Feb-21
Heritage, social licence 
Viva Energy
1/3/2021 Climate change 
BlueScope Steel
Mar-21
Gender diversity 
Lynas
Mar-21
Governance, pollution, 
community 
Cleanaway 
Mar-21
Culture 
Liberty Group 
Mar-21
Sustainable finance 
Westpac
Mar-21
Climate change 
Steadfast Group
Apr-21
Governance, disclosure 
QBE Insurance
Apr-21
Climate change 
CBA
Apr-21
Climate change 
Rio Tinto 
Apr-21
Governance, heritage, social 
licence
BlueScope Steel
Apr-21
Climate change 
Rio Tinto 
Apr-21
Governance 
BHP
May-21
Heritage management
CSL
May-21
Community 
Domino’s
May-21
Disclosure 
Santos 
May-21
Strategy, climate change 
Goodman 
Group 
May-21
Governance, circular economy, 
human rights 
Company
Timing 
ESG/Sustainability focus area
Orica 
Jun-21
Emissions 
Rio Tinto 
Jun-21
Governance, community 
Global Equities
Company
Timing 
ESG/Sustainability focus area
Republic 
Services
Nov-20
Circular economy, emissions, 
workforce safety
Waste 
Management
Dec-20
Circular economy, emissions, 
workforce
Nomad Foods
Dec-20
Strategy, nutrition, and health
Mondelez
Dec-20
Sourcing, modern slavery, 
emissions
Nomad Foods
Dec-20
Sourcing, nutrition, packaging
Reckitt Benckiser Jan-21
Environment, supply chain, 
emissions
Volvo 
Mar-21
Emissions, strategy
MercadoLibre
Mar-21
Strategy, emissions, access
Trane 
Technologies
Mar-21
Emissions, water, H&S
FMC Corporation Jan-21
Emissions, strategy, D&I
Teck Resources
Apr-21
Emissions, environment,
 heritage management
Royal DSM
Apr-21
Strategy, emissions
Orsted
Apr-21
Strategy, biomass sourcing, 
emissions
Deere & Co
Apr-21
Strategy, emissions
Teck Resources
Apr-21
Heritage management, 
controversies
Ball Corp
May-21
Circular economy, workforce
Eli Lilly
May-21
Product safety, animal testing, 
access
ING Groep
May-21
Strategy, governance, 
responsible lending
Giant 
Manufacturing
Jun-21
Disclosure, emissions, workforce
Pulte Group
Jun-21
Product access, sourcing
Chipotle
Jun-21
Supply chain, sourcing, 
workforce, animal welfare
KKR
Jun-21
Fossil fuels, responsible finance
Yum China
Jun-21
Nutrition, labour rights, sourcing
Royal DSM
Jun-21
Emissions, agriculture 
Vestas Wind
Jun-21
Biodiversity, modern slavery

ALPHINITY INVESTMENT MANAGEMENT  64
Appendix 2 TCFD reference table 
TCFD category 
Disclosures 
Addressed
Report 
reference 
Planned improvements 
Governance 
a. Describe the board’s oversight of 
climate-related risks.
Yes
Page 28 
From FY22 will implement a 
dedicated update to the Board on 
climate change. 
b. Describe management’s role in assessing 
and managing climate-related risks and 
opportunities.
Yes
Page 28-37 
N/A
Strategy 
a. Describe the climate-related risks and 
opportunities the organisation has 
identified over the short, medium, and 
long-term.
Yes
Page  29
N/A
b. Describe the impact of climate-
related risks and opportunities on the 
organisation’s businesses, strategy, and 
financial planning.
Partially 
Page 28-31
To enhance our understanding and 
disclosure on the impact of risks 
on strategy and financial planning, 
scenario analysis will be completed 
between FY22-24.
c. Describe the resilience of the organisation’s 
strategy, taking into consideration different 
climate-related scenarios, including a 2°C 
or lower scenario.
No 
Risk 
Management 
a. Describe the organisation’s processes 
for identifying and assessing climate-
related risks.
Yes 
Page 28-37
N/A
b. Describe the organisation’s processes 
for managing climate-related risks.
Yes 
Page 28-37
Our approach to managing 
climate-related risks is constantly 
under review. 
c. Describe how processes for identifying, 
assessing, and managing climate-related 
risks are integrated into the organisation’s 
overall risk management.
Yes 
Page 28-37
N/A
Metrics and 
Targets 
a. Disclose the metrics used by the 
organisation to assess climate-related risks 
and opportunities in line with its strategy 
and risk management process.
Yes 
Page 33-37
N/A
b. Disclose Scope 1, Scope 2 and, if 
appropriate, Scope 3 greenhouse gas 
(GHG) emissions and the related risks.
Partially 
Page 36-37
From FY22 operational Scope 1 and 
Scope 2 emissions will be measured 
and disclosed.
c. Describe the targets used by the 
organisation to manage climate-related 
risks and opportunities and performance 
against targets.
No 
We are considering the need to set 
targets related to climate change. 
As yet, no definitive commitment 
has been made.

65  ESG AND SUSTAINABILITY REPORT 2021
Appendix 3 Sustainable Compliance Committee 
Independent Experts
Elaine Prior, ESG expert
Elaine retired in 2017 from Citi Research in Sydney where she was a Managing Director covering 
ESG and Sustainability research for Citi’s fund manager and superannuation fund clients. 
An award-winning ESG pioneer, she researched sustainability issues on ASX listed companies 
to help clients assess valuation impacts or risks, or to engage with companies to encourage risk 
mitigation or broader positive change. With Elaine at the helm, Citi was awarded ‘Best Broking 
Firm’ title by ESG Research Australia every year for eight years between 2009 and 2016. 
Elaine held roles in investment research and funds management for 20 years prior to joining Citi 
in 2007, primarily focused on the resources sector, and was the top-rated BHP analyst in the 
Australian market for several years. 
Elaine has degrees in Chemistry, Petroleum Engineering and Antarctic Studies and, before working 
in the markets, was an oil industry engineer in the UK North Sea and Australia. She also worked on 
environmental projects for Antarctic and Arctic tourism.
Melissa Stewart, Human rights expert 
Melissa joined the Alphinity SSF Compliance Committee in September 2020. She is a recognised 
industry expert in modern slavery and human rights, and for more than 20 years has held senior 
advisory roles and full-time positions globally with the United Nations, Australian and international 
Governments, ASX-listed companies, and not-for-profits including World Vision Australia.
As a qualified lawyer with advanced degrees and practice in human rights law and international 
development, Melissa previously advised governments in Australia and globally on the legislative 
and policy response to modern slavery, and on business and human rights. She also has extensive 
experience in the private sector advising on responsible operations, investments, and supply chains. 
Most recently, Melissa worked with Australian insurance company IAG as a senior expert in the 
Office of the CFO advising relevant business units including legal, capital markets, M&A, risk, 
human resources, and group procurement. 
Melissa has a BA in International Development studies and an LLB from the University of British 
Columbia. Before entering the advisory space, she worked as a corporate lawyer in Canada 
and Thailand.

ALPHINITY INVESTMENT MANAGEMENT  66
Appendix 4 SDG Data for Sustainable Strategies 
(FY21 Holdings)
While these companies were owned during the year they may or may not be held at the time this report is published 
or subsequent to that.
Domestic Equities 
Company
SDG Alignment
ESG
Positive
Negative
Net 
score 
quartile
MSCI 
rating11
Communication Services
Carsales
8, 10
3
AA
Telstra
9
3
A
Consumer Discretionary
Baby Bunting 
3
12
4
AAA
Bapcor
11
3
AA
Carbon Revolution
9, 12, 13
1
-
IDP Education
4
3
AA
Super Retail Group
3, 11
12
4
A
Wesfarmers 
2, 4, 9, 10
12, 13
4
BBB
Consumer Staples
Costa Group 
2, 3, 10
6, 12
2
AA
Woolworths
2, 9, 10
3, 12
4
A
Financials12
ASX
8, 10
3
A
Australia and New 
Zealand Bank 
1, 8, 10
13
4
A
Commonwealth 
Bank 
1, 2, 8
13
4
AA
IAG
1, 11, 13
1
AA
Liberty Financial 
Group
1, 8, 10
3
-
Macquarie Group
1, 7, 8, 9
13
3
AA
Medibank Private
1, 3
2
A
National Australia 
Bank 
1, 8
13
4
A
Perpetual
8
4
A
QBE Insurance
1, 11, 13
1 
AA
Steadfast Group
1, 11, 13
2
A
Westpac
1, 8
13
4
A
Health Care
Cochlear
3, 4, 10
1
AAA
CSL
3
12
1
A
Company
SDG Alignment
ESG
Positive
Negative
Net 
score 
quartile
MSCI 
rating11
Fisher & Paykel 
Healthcare
3
12
1
AA
Next Science
3
12
3
-
Ramsay Healthcare
3, 9
12
2
AA
ResMed
3
2
AA
Sonic Healthcare
3, 9
12
2
A
Industrials
ALS
9, 14, 15
12
1
AA
Bingo
9, 11, 12
12
3
-
Cleanaway Waste 
Management
9, 11, 12
12
2
BBB
Fluence 
Corporation
6, 9, 11, 
13
1
-
Qantas
8, 9, 10
13
3
AAA
Reliance Worldwide 6, 9
1
AA
Sydney Airport
8, 9
12, 13
4
AAA
Transurban 
8, 9, 11
12, 13, 15
2
AAA
Information Technology
Appen
8, 9
3
BB
Audinate
4, 9, 12
2
A
Life360
3, 9
3
-
Megaport
9
4
BBB
Nuix
8, 9
2
-
Pushpay Holdings
1, 8 
2
A
Whispir
8, 9
2
-
Materials
BlueScope 
Steel
9, 11, 12, 
13
13
1
AA
CSR
9, 11
2
A
Deterra Royalties
9
4
A
Fortescue Metals 
Group
7, 9, 11, 
13
6, 13
1
AA
Iluka Resources
9, 11
6
4
A

67  ESG AND SUSTAINABILITY REPORT 2021
Company
SDG Alignment
ESG
Positive
Negative
Net 
score 
quartile
MSCI 
rating11
James Hardie 
Industries
9, 11
2
BBB
Lynas
7, 9, 11
6, 12
2
A
Oz Minerals 
7, 11, 13
6, 13
1
A
Rio Tinto 
7, 9, 11, 
13
6, 13
2
A
Sims Metal 
Management
11, 12
1
AAA
Real Estate
Goodman Group 
8, 9
12
4
A
Lifestyle 
Communities
3, 9, 10, 
11
1
A
Mirvac Group
9, 11
12
3
AAA
Utilities
APA Group
7, 9
13
3
AAA
New Energy Solar
7, 9, 11, 
13
12
1
A
Global Equities 
Company
SDG Alignment
ESG
Positive
Negative
Net 
score 
quartile
MSCI 
rating11
Communication Services
Alphabet
4, 9, 11, 
16, 17 
11, 12, 16
1
BBB
Consumer Discretionary
Chipotle Mexican 
Grill
2, 3
12
4
BBB
HelloFresh
2, 3, 11, 
12
12
1
A
Lowe’s
9, 11
11, 12
4
AA
MercadoLibre
1, 8, 9, 
10, 17
11, 12
1
A
Nike
3, 5
12
4
A
Nomad Foods
2, 3, 12
12, 13
2
A
PulteGroup
9, 11
12, 15
3
BBB
Financials12
AIA Group
1, 3, 17
2
A
ING Groep
1, 8
13
4
AA
Morgan Stanley
8
13
4
AA
Company
SDG Alignment
ESG
Positive
Negative
Net 
score 
quartile
MSCI 
rating11
S&P Global
8, 9, 10, 
12
13
3
A
SVB Financial 
8, 9
3
A
Health Care
Danaher Corp
3, 6, 9, 14
12
2
BBB
Eli Lilly
3
12
1
A
HCA Healthcare
3, 9, 10
12, 13
2
A
UnitedHealth 
1, 3, 10
3
2
BB
Industrials
Deere & Co
2, 6, 9
12
4
A
Otis Worldwide
9, 11
1
BBB
Schneider Electric
7, 8, 9, 
11, 13
1
AAA
Trane Technologies
2, 9, 10
13
3
AAA
Vestas Wind 
Systems
7, 9, 11, 
13
1
AAA
Volvo
9, 11
13
4
AA
Information Technology
Adobe Systems
8
4
AA
ASML
9, 11
2
AAA
Infineon
7, 9
3
AA
Keysight
7, 8, 9, 11
2
AA
Microsoft
4, 8, 10
13
1
AAA
Nvidia
3, 8, 9, 11
3
4
AAA
Visa
8, 9, 10
2
A
Materials
Ball Corp
9, 12
3
AA
DSM
2, 3, 7, 9, 
12, 14
12, 13
3
AAA
Real Estate
Prologis
8, 9
12
3
AA
11 MSCI data as of 30 June 2021.
12 Negative alignment to SDG3: Climate Action in banks reflects small credit exposure to fossil fuels, relative to the entire loan book. A review is underway to further 
account for other positive contributions, such as green financing, and negative contributions, such as adjacent industries to fossil fuels like transportation and refining, 
or other high emitting sectors.

46473/1021
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